Understanding Software Asset Management (SAM) and Software License Management (SLM)



Consider that you are working as an IT asset manager in a organization of 15 employees using laptops, desktop or other computing resources. You are responsible for managing and tracking the software assets your organization uses and depends on. At this scale, you can easily purchase, manage and keep software assets compliant. You can identify what software you have, where it’s running, it’s respective usage and any redundancy.

Now on the other hand, take a medium or large organization with more than 500 or 1000 employees and even more. Manually keeping track of enterprise software purchase, licensing and respective usage would be a tedious and challenging work to do. A part- or full-time person might be able to manage the company’s software inventory and licenses to be in control and compliant. But at large scale, for long term, it will be challenging and almost difficult to manually or with tools with limited features to identify what software you have, where it’s running, it’s respective usage and any redundancy. This is where software asset management (SAM) and software license management (SLM) tools help in these growing scales.

Despite the company operations size, a resource is required to keep track of software application purchase, distribution and licensing.  It is vital for any company to manage software inventory and licences to keep software assets in compliance and in control.

Software Asset Management

Software Asset Management – also known as SAM is a business practice with focus on managing and optimizing the purchase, deployment, maintenance, utilization and disposal of different software applications across organization. SAM derives from ITIL initiative and it functions as key aspect in an organization’s business strategy of technology.

Companies can expect to achieve 30% savings in the first year and between 5-10% annually with an effective Software Asset Management (SAM) program – Gartner

SAM facilitates to identify what is currently installed, it’s running location, check redundancy and maintain software compliance. SAM helps to control and reduce the cost in several ways –  it identifies underused software licenses, unexpected software costs, avoid non-compliance damage payments. It also helps to optimize software investments within an organization to avoid over spend on software application licences and to improve productivity by having access to all manuals and materials of legally purchased software.

In addition, SAM reduces the legal risks which are related to license compliance and software ownership in coordination with software license management (SLM), which is described next.

License compliance: Agreeing to abide by the terms of a software license is known as license compliance. Every software comes with a valid license and protects the rights of software developers and is enforced by copyright laws. When a company uses unlicensed software, it is in a risk for losing reputation and may suffer from civil penalties or other charges enforced by law.

Software License Management

For SAM practice implementation, the software license management (SLM) is potentially the most important tool to keep track of software license expenses, monitor usage of deployed software assets and identify the opportunity to reduce license and support costs across the organization.

An efficient SLM tool can provide unified view of installed software assets across the network in terms of compliance and software usage. This information is helpful for  purchase planning with focus on cost reduction and savings.

License management projects can lead to projected savings of up to 35% of the total IT budget (Aberdeen Group, 2002)

In conclusion, a disciplined approach towards SAM and SLM practices/tool contributes not only to software compliance, manage license assets, efficient software usage but also to understand the software needs during organizational growth periods. It is a proactive approach in strategic software asset management.

(Stay tuned for my next post on how SAM/SLM works together and adds business strategic value towards technology management)


2 thoughts on “Understanding Software Asset Management (SAM) and Software License Management (SLM)

  1. Very Very commendable post …… A simplified but detailed working model explained here ….best for understanding basics


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