There’s no way around it – your organization will face a software audit at some point. A few years ago, Gartner found that 65 percent of organizations were audited by at least one publisher in the previous year, and there’s no reason to believe that figure has decreased.
Organizations, especially enterprises, deal with thousands of licenses from dozens of publishers, with millions of dollars in fines, fees, and penalties at stake if an audit finds an organization under-licensed. Continue Reading…
Looking back on 2014, it’s clear to us that IT asset management (ITAM), and more specifically software licensing, was a top priority for many organizations.
We published 93 posts in 2014, and eight of the 10 most-read articles explored various licensing changes from partners like Microsoft, Adobe, and Apple.
We’re not surprised. Software licensing is complicated, and the seemingly constant adjustments made during multi-year contracts make asset management that much more difficult. Because avoiding an audit is much more fun than responding to one, IT professionals must educate themselves on licensing changes, and how software licensing evolves over time. Continue Reading…
In my first post in the calculating product audit risk (PAR) series, I discussed how organizations should have two different strategies for managing their overall software estate. For the set of products where the value to the business or the risk of non-compliance is high, we suggest a “manage the product” approach. For the rest of the software portfolio, we suggest a “manage the risk” approach. To help differentiate between these two segments of the overall estate, we introduced the PAR value.
As a reminder, here is the PAR formula:
In general, the PAR value is meant to quantify the relative financial risk a product represents within the overall software portfolio. But before you can complete the math, you need to know where to find the factors that go into the equation. Here’s how: Continue Reading…
When it comes to compliance risk, we suggest that organizations craft two very different strategies for their overall software estate. Depending on the software, companies should either manage the product or manage the risk.
Manage the product
For high-risk, high-value software products such as Microsoft SQL Server, IBM Websphere, and Oracle databases, companies should pay careful attention to what licenses are bought and allocated and how they are being used. Because these products represent a relatively large portion of software spend and compliance risk, the products should be watched and managed individually and reviewed continually to ensure license utilization is high and compliance risk is low.
Manage the risk
Lower cost or lesser risk software products generally don’t need the same level of attention. Because costs or compliance risks are relatively lower, these products represent a much smaller financial risk to your organization. Managing this group (which could include thousands of software titles) in the same way as high-value products is difficult and unnecessarily expensive. A more efficient approach is to set reasonable, firm policies to guide proper usage and compliance and then conduct occasional spot-checks to find and rectify situations in which those policies were skirted. Since this approach carries a bit more compliance risk, consider setting aside a small opportunity fund to deal with over-deploys or an adverse audit finding. Continue Reading…
There’s no denying that software asset management (SAM) is important. It prevents overspending and compliance breaches, and helps organizations anticipate IT needs. But how to actually handle SAM is a different story. Should an organization build an in-house software asset management (SAM) solution or outsource those services?
I recently received an email from a customer asking me just that. I should say up front that as an employee of a company that offers outsourced SAM services, I might be a little biased, but after ruminating on the question, I can only conclude that outsourced SAM services are the way to go for most organizations.
Granted, customers that opt for a tool-based, in-house SAM solution do gain greater control and retain privacy over their assets, but the costs quickly outweigh the benefits. These solutions take up the valuable time of existing IT workers and are difficult to manage without the right training and expertise. The only organizations capable of balancing these tasks are ones large enough to sustain and balance a licensing team, and not all companies have that luxury.
The instant a customer purchases a piece of hardware or software title, it’s bombarded by additional support needs, including:
- Solution software (the direct cost of the software)
- Deployments for production, test, backup, and other uses
- Hardware dependencies
- Supporting software (operating systems, virtual machine licenses, database licenses, etc.)
- Software maintenance (for solution and supporting software)
- Implementation (consulting support for installation, customization, integration, and training)
- System administrators (primary and backup administrators, training, turnover, etc.)
To save the headache, customers can opt for an outsourced and integrated SAM solution that manages all of their critical software assets without wasting valuable time and resources. Here are three reasons why it’s well worth a customer’s time and money to choose an SAM service to manage its software assets: Continue Reading…
Managing all the hardware and software assets for an enterprise workforce is no easy feat. A large organization must manage thousands or tens of thousands of employee devices, all of which are loaded with myriad software subject to various maintenance dates, combinations of licensing agreements, and therefore a multitude of licensing rules.
With so much technology under one roof, it’s easy for a licensing event to slip through the cracks and harm an organization in the long run. For example, the use of unlicensed software could expose organizations to hefty fines and leave companies scrambling to purchase new licenses to bring them into compliance. Not only do missed events hurt an organization’s bottom line, they also damage corporate reputations and can increase scrutiny from other manufacturers and vendors.
To help customers avoid the risks of non-compliance and give them a better understanding of their software entitlements, SHI offers several tools that provide complete visibility into the software and quantities an organization is licensed to use. Here are two of the best: Continue Reading…
We recently calculated the costs and compliance risks of under-licensing software. But using more licenses than you’re paying for shouldn’t be your organization’s only concern. Almost every customer we come across is also over-licensing products in some situations. That is, they have purchased more licenses than they actually need.
How does this happen? Let’s say one of your employees retires or moves to a different company. She returns her computer (and the software licensed to it) to her IT department, which shelves the assets for future use. The next week, your company hires someone to fill the role. But, when that person is ready to set up her work station, she doesn’t go to the IT department. She goes to the procurement department, which purchases new licenses for her to use. Or, in another common scenario, the organization downsizes and the software gets “lost” in the confusion of the moment. The result is unnecessary outflow of cash and an unused stock-pile of licenses.
While this might not seem like a big deal at first glance, the costs of licensing over-compliance can negatively impact budgets, projects, reputations, and careers. Over-licensing software doesn’t have the same immediate, negative impact of under-licensing or an audit, but it can slowly drain resources from more productive uses. And the problem tends to self-perpetuate: Buying too many licenses in the first place very often results in buying too much maintenance year after year.
When idle licenses are uncovered, certain questions invariably arise: How much did the unused licenses cost, and what other projects were cut or had their budgets slashed in order to cover the expense? Who sanctioned this purchase? Why don’t we have better records on what we own and what we are using? And lastly, now that we have identified all these unused licenses, what do we do with them?
Organizations that have a surplus of unused software licenses have four options: Continue Reading…
Properly licensing software in a virtual environment can be a challenge for many organizations, and I’ve heard the process described as everything from a “minefield” to “a ticking time bomb.”
However, an experienced IT Asset Management (ITAM) partner can help you navigate the virtual terrain. Take this customer case study, for example.
Billing and software solutions provider Mid America Computer Corporation (MACC) was approaching its annual True-up reconciliation for its Microsoft software. To make sure the company’s license inventory was in compliance with its contract prior to renewal, MACC needed an accurate, comprehensive look at exactly what software was being used on what devices.
Kourt Jensen, Network Supervisor at MACC, faced three challenges:
- He didn’t have the time to collect a complete inventory himself.
- He lacked the confidence in the software inventory tools MACC had in place to provide up-to-date licensing information necessary for an accurate True-up.
- And he needed help understanding the licensing requirements for a virtual server environment. Continue Reading…
Although IT asset management (ITAM) gets VERY complicated VERY quickly, the key to selecting a partner can be boiled down to two simple questions: Who do you trust? Why do you trust them?
In a recent article, Paul Sheehan argues that companies that sell software licenses cannot function as independent and objective third-parties when it comes to helping clients manage those assets. The argument has merit. But, the author also clearly states that he works for a company that does not sell licenses, but does provide ITAM services.
I work for a company that does both, so it’s not surprising that I have a differing opinion. I believe that a world-class VAR with a world-class Software Asset Management (SAM) process is the best SAM partner a customer can have.
Here are the top six reasons why it’s not only possible – but likely – that the IT asset management solutions offered by a company like SHI are second-to-none.
- SHI is not your average VAR. Under the same private ownership since 1989, SHI has the advantage of answering to only one group of key stakeholders: our customers. With a 99 percent annual customer retention rate and clients who have been with us for 10, 15, and 20 years, SHI’s account teams are never put in a position to make decisions based on meeting quarterly Wall Street expectations. Our only interest is in the health of the long-term relationship we have with our clients. Continue Reading…