Opportunities for SAMs and IT Leaders in an Unstable Economy

ISAM founder says technology is “neither mature nor saturated.”

Software asset management pioneer and Information Systems Asset Management (ISAM) Founder and CEO Michael Swanson has an appropriately nuanced take on the relationship between tech and an unstable economy. But listen to him talk in the Origina webinar “Navigating the Storm: Managing Software Assets in an Unpredictable Economic Situation” and a singular guiding philosophy becomes clear – as technology continues its pace of change, businesses need to switch to a model that puts technology at the front of the business, not the other way around.

For SAMs and other IT leaders, the economic climate is an opportunity

In most regards, Swanson says, technology’s growth and potential have outpaced similar figures in the overall economy, with megavendors at the top of the chain enjoying particularly hefty fortunes.

The tech market is “neither mature nor saturated,” according to Swanson. Based on past economic trends, it’s fair to assume its influence will continue to expand at an exponential rate relative to overall growth. That marks a tremendous opportunity for the IT industry and especially software asset management teams – a way for stakeholders to demonstrate their value in an ever tech-dependent enterprise by driving digital innovation and increasing the value of mission-critical solutions.

Exploring megavendor tactics that cost companies

When it comes to generating revenue in tight economic times, megavendors have a lot of tricks in the bag, Swanson says.

Hardware capacity drives software demand. Looking at the industry from a sheer profit and loss perspective, the ISAM founder continues, increasing overall cost to delivery via pricing obfuscation tactics, added ELA segmentation/splitting, and aggressive audit triggers makes economic sense for megavendors because it allows them to make derive money from the same offering.

It just doesn’t add value for the customer, who has a conflicting need to lower software costs.

(RELATED: Read Budgeting In Turbulent Times: A Guide to Cost Optimization for more info on slimming software spend.)

“How do you sell more licenses at a greater rate than customer staffing?” Swanson asked as an example. “You split the licenses [and say] ‘I’m going to turn that one service into multiple services and charge for each of them.’”

For businesses, that means more initial cost as well as more possible loss in the form of audit findings, provided smart software license audit measures aren’t already in place. Audits themselves, Swanson said, being a highly popular means of profit and loss-focused revenue generation, and an easier tree to shake when complex rules lead to potentially costly misunderstandings.

“Increase of ELA sizes increases the risk of noncompliance,” Swanson says. “As companies are reducing costs, they need to renegotiate their ELAs; that will trigger an audit. Whenever you’re looking at buying new software, that can trigger an audit. Whenever you don’t want to increase your spend with a vendor, that can [cause] an audit.”

The value of ITAM and SAM in a tech-driven business economy

The conflict at play might cause stakeholders to feel like satisfying internal directives and vendor requirements is impossible to do at the same time. Swanson’s advice: “Know what you have and why you have it.”

Professionals in fields like SAM and procurement must band together with a cross-functional group of helpers within their organization to flourish. Swanson said teams like legal, financial, and tech, among others, all have an important place in the business-defining software decisions of the near future.

“You need to bring everybody in,” he said. “You need to look at the financial, the profit and loss. If you want to look at a technology transition, you’ve got the technical people […] it’s a coalition.”

When the entire team is there to understand the licensing, technical, working, and other tech-touching environments in multiple contexts, it’s easier to make top-level decisions with the correct nuance.

Listen to “Navigating the Storm: Managing Software Assets in an Unpredictable Economic Situation” here.

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