Strategic SAM is becoming critical for business intelligence

– Traditional SAM tools leave CIOs increasingly vulnerable to software over-spending and greater compliance risk
– Advanced SAM programs can reduce up to 30% of wasted software spend in the first year of adoption
– Machine learning capabilities are adding additional layers of SAM intelligence

For CIOs, managing hundreds of software assets across an enterprise can be like opening Pandora’s box. The problem may seem manageable from the outside, but once you look beneath the surface and into layers of licensing, security, and cost management, order can quickly turn to chaos.

Historically, most IT organizations had a limited number of software applications to worry about—productivity suites, financial and travel apps, Web browsers. Today, with the mass adoption of mobile devices, cloud services, and IoT, software asset management (SAM) is a different beast.

Tracking assets across rapidly expanding corporate public and private clouds can be a costly, risky adventure. Companies waste an estimated $167 billion annually on unnecessary software costs, according to Gartner.

The challenge is catching up with many CIOs. As recently as 2018, according to Deloitte, 74% of IT leaders said their organizations didn’t have a formal SAM function, and even more (83%) did not consider it a strategic priority.

Those views are changing quickly. Companies that deploy modern SAM programs can reduce up to 30% of their software “waste” in the first year of adoption, according to Gartner. The annual marketplace for SAM solutions, estimated at $1.4 billion in 2018, is expected to reach $3.9 billion by 2026.

The consumption meter for cloud is always running.

Next-generation SAM is helping CIOs understand what software their organizations own, how much or little is being used, whether the company is overpaying or not, and if their companies are effectively managing their licensing compliance risk.

“It’s all about knowing and managing the software your organization is using so you don’t go beyond what you’re entitled to consume,” says Paul Baguley, a partner at KPMG. The new generation of digital SAM tools can help CIOs cover the basics such as maintaining accurate software inventories, and “understanding analytics around software demand management, usage, and other capabilities of these tools as they continue to evolve.”

From old-school SAM to new

For years, many companies used SAM primarily to gather data about how their organizations acquired, used, and disposed of their software assets. The idea was to track and manage software usage in order to avoid buying unneeded software and exceeding software license limits, which can trigger costly vendor audits. Most IT leaders viewed SAM as a clerical task that IT staff could handle with spreadsheets and other basic tools.

That’s no longer a feasible approach because of how much software is now being consumed and shared across the modern enterprise. Large companies manage an average of 129 software applications, according to the 2019 Businesses @ Work report from Okta.

The explosion of software as a service (SaaS) in recent years adds another layer of complexity in that SaaS makes it far easier for employees to sign up and download a multitude of apps to help them complete their work.

Cloud-based business apps still require careful oversight. As a result of these trends, modern SAM tools are expanding beyond their traditional focus on software license management.

“Instead of serving as enhanced spreadsheets, the better SAM tools are evolving into business intelligence tools,” says AJ Witt, ITAM industry analyst at the ITAM Review, a trade publication. “They are moving away from just capturing vast amounts of inventory data and more toward making sense of that data.”

Software intelligence can support different functions across a company, including procurement, HR onboarding, IT services, legal, and security. Each department expects to have seamless visibility into IT assets. Accomplishing this can be difficult without SAM tools and the ability to know what assets the organization owns.