Software Asset Management : Stay legal and save money

More than four in 10 programs installed on PCs around the world were counterfeit, according to a 2010 study by analysts IDC and industry lobby group Business Software Alliance (BSA). That’s software with a commercial value of over £32 billion! Since software typically represents 25% of an organisation's total IT budget, it makes good sense to keep a close eye on how, where and what you buy. Paul Curran finds out more from the licencing experts.


27% of PC software used across the UK in 2010 was pirated - equivalent to £1.2 billion in lost licencing revenue to vendors, according to the BSA study. But the impact of software piracy goes way beyond income lost to the software industry, says Sarah Coombes, BSA’s managing director, EMEA, for anti-piracy.


“The UK IT industry is a dynamic sector that supports thousands of high-skill, high salary jobs and contributes billions of pounds in taxes each year, so we need tougher intellectual property laws to protect it,” she says.


Ignorance is no excuse

Nor is the problem purely down to overt criminals that sell fake software at cut-rate prices. Plenty of businesses seek to stay legal, but are buying too few software licences, according to the BSA report. Whilst 81% of PC users recognise licenced software to be more secure and reliable than counterfeit equivalents, it claims many simply lack a clear understanding of whether common ways of acquiring software are legal or not.


“In today’s downturn, midsize companies understandably look to secure the best possible price for their software, but they must guard against unwittingly purchasing counterfeit products from non-accredited suppliers,” says Martin Prendergast, managing director of Microsoft Partner and software asset management specialist, Concorde Solutions.


“As well as missing out on the productivity benefits of genuine software and risking the potential infections that come with bogus products, they’ll inevitably end up paying twice and perhaps incur financial penalties. As the saying goes, if a deal looks too good to be true, then it probably is.”


Yet ignorance is no excuse, says Prendergast. “Your software is a valuable asset, so it’s important to know what you have and how it’s used. Besides which, unlicenced software is a bad idea for midsize companies without deep pockets - if they get caught, they may be heavily penalised, not to mention the damage to their reputation.”


Exposure through over-licencing

Equally, he says, many businesses over-spend on licences because they don’t keep accurate records of what they’ve deployed. “Under most licence agreements, companies are obliged to maintain records of every purchase and upgrade, but many lose track of this process. So whilst they understand the risks of using unlicenced software, they struggle to work out which licences need renewing and often waste precious funds on licences they don’t actually need.


“Being over-licenced is poor business practice because although you're not legally at risk, you’re financially exposed. Moreover, of those businesses that do recognise their legal obligation or are prompted by vendor audits, many end up conducting licence compliance reviews with little or no return and, in most cases, unwelcome expense.”


This is where Software Asset Management (SAM) comes into play, says Prendergast. “It enables you to plan and control your company's software more effectively, so you can handle technological and organisational changes, and any associated risks. What’s more, by adopting SAM, you can continually monitor your compliance, which helps you make more informed purchasing decisions and ultimately save money.”


Reconciling usage with entitlement

Whilst there’s no ‘one-size-fits-all’ solution to software management, Matt Fisher, sales and marketing director at Microsoft Partner, License Dashboard, says the SAM process involves:


  • establishing what software is installed on your network and accurately identifying it
  • understanding how that software is being used; for example, is it sat dormant on a PC or is someone actually using it?
  • collecting all your licence information and verifying what your entitlements allow you to do
  • reconciling those different data sources against one another - i.e. an Effective Licencing Position (ELP)


“By developing and implementing a set of procedures and policies, SAM helps match your licence entitlement against what’s installed, so you can continually track that equation,” says Fisher, adding that Microsoft offers a combination of tools to get you started:


System Center Configuration Manager (SCCM), which is generally included in any Enterprise Agreement, is ideal as a ‘discovery’ solution for collecting audit data about your desktop infrastructure. It enables you to:


  • capture rich software and hardware inventory for all Windows desktops and servers
  • automatically distribute software to clients whether LAN, WAN or Internet-connected
  • deploy updates to Microsoft and non-Microsoft products
  • manage clients over any internet connection.


Fisher says the best solution for doing a similar job on more complex server environments is the Microsoft Assessment and Planning (MAP) Toolkit, a free, agentless tool that:

  • simplifies and streamlines infrastructure planning via network-wide automated software assessment
  • uses a tracking tool to produce server usage reports - tracking licences and simplifying the ‘true-up’ process
  • provides detailed information for analysing usage trends and planning future growth and licence acquisition
  • produces reports to determine server licence and client access licence (CAL) needs for server products


Fisher reminds volume licence customers also have the right to request a Microsoft Licence Statement (MLS) via their large account reseller at any time, detailing your entire transactional history for cross-checking.


“By bringing together auditing data from SCCM and MAP on the one hand and licencing data from the MLS on the other, we’re able to reconcile these data sources against one another and help customers quickly create an effective licensing position (ELP). This helps you get the most out of your volume licence relationships, guards against non-compliance, prevents unnecessary purchases, and reduces administration costs.”


Dealing with new delivery models

Having brought the management of on-premise software under control, Fisher says companies will still face addition challenges posed by new software deployment options; cloud computing, virtual platforms and associated new licencing models have all added complexity. All the more reason, he says, to take SAM seriously.


Midsize businesses probably don’t think about the licencing of their virtual estate until faced with an audit,” he says. “But they must remember that whenever they virtualise something, there’ll be a licencing implication; so managing virtual instances is just as important as managing physical ones. Besides, using SAM to track virtual licences helps you detect and eliminate the massive under-utilisation typically caused by virtualised server sprawl.”


Prendergast agrees: “The benefits of on-demand software and virtualisation can only be truly realised if they are properly supported by SAM; otherwise, businesses risk wasting capacity and using software improperly. “Worse still, the very benefits promised by these technologies might well come back and bite businesses if they’re not sufficiently cautious on licencing,” he says. “SAM discovery tools are getting better at recognising when instances are virtualised, so there’s no longer any excuse for being under-licenced, even in the virtual world.” 


Food for thought

Fisher likens the way some companies treat volume licencing to an ‘all-you-can-eat’ buffet. “Having paid a fixed price, they gorge themselves on software without realising the implications. What SAM helps them do is manage their licences more effectively, so when it comes to annual ‘true-ups’, there are no nasty surprises. 


“When all is said and done, companies should think of software management as a business benefit, rather than an obligation. After all, they’ll typically experience a 20% cut in overall software spend during the first year using SAM processes, not to mention the security and productivity benefits they’ll gain by using genuine, licenced products.”

Concorde Solutions:

License Dashboard :

Microsoft Software Asset Management:

Microsoft SCCM:

Microsoft Assessment and Planning (MAP) Toolkit: Microsoft Assessment and Planning (MAP) Toolkit

BSA/IDC Global Software Piracy Study, May 2010:


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