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Software Asset Management (SAM) Overview

Updated: Feb 1, 2022

What is SAM?

Tools are deployed by IT organizations to establish and maintain inventories of hardware and software assets and to manage the life cycle of software assets from purchase through deployment, maintenance and utilization and all the way to asset disposition. As organizations grow in size, they can increasingly benefit from the adoption of a SAM solution that helps them optimize their IT asset expenses, manage software license compliance and keep track of growing and aging IT inventories. The key business benefits of SAM software be summarized as follows:

Increase Asset Efficiency - IT organizations can implement SAM applications to collect data on their software installations and usage. The data can be used to identify cost-savings opportunities in software procurement, whether by purchasing fewer licenses for underused applications or identifying opportunities to renew licenses in bulk at a discounted rate. SAM solutions help IT organizations manage their software assets more efficiently.

Manage License Compliance - Software vendors make millions of dollars each year by auditing customers who fail to comply with software license agreements. IT organizations can protect their firm's reputation and avoid financial loss by managing software license compliance with SAM tools.

Maintain Accurate Inventories - As organizations grow, they quickly acquire more hardware, software, and software licenses than can be tracked manually. SAM applications help IT organizations of all sizes maintain visibility and transparency of IT assets throughout the organization. This reduces the number of wasteful purchases and helps IT managers find more efficient ways to allocate their hardware and software resources.

Key Functionalities of SAM

Software Discovery

Software asset management tools enable IT organizations to keep track of their hardware and software inventory and monitor license compliance. In the past, this was largely a manual process where IT operators would maintain spreadsheets with information about IT assets.

Today's leading SAM tools offer automated software discovery, meaning that they can automatically detect installations and usage of software on the network.

Software and Hardware Inventory and Cataloging

Software and hardware inventory cataloging is one of the main drivers of software asset management. Without sufficient oversight of inventory within the IT organization, waste is inevitable as IT managers order excess licenses, servers, and workstations without any knowledge of viable alternatives that may already be at their disposal.

Software inventory is another key feature for SAM tools. IT organizations should look for a tool that tracks instances of software installations on the network and that can be used to determine exactly how many used or unused licenses the organization has for each application.

Software Usage Assessment

SAM tools that offer software usage assessment as a core feature can frequently help IT organizations find ways to generate significant cost savings by re-allocating resources.

License Compliance Monitoring

Software vendors have been making huge money by auditing and litigating customers who abuse or misuse their software and breach software license agreements. License compliance monitoring could be the most important feature for SAM tools. Today's industry-leading SAM tools include features that can help you proactively monitor your inventory of software licenses and detect non-compliance issues before they can ever be discovered in a software vendor audit.

Fig 1.1 Architecture of a typical SAM Product

Asset Depreciation

Software purchased for use is considered a fixed asset by general accounting principles, meaning that corporate organizations can depreciate purchased software on their taxes to obtain an income reduction and reduce their tax liability. Your software asset management system should track the total cost of any software your organization purchases and depreciate the software over time according to your accounting rules.

Audit Scheduling

If your IT organization purchases software licenses from a major software vendor, you should anticipate that you will receive at least one software audit request every three years.

User-Friendly, Automated Reporting

SAM tools with automated reporting features make it easy for IT managers and executive decision-makers to quickly access the high-impact information needed to make important decisions.

IT Purchasing System

Software asset management tools that incorporate an IT purchasing system can help IT organizations consolidate procurement and licensing information and make it easier for IT managers to correlate purchasing data with inventoried assets.

Global Overview of the SAM Market

The Global Software Asset Management Market was valued at USD 1.28 Billion in 2018 and is projected to reach USD 3.83 Billion by 2026, growing at a CAGR of 14.7% from 2019 to 2026.

The software asset management market is expected to grow significantly in the coming years due to an increasing need for managing the lifecycle of assets. It is driven by the increasing number of audits in an organization, the complex nature of the licensing schemes, high expenditure on the licenses and over compliance. The ongoing technologies in the software assets management market are virtualization and cloud solutions which are resulting in various growth opportunities for the market. However, the market faces certain challenges as the software licensing is complex, budget constraints, lack of awareness and a low order of importance for the adoption of software asset management solutions and services.

In the MENA Region, SAM CAGR is expected to grow between 5% to 8% from 2021 to 2026.

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