Adding Intelligence to Asset Management

Question: What are some of the most common methods companies employ for software asset management? Can you briefly cover the pros and cons of these approaches?Halverson: I was amazed at the number of companies that don't have any (asset management methods) in place. Another method is receipts – going back and contacting vendors and then trying to reconcile what they tell you with your records, almost like a checkbook. A spreadsheet is probably the most common method, up through even the mid-size companies. Sometimes companies will bar code items, slap them into a database, and that’s it. So there’s no ongoing management. They just capture it at the procurement phase. And then obviously the on-premise solutions have been popular the last seven or eight years. And now you have SaaS.Question: In your research, you looked at companies’ licenses for Microsoft Office. I believe that you found that most companies overprovision Office. Can you tell us some of the potential areas you found for cost savings that could be realized through more accurate provisioning?Halverson: Microsoft Office represents more than 18 percent of all software expenditures in companies. It’s the number-one purchased application. And Microsoft is good at selling these EAs (Enterprise Agreements). Microsoft Office is also one of the most expensive applications. With our SaaS model, we have all of this information on different vendors – all of this aggregate data. We went through 460 companies – we tried to get a good sample, with all different sizes – and analyzed the numbers.So one of the areas we found, there’s this gold standard. Everybody’s trying to get these machines rolled out, and the only way to do that is to build an image. IT comes up with these gold-standard images, with the right versions of things like antivirus and all of the corporate software. They’d spend weeks and weeks to get this perfect image. Then after spending all that time, they’d just use that image. So those machines are going out there with pieces of software people are never going to use, never asked for and don’t care about. There may be only a small number of people that need a certain piece of software. Out of all those machines, we found about 2,100 servers. Out of the 2,100 servers, 1,600 had Office on them. And who needs Office on a server? Right there, you’ve got lots of wasted licenses.Question: Are companies more interested in software asset management? What market forces are driving this?Halverson: You’ve got companies like BSA (Business Software Alliance, which enforces copyrights on software produced by companies like Microsoft, Symantec and Adobe) doing a lot of software audits now. Why are companies doing that? Your hardware and software margins are getting smaller and smaller. The only place where margins aren’t small is in service and ongoing contracts. Companies aren’t making as much on their software, so they want to tighten up on the piracy. If I can go and find two or three big companies that aren’t in compliance, I can scare everybody and sell more agreements.There are a lot of software companies out there that do compliance. They’ll tell you, “You’ve got 1,000 copies of something installed, you’ve only got 750 licenses, so you are 250 licenses out of compliance.” But there’s no intelligence associated with it. Companies don’t know how much it’ll cost, the business implications of it, they don’t know how many of the 750 licenses they have are even being used – 100 of those licenses may be servers. That’s where we try to come in.Question: Specifically, how does your approach differ?Halverson: The Microsoft Office report is a powerful illustration of that. One of the companies we analyzed for the report had 1,200 licenses for Office. We looked at their environment, and they had 1,486 installed, so there were 286 out of compliance. With the traditional model of asset management, companies go out and write a check for the additional 286 licenses, and that’s where it ends. But we say, before you do that, let’s look at the usage. Of the 1,486 installed, more than 400 people weren’t even using it. So let’s harvest those licenses and you won’t pay a penny. You might not be able to downgrade your EA right away, but at least we saved you some money upfront. Harvest those licenses and get the unused number down.Then let’s look at the 1,000 people out of the 1,486 who are using it and assess how many need it. We all know that across all of the different versions of Office and Windows, the standard stuff is pretty much the same. Outlook, Word, PowerPoint and Excel are constant, no matter what platform you are on. So we analyze the use of those specific applications. If a user on a PC uses those four applications but nothing above that, then theoretically those users only need Standard. So if you’ve got anything else installed, then you’ve over-purchased. When you go to renew your EA agreement, you may only need 200 copies of Professional. We use the term “right-size.” We do further analysis where companies can drill down and see how many times people used software. When was the last time they used it? We want to get more accurate with what is really being used.