With software licences and maintenance representing 20-30 per cent of overall IT budgets, the savings that an optimised and automated software asset management (SAM) solution can deliver are hard to ignore. Patrick Gunn, Vice President Sales, Flexera Software reports.

A 2008 KPMG survey revealed that 59 per cent of organisations were at the lowest level (basic) of SAM maturity. This level is defined as: ‘Organisations have little control over what software assets are being used and where. They also lack policies, procedures, resources, and tools.’

A follow-up 2009 KPMG report stated: ‘A solid SAM initiative is not an expense to be justified, but rather an investment that can provide a marked competitive advantage. Companies implementing an integrated SAM programme frequently report both significant direct cost savings as well as efficiency gains.’

Hence in summary there are lots of organisations that lack proper tools and there’s a strong case to be made for implementing an automated solution as part of a mature SAM programme.

Today, there are a number of SAM tools on the market offering varying levels of automation and sophistication. The breadth of available functionality makes it more difficult for organisations to select the SAM tool that would best meet their business requirements.

Here are some key considerations for organisations to bear in mind when looking to invest in a SAM solution.

Compatibility with existing systems - is it a good fit?

Organisations should determine whether the SAM tool will easily plug in to their existing IT environment. Can it connect to IT asset inventory tools, procurement systems, HR and other business management systems to collect all the necessary data? The more advanced SAM tools process data from a myriad of sources to determine vendor licence positions, compliance with licence agreements and cost optimisations.

Also consider whether the tool is compatible with current processes. In some cases, processes must evolve to fully take advantage of a more automated SAM solution. For example, purchase orders with stock keeping unit (SKU) numbers can help streamline the SAM process. If the organisation’s purchase orders lack SKUs, it may be necessary to upgrade the purchase order process to include them.

SAM functionality - does it do everything you need it to do?

Discovery, inventory and asset recognition - On a very basic level, most tools on the market today offer the ability to perform discovery and inventory of hardware and software assets. Although, be sure it supports inventory across multiple platforms if the enterprise has some combination of Windows, UNIX, Linux and / or Mac OS machines.

The chief concern is really whether the tool has an accurate and up-to-date mechanism for recognising software assets. There are thousands of publishers and tens of thousands of commercial software titles. On top of that, many enterprises have custom applications. The tool must not only be able to ascertain the various software titles installed on each computer, but also the versions, editions and when applicable, product suites, as this could impact the enterprise’s licence liability.

For example, if there are three versions of Adobe Acrobat installed then the inventory analysis must accurately report all of these versions. In addition, the tool must be able to accurately determine the versions and editions of Adobe suites installed. This can have significant cost implications for organisations, as Adobe suites cost less than the same applications purchased as individual components.

Purchase order data - A SAM tool should be able to offer analysis of what software an organisation has bought and how they have bought it. In most cases, purchase orders have SKUs which identify not only the publisher, title, version and edition of the software, but also the type of purchase agreement - Microsoft Enterprise Agreement, Microsoft Select, Adobe CLP etc. By utilising the SKU information, the SAM tool can automate the process of determining what has been purchased and should be able to match purchases to installed software.

However, it is crucial for the tool to be able to go beyond simply comparing software purchase counts to install counts. This approach is very pessimistic and practically ensures that the organisation is paying too much for software licences and maintenance.

Licence and contract optimisations- Advanced SAM solutions enable organisations to perform a number of optimisations that reduce software costs. First, it’s important for the tool to consider product use rights (PUR) that define how software licences can be consumed. PURs include upgrade, downgrade, second use, virtual machine use and multiple version rights. They may be specified in the licence agreements that accompany the software, as in the case of Microsoft volume agreements such as EA, Select and Select Plus. For other vendors, such as Adobe, PURs may also vary from product to product and version to version.

SAM tools should take these use rights into account when assessing an organisation’s licence position. For example, downgrade rights allow organisations to purchase the licence to a newer version of the software, but run an older version on their computers. The SAM tool must be able to apply the downgrade rights to reconcile the licence purchases against the installed software.

Similarly, second use rights can dramatically affect an organisation’s licence position. This right allows users to have one copy of the software on the work desktop and another copy on a laptop owned by the same user. Microsoft Select Agreements provide this right, but Microsoft Enterprise Agreements don’t.

If the SAM tool doesn’t apply these rights, the organisation could be lead to believe (erroneously) that it has many more copies of the software installed than its licence entitlements allow. Application of PURs allows organisations to optimise their licence consumption.

Another key optimisation is licence reharvesting, which involves reclaiming and reallocating unused software licences. If there are users in other parts of the organisation who need access to the unused applications, then cost savings can be realised by deferring new purchases. SAM tools that track application usage can find candidates for re-harvesting.

Quite often, some software becomes ‘shelfware’, and organisations continue to pay maintenance on it. There may also be computers in storage that contain installed software. In these cases, maintenance costs can be reduced going forward and this can result in significant savings.

SAM delivery models - hosted, and on-premise solutions

Organisations also need to consider the SAM solution delivery model that best meets their needs. SAM tools are available as traditional on-premise installations, which offer the most capability and flexibility while keeping the whole operation in-house. 

There are also hosted solutions that are typically provided as part of a managed service. Hosted tools run off-site in the service provider’s data centre. The hosted approach should offer all of the same functional capabilities as the on-premise tool, but off-load some or all of the operational aspect of running the tools.


A mature SAM process involves the collection and analysis of a vast variety of data - from hardware and software inventory to purchase orders, licence agreements and maintenance contracts. SAM tools that help automate this entire process, reconciling software installations with both licence purchases and entitlements, enable organisations to reap the biggest rewards.

SAM tools allow organisations to stay compliant and reduce the risk of licence audits. Additionally, they can enable savings of 15-25 per cent of the organisation’s software spend.