John Emmitt (Japan) - Software Asset Management Maturity in Financial Terms

With the rise of software piracy companies require an effective strategy in managing licenses. John Emmitt, Senior Marketing Manager at Flexera Software, uncovers the complexities involved in securing effective software asset management

There are a couple of different ways to look at software asset management maturity. One is from the standpoint of piracy rates, and the other is from the a financial perspective. In the former case, as reported recently in an ITAM Review article, Japan follows closely behind the United States, at a 21% versus 20% piracy rate, according to 2009 BSA data. This is essentially a vendor-centric, license compliance view of software asset management maturity. But software asset management and license optimization are critical to the enterprise for financial reasons-a mature program means ongoing cost savings on licenses, maintenance and software audits.

One of the primary challenges facing enterprises in Japan is managing software licenses when there is a high degree of organizational complexity. Many Japanese organizations have a large number of subsidiaries. Even if an organization is purchasing the correct license quantities to maintain license compliance and meet its software needs, it may not be doing it as cost effectively as it could be. Ideally, there should be centralized software purchasing for the organization as a whole. This allows the enterprise to maximize volume discounts and avoid over-buying licenses.

If purchasing and license management aren't centralized, and different subsidiaries are purchasing software individually, there is much higher likelihood that idle licenses in one business unit will continue to go unused, rather than being reharvested and reallocated to another subsidiary that requires more licenses for the same application. This leads to the scenario where the organization as a whole is over-buying software. License compliance isn't the issue here; software cost control is the issue. In some highly complex organizations, it may not be possible or practical to have centralized purchasing, but it should still be possible to optimize license allocations and avoid over-buying software.

Software asset management maturity requires having the processes and tools in place to make optimal use of all software assets-maximizing application usage across the enterprise, and taking full advantage of license entitlements. Simply counting license purchases and comparing this to install counts is not enough. In fact, this approach is a very pessimistic one from the standpoint of cost control; organizations that take this approach will spend more on software than necessary.

Software vendors define license entitlements-product use rights, that dictate how you can use the software. Key vendors, including Microsoft, Adobe, Symantec, Oracle and IBM all define a wide variety of usage rights for their software products. On desktops and laptops, second usage rights may be afforded, reducing by half the number of licenses required in relation to install count. Fewer licenses, of course, means lower costs for these applications, but only if the organization is taking advantage of this entitlement. This is no simple task, as it requires the organization to not only have the ability to accurately collect software inventory data, but to also know who ‘owns' those desktops and laptops, what licenses have been allocated to those machines, and what usage rights come with those licenses.

In the datacenter server environment, where the highest cost applications typically reside, there are many product usage rights to understand and apply-virtual usage rights, clustering rights, failover/disaster recovery rights, and more. Proper application of these rights can again reduce license consumption, which lowers costs on server software licenses and maintenance. For example, Symantec provides Cold Disaster Recovery rights for its NetBackup product that allows one additional copy of the licensed software to be used on Cold Disaster Recovery equipment located at a Cold Disaster Recovery site as part of a cluster of production servers.

John Emmitt is a Senior Marketing Manager at Flexera Software, responsible for the Enterprise License Optimisation product area. For more information, visit the Flexera website.