The Future of ITAM and SAM in the Age of SaaS

While SAM professionals focus on driving vendor compliance, operational efficiency, and increased ROI for software assets, recently, many have confronted a new challenge: Managing the growing use of SaaS.

This new software environment dramatically alters the practice of traditional centralized IT and license management. Case in point, IT industry analysts IDC now projects that up to 70% of all business application spending now occurs outside IT’s budget. More and more teams and business units now handle software acquisition – not just IT.

Why? The new toolset SaaS represents is a simplified, accessible, and low-cost way for companies and employees to purchase and use software. Gone are the need for server- or disc-based deployments. And with monthly subscriptions rather than perpetual licenses, asset managers no longer need to worry about compliance audits.

To gain a better understanding of the fundamentals affecting this shift in the software landscape, Connor Consulting Executive VP Rich Reyes, an experienced SAM consultant, recently hosted an online conversation with Zylo’s co-founder and VP of Services and Customer Success, Cory Wheeler.

RELATED: Watch now The Future of ITAM and SAM in the Age of SaaS

Their discussion, summarized below, specifically sought to answer what role do ITAM and SAM practitioners play in building and maintaining modern ITAM strategies? How are these practitioners affected?

The Difference Between SAM and SaaS Management

In the last five to 10 years, the role of software asset management has changed as more businesses adopt cloud-based or “off-premises” software deployments. Before this new deployment approach, managing software across an enterprise was comparatively easy.

Software lived on-premises and was highly visible to a central IT asset or software asset management team that directly controlled all software actions, including sourcing, purchase, acquisition, deployment, provisioning, and renewals.

But the advent and growing use of SaaS has vastly changed the landscape of enterprise software. Now everyone can be a buyer.

From enterprise IT teams purchasing mission-critical applications deployed across the entire organization to business units or departments purchasing tools for specific functions such as Marketing, HR, or Finance to individual employees making direct purchases via expense reimbursement, SaaS ownership can exist on multiple levels.

This change in ownership has now made SaaS a fully distributed sourcing category in nearly every enterprise–for better or worse; IT no longer makes every software decision.

However, when distributed ownership exists, a central team must be enabled to drive visibility into the category and the organizational strategy. The goal is to create maximum value from these cloud-based tools. With their experience and skillset, SAM professionals are positioned perfectly to add SaaS to their management portfolio.

Expanding SAM to include SaaS Management

We’ve talked in the past about how SaaS has changed the ITAM landscape, especially in comparison with SAM.

Why don’t traditional SAM practices account for SaaS? For one, SAM is generally focused on driving compliance with established contracts and avoiding the risk of a software provider’s audit.

But driving that same type of compliance is not possible with SaaS. There’s not an agent that can be dropped an internal network to monitor provisioning or license utilization because SaaS is deployed via the cloud.

SaaS is ongoing management – it’s not a practice that revolves around a one-and-done annual audit. SaaS management is all about the continual discovery of the current environment. It seeks to answer questions like, how many applications have you purchased? And which types? How many have been provisioned? And how many of those licenses are active?

Do SAM-based principles still apply in the “New World” of SaaS management?

Yes, the most significant difference (as noted above) is that SAM professionals need to take a proactive approach to manage cloud-based SaaS rather than a reactive approach. Play offense and ask questions to look for right-sizing opportunities that can lead to cost savings.

However, some approaches carry over, specifically, it’s essential to analyze the people, processes, and technology that impact the software environment.

Look at these factors to seek out opportunities to establish improved governance to regulate the environment by promoting consistency and repeatability to mature a SAM and SaaS management program.

It’s also important to note that there’s no silver bullet that will solve SaaS management completely.  However, it is essential to do the due diligence to select the right tool to ensure an accurate view of how IT assets are deployed, including SaaS.

Enterprises are racing towards a cloud-first future and embracing business transformation through these digital tools, so it’s critical to include cost governance and risk governance in those equations.

SaaS Management Strategy

So a SAM professional who has mastered the majority of software asset management strategies in their organization may ask, “What is the ideal state for a SaaS management strategy?” Ideally, an effective SaaS management strategy supplies continual answers to these three questions:

What are we buying?

The first step of any SaaS management strategy begins with the discovery of the current state, which means understanding what the company – as a whole – is buying. Applications acquired by employee expense comprise as much as 50% of all SaaS application inventory in the average company.

Who is buying?

No matter what is purchased, attributing ownership is the next pillar in any SaaS management strategy. Purchases can come from central IT teams purchasing enterprise-wide, mission-critical applications, business units acquiring function-specific tools, or individual employees buying software. For employee purchases, in particular, we find that one in five employees in the typical organization purchase SaaS.

How is it being used?

With the questions of what and who answered, the next pillar is gaining an understanding of usage and utilization. For many organizations, this means understanding the differences between how many application licenses have been purchased, how many have been provisioned, and how many are being actively used by employees.

In an ideal SaaS management world, the answers to these questions become application attributes and details stored in a centralized system of record – usually maintained by a professional software asset manager, or in more progressive organizations, a SaaS manager.

This system of record sets up a sort of “promised land” here every owned application is available in real-time and includes every facet of detail needed for strategic decision-making, including ownership, cost, renewal dates, contract details, and more.

How Can Companies That Do Not Currently Have a Saas Management Strategy Get Started?

Finding a starting point can be difficult. But the first steps include assessing the current state of the SaaS environment and identifying gaps in knowledge. Then, build a roadmap based on the desired end state that provides for actionable steps and addresses both on-premise and cloud-based assets.

It’s also important to start getting more proactive about SaaS assets and tools. As on-premises software providers move increasingly to the cloud, expect to see vendor audits to verify license and usage as a factor in SaaS management strategy.

Getting Ahead in the Marketplace by Leveraging SaaS

The shift to cloud-first software for ht enterprise represents an opportunity to seize a competitive advantage in the marketplace. Businesses that take this opportunity have the chance to leverage this shift and reduce software waste, modernize their IT environments, and transform their business.

Major enterprise-focused publishes like Adobe, Microsoft, SAP, and Oracle are all moving their customers to the cloud as they recognize the benefits of the SaaS revenue model. In 10 years, the majority of all software deployments will be cloud-based. The downside is this makes oversubscription easier and discovery more difficult.

Companies who are seeing their environments shift to primarily SaaS tools need an intake and governance practice for SaaS that acts as a supplement to the best practices established by SAM. If organizations don’t have a focus on how SaaS is growing, they can be caught by surprise.

From an IT team perspective, SaaS represents a growing hole in the SAM portfolio. The longer IT teams go without discovering, managing, reporting, or optimizing SaaS as part of their IT infrastructure, they farther behind they will be to their competitors. Some of the most progressive and forward-thinking IT groups are using a best-of-breed approach for SAM and SaaS that takes the very best elements on-premise and the cloud.