Application of software asset management on the rise however challenges still remain confirms EY research

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London 10 February 2011: 88% of software vendors and 80% of their clients have formal programmes in place to manage software asset management (SAM) according to new research produced by EY. However, today’s findings confirm that despite the uptake in establishing SAM programmes, several gaps still exist which limit their effectiveness.

The report confirms with vendors that the main use of such programmes remains revenue generation, with 63% of respondents citing this as their number one reason for establishing SAM client programmes; closely followed (on 50%) by protecting intellectual property rights.

EY’s findings also provide insight into how software vendors choose customers on which to perform SAM audits.

75% of vendors surveyed confirm that internal inconsistency in purchasing patterns of software was the main prompt for them to consider audit proceedings. History of poor compliance and the size of the client also ranked highly – both categories were cited by 50% of vendors as being warning signs which would make those customers more likely to be given a SAM audit.

Commenting on today’s results Ian Blatchford Partner with EY confirms “It is encouraging to see that vendors and their clients are actively addressing the issue of licensing compliance. However, with IT infrastructure becoming more complex, and with a wide range of suppliers often across geographies, it is clearly becoming more difficult for both vendors and clients to monitor what’s being used and where. This is becoming even more difficult with new developments such a cloud computing.”

Audit quality
Although most vendors claim to have a formal approach to compliance reviews, less than half say this is globally consistent and only a minority carry out a quality assessment on the audit.

In addition, the findings show a natural difference in the perception between vendors and clients of the audit experience.

Only 13% of vendors claim to have had a negative experience with clients following execution of a SAM audit with the vast majority (76%) confirming neutral or positive post-SAM audit experiences with clients.

However, clients were less complementary with low levels of satisfaction over quality of the work and value derived from software vendor audits noted, with many expressing dissatisfaction over the time taken to carry out audits.

Blatchford comments “Interestingly, respondents’ perception of length of the SAM audits also differed. Whereas most vendors felt these audits took less than 180 days, a majority of customers felt these reviews actually lasted longer – a sign that such activity needs to be handled sensitively”.

Further client perspective
Today’s findings also confirm how clients who are concerned about incurring significant additional costs through an audit, are increasingly embracing SAM, to take greater control over the use of software around their business. 90% of companies surveyed have a formal SAM policy in place and a similar percentage have a software inventory, while 80% have a software asset manager.

Direct cost saving and compliance were cited as the two primary reasons why clients execute their SAM programmes with 68% and 64% respectively reporting these as the two main objective behind establishing SAM programmes.

Additionally, though today’s research confirmed that every organisation surveyed employs some level of SAM tool, no single tool appears to dominate, with over 20 separate titles in operation across the sample population alone.

Barriers to customer compliance
The report confirms that whilst many organisations are attempting to manage their IT assets more effectively, there remain barriers for them to overcome in order for them to fully realise the benefits of such programmes.

Inadequate asset management tools were reported by 75% of vendors to be the main barrier for their clients with an overall lack of understanding around compliance policies being cited by 63%. Complexity of software contracts and a lack of client management closely followed, with 50% of vendors citing these all as reasons why businesses may struggle to achieve compliance.

Blatchford comments “Both suppliers and customers are critical of the over-complex nature of many software contracts – the majority of those we surveyed confirmed this to be the case. Customers also feel that their own decentralised structures often make it harder to keep track of usage around the organisation – as does their increasingly complicated suite of IT packages.”

The survey also reveals further inconsistencies in the way customers manage their software.

Blatchford comments “When licences become available for use by other individuals, a majority of respondents do seek to reassign these rather than buy new ones. However, not all customers are scanning the business to ensure every licence is fully utilised, which can push up costs unnecessarily.”

Cloud on the horizon
Despite a greater focus on managing software assets, there are some worrying gaps in customers’ approach. Six out of then admit that they don’t monitor software usage and usage patterns, which could undermine their efforts.

Blatchford  concludes “Perhaps more concerning, only 12% have responsibility for monitoring the usage of cloud-based products, suggesting that many businesses have not yet worked up to the implications of this growing trend.”

Download Software compliance without tears – Monitoring customers’ software usage in a complex world 640K, February 2011

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