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Software Asset Management in 2024: What it is & Top Benefits

Cem Dilmegani
Updated on Jan 11
5 min read
Software Asset Management in 2024: What it is & Top BenefitsSoftware Asset Management in 2024: What it is & Top Benefits

Software license management can be complicated due to various business functions making software purchases (also called shadow IT) and vendors’ complex pricing models. Changes in business volume or users could trigger unexpected license costs. Software asset management (SAM) is an approach to solve this complicated challenge and rescue businesses from unforeseen expenses while providing the full picture of the company’s software assets.

What is a software asset management (SAM) tool?

Historically, infrastructure and Operations (I&O) leaders used spreadsheets to manage software license and cost information. Now, they rely on SAM tools to improve software license management and optimize software spending.

Software Asset Management (SAM) tools form a subcategory of IT Asset Management (ITAM) tools. They automate activities needed to ensure compliance with software license rights and regulate the software costs. They capture license agreement terms in code, automate the collection of software usage data, calculate cost implications and help companies optimize software spending.

 Gartner defines SAM as:

A process for making software acquisition and disposal decisions. It includes strategies that identify and eliminate unused or infrequently used software, consolidating software licenses, or moving toward new licensing models.

What are the main capabilities of SAM tools?

  • Application control systems restrict and manage software installations on companies’ devices to minimize security and other risks. While this capability mostly deals with data protection and fraud detection, Digital Guardian is one of the leading vendors to handle these issues.
  • License manager systems provide an insightful archive for license entitlements to view where the company is under-licensed (at risk of compliance audit) or over-licensed (overspending money on unnecessary software purchases). For example, AssetSonar, a leading vendor, can track software licenses to optimize spendings and avoid non-compliant issues.
  • Patch management systems automate the deployment of software patches to ensure that computers are up-to-date and comply with relevant security and productivity requirements. Vendors like ManageEngine and Pulseway provides this solution to keep business systems updated without any security issues.
  • Product catalog tools collect specific product details such as name, edition, version and license agreement forms, as well as other top-level critical information for products used in the business. This information normalizes product naming conventions with the company and enables mapping between other development tools used in the composite SAM solution. As an example, Plytix is one of the vendors that gather different product details in one place in a standardized way.
  • Request management systems allow employees to request for software applications using a standardized form and process explicitly designed to capture and evaluate license specifications as well as to manage and monitor the procurement and deployment processes. For example, BMC Software, a leading SAM vendor, brings standardized and automated actions to specific user requests to maximize IT processes’ efficiency.
  • Software deployment tools automate and track the installation of new applications. Companies like Jenkins and Octopus Deploy focuses on this capability to improve related IT processes.
  • Software inventory tools intelligently discover software installed in the network and collect software file details like title, product ID, size, date, direction, and edition. Asset Panda, ManageEngine, and SolarWinds are some of the leading SAM vendors that perform this capability to maintain IT processes without any compliance issues.
  • Software metering systems track the usage of software applications in the network. They can also provide real-time compliance enforcement for licensed applications. As AssetSonar tracks software application usage to avoid compliance issues, other SAM tools like ManageEngine also monitor usage to prevent companies from unwanted updates or renewals. 

What are the top benefits?

Implementation of SAM tools usually surprise IT managers by exposing the unexpectedly large size of the shadow IT. Apart businesses’ desire to reduce high and unbudgeted expenses, SAM can also help optimize IT operations.

Cost savings

SAM allows companies to simplify their business system, leading to greater control over costs and knowledge required to direct future investment decisions. Gartner indicates that companies can cut software spending costs by as much as 30% with this method. The actual values will depend on

  • how decentralized IT buying is within the company
  • the current contracts negotiated with software vendors

Decreased compliance risks

The more information you have about what is being implemented, the better you can protect it. SAM provides businesses with a full overview of what is being installed, contract terms, and license inventory, helping you to make better IT decisions about software deployment and use, resulting in substantial cost savings.

Gartner estimates that 68% of organizations receive at least one audit request each year, and SAM tools support you against compliance risks.

Focus on higher-value added tasks

Taking a manual approach for software licensing monitoring is costly, time-consuming, and error-prone. Automating this method not only eliminates administrative activities by at least 50% but also frees up resources and workload of IT teams to concentrate on higher-value tasks.

What are the main challenges of SAM?

SAM sometimes might not give the expected results as businesses move too fast without any investigation, setting unreasonable goals, and not identifying a concentrated scope with a phased approach.

No single tool/solution

A single tool can’t discover all software characteristics and data required to calculate all license models. Some tools can work better for particular suppliers, depending on the situation. As a solution, several vendors bundle different technologies and characteristics to expand their coverage.

For example, on the discovery front, some tools need user details and/or particular configuration settings, while on the licensing front, product usage rights can be very complicated. In both fronts, specialized expertise is required to establish and sustain this degree of specialization. A single tool may not be specialized enough for both cases.

Complex and ambiguous software license terms

License models can be complicated and vague, as they continue to grow. DSome information needed to assess compliance can be hard to obtain. Not all vendor terms are straightforward, and new license models are still evolving. Before purchasing any software, companies should check the terms of the agreement in detail to prevent any ambiguity. 

Which departments can use SAM?

IT department

IT teams know the advantages of understanding what has been installed when, who uses what, and what is unused. Having control and understanding of the entire IT estate and how it works helps to devise successful software update and release procedures. In short, it streamlines the whole department’s processes and harmonizes the relationship between IT and the rest of the company.

Legal departments with full visibility of IT assets are in a better position to respond to an audit request from a software vendor. Without having to search for records of disorganized files, all paperwork relating to the terms of the software license would be to hand.

Procurement teams

Understanding the company’s software usage ensures that they are prepared to discuss contract renewals with software vendors successfully. Comparing what is required with what is being offered to them can put them in the driving seat. SAM can enable better budgeting, better planning and more efficient spending.

How is AI changing SAM?

Machine learning and artificial intelligence will be critical to the rapid maturation of asset management technologies over the next few years. Since SAM relies on automation to discover software and estimate costs, it will benefit from smarter automation enabled by advances in machine learning. Here are some of those areas where AI technologies can impact SAM tools:

Recommendations through Predictive Analysis

By analyzing historical data and current trends, SAM tools will be able to provide predictive analysis to companies. For example, SAM can make recommendations to the company to obtain additional software licenses next year, or it may recommend that the company buy additional hardware within six months.

Intelligent User Interaction

AI can be used to interpret the software request and to automate the implementation in the way that best suits the company’s business interests and terms and conditions of the publisher’s license or contract terms.

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Access Cem's 2 decades of B2B tech experience as a tech consultant, enterprise leader, startup entrepreneur & industry analyst. Leverage insights informing top Fortune 500 every month.
Cem Dilmegani
Principal Analyst
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Cem Dilmegani
Principal Analyst

Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

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