Market Analysis

Laurent Clemot (Australia) - IT Evolution Entering a "SAM 2.0" Era

You might approve or disapprove with the plan regarding National Broadband Network (NBN) development in rural regions, but one's got to admit that the recent elections showed how ICT infrastructure has become strategic for the development of the country, in many aspects

For the individual and the business, the development of a better broadband network to lower cost areas directly translates into capital savings opportunities, through the development of home offices and the relocation of city based data centres.

But above all, high speed brings more agility to the business, with new approaches to deploying and using software, with drastic hardware and operational cost reduction: Centralised application virtualisation, cloud computing, Software as a Service, ASP etc..., are not only a buzz, but a new ecosystem through which businesses become more agile, thanks to a lighter infrastructure.

With the fastest growing and most innovative ICT industry (12% growth rate over the last five years), Australian organisations are getting ready for this inevitable evolution, and prepare for new ways of consuming software. There is no big bang change or hasty adoption here, but more of a simple and pragmatic preparatory approach among the most prominent businesses of Australia. The seductive part of these modern offerings is the reduction or even elimination of the upfront capital expenditure: license cost, hardware cost, administration cost. The major obstacle though on the way to adaptation, for most decision makers, is the lack of visibility and the loss of control, as the offerings introduce subscription models, based on estimated or measured usage of the software: "how do I know the cost of my future software usage if I do not even know today how much I own, and how much my business uses, and needs?" In effect, most organisations struggle today with hundreds of legacy perpetual agreements, with complex licensing metrics and T&Cs, hard to decipher, and harder to align with the technical reality in the fields, making decisions for new and more flexible models literally impossible.

Therefore, the first step leading towards business agility is to get a clear picture of what the company owns and of what the business really uses and needs today, in order to be in a position to negotiate a model change tomorrow. These projects introduce new cooperations between procurement and operations to reconcile contents until now disconnected, to form some sort of "SAM 2.0" collaborative platform.

In 2009 and 2010, many large Australian organisations initiated application usage assessments and implemented systems to continuously measure their software consumption against their entitlements. This was probably driven by the increased number of software audits we saw after the GFC, and might also reflect the need to spend more wisely. In effect, by better knowing their current application usage, these organizations were already able to make significant savings, thanks to a better alignment between their software needs and their rights to use.

But above all, they gained the information they needed to drive their ICT strategy and become change ready: they now know their usage position, their costs under the current conditions, and hence can forecast their costs (and benefits) under the conditions of more flexible offerings.

It is hard to predict how companies will adopt these new opportunities and how this will transform our IT landscape in the long run. However, it is fair to say that having a clear visibility and understanding of the current rights, consumption and usage trends within the organisation is the path to an improved IT, that is business centric, cost effective, and ready to adapt.


Laurent Clemot is part of the Enterprise Licensing team at Flexera Software in Australia. He helps organizations analyze their software needs and maximize the software they own.



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