Blog Entry

Sep 20
2010 

Software Licensing: To SAM or not to SAM

These days it seems like there are multiple opinions about the decision making process of CIO’s as it relates to software license acquisition, management, and their respective budgets.  Multiple industry participants will wax eloquent on what the current generation of CIO’s will choose as their next move as a software acquisition strategy.  Will they try to implement some sort of Software Asset Management tool to help them tag and track software which they have licensed (and as the argument goes, thereby reduce their expenses by only paying for what is being used if their contract allows for that), or will they go to a SaaS model where pay-per-use becomes a standard service model that achieves the same goal, albeit quite differently?  View this article for one take on the CIO decision making process:  http://www.siliconrepublic.com/strategy/item/17491-the-cloud-is-more-secure/

One would expect both the SAM tool vendors and the SaaS vendors to have strong opinions about this, but it would seem that the ultimate question comes down to one of duration.  Duration in the sense that organizations with primarily on-premise infrastructure and applications will undoubtedly feel the pain of having purchased excess and unused licenses for certain applications.  However, the CIO’s of those same organizations are also probably being forced to ask if the decision to continue to build infrastructure and application capability on premise is really the long term solution. Do they not need to also consider moving to a cloud based platform?  And if so, wouldn’t the incremental investment in a SAM tool be a sunk cost with decreasing return and decreasing applicability as more and more of the ecosystem becomes cloud centric?

As the article mentioned above indicates, security, which has long been a prime target for cloud computing skeptics, is being addressed to a degree few would have imagined possible even twelve or twenty-four months ago.  The continued efforts to ensure service and security levels in the cloud will only accelerate the adoption of SaaS, which could spell trouble for the SAM vendors out there.  In the context of managing your company’s IT budget, the decision making skills of the emerging wave of CIO’s will have several new candidates.  While nascent, the success of several SaaS providers out there seem to indicate that fear of the new distribution platform is giving way to confidence that cloud based applications can be both cost effective, aligned with operational scope, AND secure.