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Software Asset Management – Are YOU Part of the “One Percent?”

Love it or hate it, the term “One Percent” has taken on prodigious meaning in the English vernacular. In fact, it’s difficult to utter these words without stirring up political fervor of one kind or another. But today I’m going to borrow this term to apply to an “elite” group that is near and dear to my heart: No, not the “One Percent” of Americans who comprise our country’s wealthy elite—rather, the “One Percent” of companies who are reaping the full benefits of software asset management (SAM).

As a vendor that focuses on providing license management software to enterprises, I will freely admit that we rely upon those striving to be in the “One Percent” to invest in technology like ours. Not only do they understand the importance of SAM, but they can clearly articulate its value and will—in some cases—shout it from the rooftop. There is a great deal that can be learned from this particular “One Percent,” and last month I was fortunate enough to meet a few of them at the IBSMA’s 2013 Compliance Manager Summit in San Jose.

The Compliance Manager Summit is designed to bring together software publishers to discuss trends in software licensing and pricing and to share best practices and technologies for enforcing license compliance. It was therefore a rare—and very illuminating—opportunity to hear what’s happening on the software publishing side of the fence in an unedited, “no-spin” environment that’s very different from what we generally hear discussed in the public domain.

But of even greater interest to me was a panel comprised of end-user companies that had been assembled to discuss their experiences with license compliance and vendor audits. The panelists, who hailed from well-known companies such as Visa, Wells Fargo, and Kaiser Permanente, had all undergone audits and were highly sophisticated in their understanding of software licensing and software asset management. In fact, everyone in the room, including publishers, agreed that these companies were so advanced in their SAM programs that they represent the elite few.

What, you may ask, separates the one percent from the remaining ninety-nine percent of companies that struggle mightily with license audits and SAM? Based on the discussion among panel members, here is what I’ve concluded makes them truly unique:

They can generally stave off full-blown software audits merely by providing vendors with high-level documentation upon receipt of the initial audit letter that shows they are, in fact, compliant for the licenses in question. More often than not, vendors accept this, and walk away.

They save about 20% of their software spend by performing regular software consumption analysis and continually optimizing their license portfolios. While many companies are able to manage their compliance risk reasonably well, most have not reached full SAM “enlightenment” by embracing software usage analysis.

Now, I’ve always suspected that vendors whose customers can demonstrate they’re making a good faith effort at license compliance get favorable treatment from their publishers. But this pretty much confirms it. While they may get audit requests, these companies have earned enough credibility to gain the upper hand with their ISVs.

We’ve also long known that companies who make an effort to track application usage will find opportunities to reduce their software spending. Many of our customers emphasize this, but for one reason or another they rarely spend time documenting those savings. But these organizations that are part of the “One Percent” have, in fact, documented their savings, a part of the process that allows them to continually justify their investment in SAM.

So what, exactly, did it take for these companies to find themselves in the “One Percent?” It all boils down to this:

1) They have undergone painful, costly audits in the past

2) They have solid executive support for their SAM initiatives

3) They have made a significant investment in implementing airtight SAM technologies and processes

For some reason, most companies stop short of #2. I suspect if executive decision-makers understood—or IT managers could more forcefully articulate—that their organizations could potentially avoid software audits and reduce software spending by tens or hundreds of thousands of dollars, more organizations would embrace SAM.

And, happily, the resulting benefits would be enjoyed by more than just the elite few.

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