Software Asset Management in the Cloud World

Eons ago I was a panel speaker at the SAM Summit and the question came up about the future of Software Asset Management in a SaaS (Cloud) world.  One of the other panel members scoffed and said we’d all be out of jobs…my answer was the opposite – that the role would be just as important the only thing that would change is the data that we needed to review.  I’m guessing that was easily 8-10 years ago.

Well, we’re in a heavily Cloud (SaaS, IaaS, PaaS, etc) world and I’m happy to see I was fairly accurate but with some different nuances that I had not necessarily anticipated. While I have always joked that I am the accountant of the IT world, in many ways today it is reality (fortunately for me I like numbers in all their forms).

For example, think of your Microsoft environment (always one of my favorites as it is so pervasive).  If you have an Microsoft Enterprise Agreement and are actively using Microsoft Office 365 then you have probably seen the impact of un-managed Active Directory accounts.  In the old world of on premise usage, User accounts were determined by the number of humans using your Microsoft infrastructure (although far too many organizations incorrectly thought this was just the number of employees at the company) but in the online subscription world you realize that it is every account needing to function as a human (not resource accounts, but in this world you can easily find your smart conference rooms suddenly requiring User licenses).  Likewise users who are on Leave of Absence (LOA) are typically now consuming licenses so that their data and settings are preserved for when they can return to work – something that was not required to consume a license in the on-premise environment. Typically in our clients we see this to be about a 10% uptick over old on-premise days.

Now, that is in a closely managed environment where we are appropriately identifying types of accounts and auditing to ensure that numbers correctly correspond to headcount and contractors and that discrepancies can be explained based upon business need.  In an loosely managed environment we have seen over 30% of overages when we audit their accounts. 

The effect of loosely managed usage can destroy IT budgets. Unlike the old on-premise model, it is easy for Cloud solutions to grow unchecked as Brian Kirsch notes in his article “Avoid runaway costs to keep a cloud budget in check“.

In a 10,000 user organization we recently found 3,784 accounts that should have been Resource accounts but were incorrectly identified as User accounts. Since their User Account monthly fee was $39.73/user/month that was a $1.8m/year waste of money.  You cannot go back and get that money back as it is not Microsoft’s fault, and if you are mid-year (and assuming you correct it and report it in the appropriate time window so that it does not carry forward to the following year) you still need to pay for it through the end of that anniversary year (although in this case we are still in discussions with Microsoft to see if we can change that since there was some Microsoft involvement in the setup of the environment, I am hopeful).

Microsoft is just one of the many vendors where we have gone to subscription based licensing – the same applies to Adobe, Autodesk, JetBrains, the list goes on and on.  The need to re-harvest licenses and manage entitlements through proper processes, tools and people has not changed in the over 20 years I have had my business – all that has changed is where we go to get the data and that the licensing rules that apply will continually evolve.  But the need for a proper Software Asset Management program remains – we just may need to come up with a new title…

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