What is Software Asset Management (SAM)?

Learn about the importance of Software Asset Management in any organization

Software Asset Management (SAM) is a subdomain of IT Asset Management that is concerned with the purchase, deployment, maintenance, utilization, and disposal of software applications within an organization. The International Association of IT Asset Managers (IAITAM) describes Software Asset Management as follows:

Software Asset Management is the set of business practices that support the use of software for an organization in a responsible and productive way. These business practices are used to achieve many goals for the use of the software, including customer satisfaction, cost effectiveness, risk reduction, strategic planning, and decision support.

Since the importance (and therefore the corresponding risk) of software application has been growing in recent years, the domain of Software Asset Management is becoming increasingly more important. Where SAM practices originated initially as a compliance program, driven by external software audits, the domain has evolved towards more strategic business enablement.

In most large organizations today, there are hundreds of different software applications in use. Many of these applications have different purposes and serve different business units or functions. With the rapid adoption of cloud applications (and don’t forget mobile apps), the software environment of most businesses has become extremely complex.

Software Asset Management addresses the problem of complexity and aims to reduce the risk that this complexity brings to large organizations. On a very high level, we can say that SAM has the following core purposes:

  1. Achieve and main oversight of the software assets an organization has. The most important objective of SAM is to have an accurate and up-to-date overview of the applications that the organization uses. This information – which is frequently stored in a centralized licence management system – is important for two key reasons. First of all, it is required to have an accurate overview of the software licenses (and their utilization) for compliance reasons and to avoid any potential penalties from vendors. In many cases, having up-to-date licence tracking is a mandatory requirement from enterprise software vendors (think Microsoft, IBM, Oracle and SAP). Secondly, having an up-to-date record of the utilization of software assets provides a large potential for cost savings. Many organizations pay yearly fees for software licenses that nobody uses, or have more software licences than are actively utilized. Having real-time and up-to-date information can provide organizations with significant cost savings.
  2. Identify and manage data risks. With the large growth of applications in organizations and the quick rise of cloud applications, organizations are now confronted with a significant risk: data is stored at disparate locations, and in many separate databases. Especially for organizations that are dealing with sensitive of personal data, this imposes a significant cybersecurity risk. It is therefore of key importance to know and understand where data is stored, and this frequently starts with understanding the applications that the organization uses. Because applications are one of the key ‘data processors’ in any company, have adequate SAM greatly reduces Cyber Security Risk.

As a result of these two core requirements, Software Asset Management is now considered a core requirement by many if not most organizations. The corresponding role of “Software Asset Manager” has gradually grown to become a crucial role in IT Asset Management. In most organizations, the Software Asset Manager helps to identify and selected a software (procurement) strategy and helps in realizing cost savings.

Software Asset Management has become much more than the implementation of SAM processes. SAM can help to achieve (or enable) long-term business goals and contributes to the direction and efficiency of the organization. However, this requires the Software Asset Manager to have a sound understanding of SAM best practices and the ability to have a holistic view of the overall organizational goals and objectives.