IT Asset Management Industry’s Top Emerging Trends for the Next 5+ Years
Join Anglepoint’s Chairman and the ISO ITAM Standards Committee Chair, Ron Brill, for an overview of the 10 leading trends in IT Asset Management for the next 5 years.
In this webinar, Ron Brill will discuss how IT Asset Management programs will adapt to address the evolving needs of the digital business and become more deeply integrated within organizations.
A few of the topics that Ron will cover include:
- Technology Business management (TBM)
- Evolving Licensing Complexity
- Composable Business
- And more
Meet the Presenters
All right. Hi everyone. Welcome to our last webinar of the year, by way of very brief introduction, I’m Ron Brill, President & Chairman of Anglepoint. For those of you who don’t know Anglepoint, we’re a global software asset and cloud asset management firm. And for the last three years we’ve been leading the Gartner Magic Quadrant for our industry.
Outside of Anglepoint, I am chairing the ISO Committee for ITAM Standards. That’s the committee that owns the ISO 19770 family of standards, which has participants from 25 countries working on the ISO standards. I’m also the project editor for the next edition, the fourth edition of 19770-1 for ITAM system.
As part of that I also participate in the ITAM forum on the board of trustees and vice chair. And I also co-lead the ITAM and FinOps special interest group as part of the FinOps Foundation. Again, we’re very exciting to be speaking with you all.
One of the things we were hoping to do today is really focus on what we’re seeing the ITAM industry heading in the next five plus years. And this is based on our daily work and conversations with hundreds of enterprise clients around the world. That’s the primary source. Most of those are within the Fortune Global 1000 and so on. So getting really good perspective from that as well as what we’re hearing from the analyst firms industry events.
And so we’ve consolidated all those different inputs and put this together, which is the top 10 trends that we’re able to point to at this point in time. And they are ranked in order of impact, although that is not a very scientific exercise.
It’s more directional as far as how much impact those are going to have on what we do in IT asset management. I will say the focus here is really a long-term perspective. There are obviously a lot of shorter-term trends that are happening as well. And maybe if we have time today and we can touch on those things like inflation, recession, software vendors increasing their maintenance fees and other things that are happening, kind of skill shortage, higher turnover in the industry and so on. They’re more short term that we’re not going to touch on today. So, these are more the long term items.
And on some of those I’ve spoken in the past. I’m going to give a very brief overview. As you can imagine, we have effectively 45 minutes to cover 10 topics. So we’re not going to be able to do each one of these justice, but the idea is to have a high level overview, touch on some of the key points, and really happy to continue the discussion on each and every one of these.
There’s a lot more on each and every one of these and you’ll be able to touch on today. So let’s get started. The first one, as you can see is FinOps. We’ve been talking a lot about FinOps. It’s probably the most significant shift or impact on IT asset management that we’ve seen the last decade or two for a number of different reasons.
And the impact is just starting to get felt for many organizations. They’re not there yet as far as what their ITAM programs are doing about it. So, let’s touch on that very high level. As by way of background we’re looking. The IT infrastructure nowadays we, it’s really hybrid in almost every organization, certainly in the larger organizations, but even small organizations have a hybrid infrastructure.
And these are some of the three main components of that infrastructure is on-prem. There’s cloud infrastructure and platform services, and there are SaaS and probably other components as well. Mobile device and others are not in here. And if we just look at it from the perspective of cost of IT assets.
Which is what we are interested in primarily. There are a number of other aspects as well, but just from that perspective, right? There’s the cost of the SaaS subscriptions, there’s the cost of the physical infrastructure and the software that runs on that physical infrastructure. And then for cloud infrastructure platform services, there’s the cost of the virtual infrastructure and the software that runs on that virtual infrastructure that can come from one of three main sources is its proprietary to the cloud service provider.
It’s third-party software. Think Oracle, IBM. Or it’s homegrown software, third party software, you can acquire it through two different channels, either through a marketplace that’s run by your cloud service provider or bring your own license. Use your own traditional licenses that you have as part of enterprise agreements and so on.
The interesting thing here is that Gartner mentioned that for an increasing number of organizations, this one box here, the cost of the virtual infrastructure is greater than the cost of all the software components combined on-prem as well as SaaS combined. And the trend is definitely for this to get even larger.
With this being the larger piece here if we are ignoring this as ITAM we are really risking not remaining relevant to the business in the long term. So this one is the largest box for many organizations. It’s becoming even larger. It’s a very clear trend. We have to look at this box if you want to remain relevant.
And there’s a lot of reasons why it’s hard to do that. We’re not going to touch on all of them, but it’s very complex. Hundreds of features and pricing options every year coming out from every one of the. Cloud service providers and most of our clients, for example, are multi-cloud, right?
So it just gets compounded very difficult to analyze, right? The, a monthly bill for AWS could be hundreds of millions of lines for just one month. It’s very difficult to get your hand. It’s around that and number of other challenges as well. And all this leads to the need to have cloud financial management.
The most dominant methodology out there is FinOps and by the FinOps Foundation really encourage you to check them out. If you’re interested in FinOps, lots of great resources. Participation is free for end user organizations. This the book that kind of started it all and have certifications and other things.
So really great resource for anything FinOps. The methodology is based on three main phases inform, optimize, and operate. During Inform, we are really looking to get transparency into what the data is. During optimize, we’re looking to reduce costs and during operate we’re looking to automate a lot of the procedures that are happening.
This structure is actually similar to the structure, the tier structure that’s currently in 19770-1 for ITAM. So if you’re think in form, it’s really the first tier in ITAM is trustworthy data. So it’s equivalent. The third tier in the item standard is optimized.
Optimization, which is equivalent to the optimized phase. And the life cycle integration, which is a second tier in ITAM is equivalent to the operate phase. So it’s a similar three phase methodology overall. There’s work that’s been done to, to see how it aligns at a much more granular level that we’re not going to touch on today.
But just keep in mind that during the informed phase, it’s really all about agreeing on it, the taxonomy within the organization tagging, which is kind of metadata you can attach to cloud instances identify things like workloads, applications, business units, and so forth.
Once you have tagging deployed, you can create dashboards that report on cloud usage and cloud costs to different things and provide that information near real time to all the relevant stakeholders who need that information, be it engineering or others. And then, showing that information back, so more optimized decision could be made.
So that’s inform again, basic thing. If you don’t have that, you can’t do anything else. You’re essentially blind. Next, there’s optimization. We’re not going to go a whole lot of details here, but there are two types of optimizations that happen within FinOps. You can optimize how much of the cloud you consume, the quantity.
Let’s assume that the rates, the pricing is fixed for a moment. How can we reduce our consumption to really what we need, right? So, this activity, which has to be decentralized and done by the engineering. Are really things like looking at unneeded instances on the instances.
Smart scheduling – turn it off when you don’t need it. Right sizing – making sure it’s not over provisioned for the workloads that are actually running on it. So, these are some of the activities there. And then the other type of optimization is pricing or rate optimization. So, assume from kind of the opposite, assume the consumption is fixed and you’ve already optimized it.
Now how can we get the best rates on that optimized consumption? This includes things like contract negotiations, savings plan, reserve instances, part instances choosing the right provider for the right workload and a number of other activities. This is typically done in a centralized fashion.
But again, FinOps and ITAM facilitate both. As far as the tooling and the reporting and the capabilities and the guidance. And one activity is more centralized. The other one is more decentralized and a lot of really great knowledge that’s evolving around this and best practices. And it’s amazing what some organization will be able to do from a cost saving perspective.
Organizations that don’t do this typically would have waste within the cloud that’s, 30 or more percent of their spend. And considering that this is the largest box, as we saw on the previous slide, you can imagine how critical doing this is in the last phase in the FinOps methodology is really about.
A lot of it is about automation, metrics driven, cost optimization and other activities because of the kind of ephemeral nature of cloud instances where an asset can live for days and hours and minutes or seconds. Trying to do any kind of manual optimization is really not ideal.
You’re leaving a lot of money on the table, right? So what we’re trying to do is create automation to ensure that optimized decisions are made from the very first moment. And it’s really the only way to have any measure of control within the cloud.
It’s a paradigm shift as well. If you think about the ITAM equivalent of this, we’re used to doing, annual license reconciliations for a software vendor or quarterly reconciliations. Or maybe for a very critical vendor, it’ll be a monthly reconciliation. That doesn’t really cut it anymore in the cloud, right?
It must be done near real time. The only way to do that is through automation.
There are a lot of reasons why ITAM and FinOps need to be collaborating, whether they’re both part of the same function or they’re two separate functions, but working very closely together. They really have shared objectives, shared principles, shared domains. We didn’t get a chance to go into that level of detail, but that exists.
There’s a separate webinar that I did on FinOps. You can find more information there. There’s more information still. They really address each other’s mutual blind spots. ITAM looks at things that FinOps doesn’t and vice versa. Together they really get that one infrastructure view that’s critical.
You can’t separate the infrastructure. It’s one hybrid infrastructure. You can separate sometimes the vendor relationships, right? The same Microsoft agreement can have on-prem license provisions as well as things like Azure commit, Azure, higher use benefits and so forth. So you really have to look at those agreements holistically from a vendor management perspective as well.
BYOL is another example. ITAM can’t do its job without looking at consumption of licenses in the cloud, which FinOps typically would not look at. They’ll have visibility of the cloud instances, but not too much of the third-party software that runs on them in many cases.
As we mentioned, multiple procurement channels for the same products. Sometimes you can buy it off your enterprise agreement that’s already been centrally negotiated by procurement, or you can buy the same product by going to the AWS marketplace and paying for it. It’s part of your monthly cloud bill on a subscription basis.
Right? And so it’s really all those different sources of procurement channels and all the other things really necessitate those two functions working closely together. If you’re interested in this space, I really encourage you to join the special interest group as part of the FinOps foundation that’s talking about this.
All right. So FinOps is definitely having huge impact. The other one I want to talk about, our second one is technology business management, TBM, which is really one specific methodology to implement IT financial management, ITFM. So you may be familiar more with ITFM as a term rather than TBM.
TBM is a specific. And what is TBM? It’s really trying to help organizations translate technology investments to business value. So basically, allowing to run IT like a business, run IT with the business and allow a conversation to happened between finance IT and the business units. And using taxonomy and language at all three parties understand versus just IT or just finance.
And there are a number of benefits that could be driven and could be affected once you have that in place. What is it based on? Based on a method methodology. It’s the TBM council is behind encourage you to check them out. Apptio is the firm that’s behind the TBM Council. There’s a book that came out that highlights, outlines the methodology, their certifications and they have really great resources about TBM.
And again, this is just one methodology for doing IT financial management. You can, you could follow any other there’s a whole lot of change once you look under the hood. So, this is the picture of the taxonomy that we’re talking about, right?
Finance’s view of the business is really around cost. Cost pools, the general ledger entries, right? That’s how finance sees the world of IT through the general ledger ledge, ledger entries, and so forth. So you see some of the main categories here: hardware, software and sort of services, which includes cloud and SaaS.
That’s where IT lives. Those three are of the most interest to us, right? So if you’re paying Oracle $1 million a year, it’ll be part of what measure here in the software. That’s cost view, but it doesn’t view itself that way. It views itself mostly within the context of IT.
Which is the term that the TBM methodology uses. That’s how it runs itself internally. That’s how it refers to itself. As well as looking at things like infrastructures and platforms and so forth. So, this is how it views itself when you get to what is running on those infrastructures and platforms and so forth as well.
Those are things like applications, products, and services, and that’s the first level that’s actually visible to the business as well, that the business has an understanding of. And those applications, products and services then drive things like customer and partner facing applications and solutions enabling business units and so forth.
So this is the business view of the business, which is essential. What you see here, plus maybe applications, product, and services. This is the IT view of the business, and this is the hospital, which is the finance view of the business. What this taxonomy allows you to do once you have that in place, is really to have that translation from one end to another and be able to express cost in terms of the business value that they bring.
So for example, if you’re paying, going back to what we said before, you’re paying Oracle 1 million, you’d be able to say that, 50 K out of that 1 million is driving at the end, application X, y Z’s part of business unit A that’s driving 10 million of revenue for the business. Right?
You’d be able to do that translation all across. If you look at just the FinOps view and you can see those, the specific elements that FinOps touches on FinOps was designed from the start to fit within this model. So for those of you familiar with the FinOps methodology, it’s really all about that, having that transparency, have that show back, having using unit economics to express value within the cloud and so forth.
So FinOps does TBM just for that cloud slice of it. But TBM is really all of it, not just the cloud. And the interesting thing as well here is if you look at sustainability, which we’re gonna touch on in a minute it can actually fit very nicely within this overall model because it’s essentially if, just looking at the taxonomy piece of TBM, it’s a chargeback mechanism on a chargeback on steroids, if you will. It does many other things, but just this translation model, this taxonomy, you can view it as a chargeback model and almost like it’s a black box where you put something on one end, and it allocates it to based on the rules that you’ve built to the right business units and applications and so on.
And the business KPIs be revenue daily users or what, whatever your unit economics metrics are. You can put dollars on one end and have them allocated, or you can put tons of CO2 and have them allocated the same way. So if you know that, an external let’s AWS you get a report from them monthly that says, this is your carbon footprint this last month, you’d be able to allocate it using the exact same model to all the right customer partner facing applications and be able to say each one of them, what is the carbon footprint that application generates.
But as we mentioned the model is TBM is about a lot more than just a fancy chargeback mechanism, although that’s the basis for it. What it really allows you to do, and there’s a whole methodology behind it, is have what TBM model calls the four value conversations, which essentially are the four key questions that every CIO need needs to ask themselves, right?
And this is almost like the job description of a CIO. Two of these questions have to do with running the business. Two of these questions have to do with evolving, growing, changing the business, right? Are we delivering the right performance at the best price?
Are we spending our resources to get the biggest return possible in those resources, right? Are we maximizing our innovation dollars? Are we improving the speed of the business and so forth? Once you see this, then I think it all comes together in the sense of the value that ITAM and FinOps bring to the business.
Because if you go back to the previous model, these three boxes, cloud services software and hardware are where most of the heavy lifting. Takes place, right? For many of these others, it’s relatively straightforward or more straightforward. I would say this is where a lot of the heavy lifting is happening, and this model allows you to really just take it to the last mile and make the data relevant to the CIO by supporting this, so in essentially what TBM does for ITAM and FinOps, first of all, it’s the glue.
Where, FinOps and ITAM hangs together at the level where they meet and work together to provide the CIO with that single pane of glass or transparency into the IT organization and enabled the CIO to have conversation with their C-suite peers across the organization and really elevate the discussion and show the value of what we do.
And that’s one of the things that that I like about TBM and IT financial management in general. With the pace of decision making within our organization having significantly increased post pandemic, this, these conversations are becoming going to become a lot more relevant to everything that we do.
Essentially what this conversation obviously does is move the perception of IT from being a cost center to being a business value driver. And as you do that, you’re evolving the conversation from one that’s focused on cost to one that’s focused on value. And this is really what we’re trying to do in the model.
And again, ITAM already does that to an extent. TBM does that for all of it and brings it all together in a more consistent manner that would be relevant for a CIO to consume. There are a lot of case studies that you can find them on the TBM council of large companies that have transformed themselves with tb m and again, just as a reminder, big part of what TBM is really ITAM and FinOps.
All right, let’s talk about sustainability. Again, a major trend that’s happening it’s going to hit all of us over the next few years in a big way. So, who cares about sustainability. The general term that you may have heard use is ESG, environmental social governance.
Sustainability is kind of part of environmental, also some governance aspects to it. And sustainability is really about a lot of things. One of them being, the major one that’s getting a lot of attention is greenhouse gas emissions. But it’s certainly not limited to that. There’s talk about, wasting water, talking about just waste in general, and then all of other things not hurting the environment more generally.
But let’s just, we are going to focus just on greenhouse gas emissions for now, but just to know the picture is much bigger than that. And there are a lot of drivers for that. It really doesn’t matter if you believe in global warming or not. This is happening. Regulators are asking for this with the CSRD corporate sustainability reporting directive within the EU starting have requirements starting in 2024, whether it’s the SEC announced requirements for US public companies to report more consistently on what they do in this space.
IFRS and other regulators are asking for this. Investors boards are asking for this. Management is asking for this. There’s been all kinds of surveys showing. Every year, the percentage of CIOs that consider sustainability to be a top priority increases dramatically from year to year.
There’s some research on that by Gartner and others that you can see. So, management and boards and managements are caring about this, and that means CIOs are going to care about this one way or another as well. Consumers and partners care about this. It’s many companies in the tech salesforce.com for example, they already require their vendors to have commitments in their contracts around getting to zero carbon emissions and other objectives as well.
Employees are asking for this, right? Particularly with the younger generations. They’re deciding which company they want to work for based on how green that company is. So, this is coming from a number of different ways. It’s viewed on, and I’m borrowing some graphics here from Gartner.
It can be viewed as in three scopes. There’s upstream activities. So this is everything that happens before the company does its business whatever that businesses, service or manufacturing, whatever it is. So this are things like the company, procurers, business travels, transportation, employee commute, everything that happens.
Before it gets to the company it’s a scope three. Scope two is the electricity and water and everything that’s being purchased by the company. Scope one is what emissions are being generated by the company assets directly. And then the other part of scope three is downstream, which is what happens after the product, or the service leaves your leaves your company.
And there are different types of emissions. They’re collectively viewed as CO2 equivalent, CO2 E because it’s inconvenient to talk about different types of emissions. But this is the general picture and when you hear about scope one, scope two, scope three you have a better feel for what is being discussed there and how does that impact IT.
In general, how does that impact IT? IT certainly generates a lot of carbon emissions. We’re going to touch about where those come from. And what’s important to mention here is that the magnitude of the, what IT does, carbon emissions are generated by, it will change from organization to organization.
So, if you’re technology-based organization, take Netflix, for example, right? A hundred percent of their, or nearly a hundred percent of their carbon footprint will be generated by their IT. If you’re a company like FedEx or UPS, right? Probably 99.999% of your carbon footprint is generated by your fleet of airplanes and diesel trucks around the world and so forth.
And it will be a much smaller portion of that. But with whatever portion, IT is within the overall carbon footprint. There’s what is the internal distribution within IT, and this is what Gartner has been saying is a typical organization today. And of course, it varies from organization to organization.
One observation here is that outsourced services, which is where things like. Cloud and SaaS. Right now, they’re saying in a typical organization that 18%, that is by far the fastest growing element, right? So, if we are looking at this picture, five years from now, I would expect this to be the dominant tower within where carbon footprint is generated as part of IT organizations.
And there’s an ISO standard for this 14001. It’s a management system standard. So just like the 19770-1, it’s based on the Deming cycle of continuous improvement plan, do, check, act and it’s a best adopted national standard for sustainability. There, there are three main activities, right?
You need to understand your requirements. What are the organization’s requirements? Could be your regulatory requirement or your board or your CEO committed to certain commitments that go above and beyond what the regulatory requirements are, which is sometimes the case.
So actually, more than often that’s the case. Then you need to investigate how you measure it. How do you measure carbon footprint within IT? And then how do you look into optimizing and reducing that carbon footprint? What I should have mentioned as well that within IT, what tends to generate the carbon emissions is really the IT assets.
If you look at, okay where is the, where are the emissions coming from within IT, it’s really all tied to the assets and the life cycle of the assets. And guess who is the function that looks into it? Assets in the, in that lifecycle? It’s ITAM and so ITAM I believe will have a huge role.
In being the focal point within IT to drive initiatives related to sustainability. Again, just because we are the function who looks at the lifecycle of the IT assets, and we could look at it distance version of on-prem versus cloud on-premise hardware, software, hardware is the most often discussed area.
Sustainability for within ITAM talking about what happens to the hardware, before it gets to the organization, the power consumption within the, during its useful life. And then things that you can do to improve that. You want to have effective terms and conditions in your contracts with your suppliers.
You want to extend the life of the asset. Even if you extend the life of a server or a laptop by one year, it can have a huge on the carbon footprint many of the recent regulation around right to repair and so forth actually were driven because of sustainability concerns. More than anything else.
And then there’s of course, the whole discussion around the circular economy, right? If you can reuse the equipment, if you can refurbish it, if you can use parts use it for parts or if, or even for raw materials or if you can deny it. All those things. Really drive down your carbon footprint.
You’re able to claim credits for those things. That’s a huge discussion that’s happening. And of course, eliminating a needed hardware and right-sizing the hardware. Sure, it’s not of respect for what it needs what needs to run on it and so forth. But a lot of discussion hardware.
But I would say actually most of the impact IT assets on, on sustainability is going to be around software and cloud by far. And I believe we are actually going to see the discussion shifting from a focus on hardware only, like it has been so far to a focus on software and cloud, because that’s where most of the impact is going to be. So, with software, there’s some carbon footprint in development of the software.
The hardware and power requirements are heavily impacted by how efficient that software. There are initiatives like the Green Software Foundations and so forth that are looking to promote software development to minimize environmental impact. So, the software will be more efficient, will amount less power.
And why is that important? If you look at a typical server and this is just directional, it’s not exact numbers, right? If you look at the typical server, only about 25% of the power consumption is generated by the hardware, plus the operating system that runs on that hardware. The remaining 75% of the power consumption is really driven by the software, how efficient that software is, what workloads are running on it how well is it architected, you.
Sometime, like a cluster architecture could be more efficient than others and so forth. We’re not going to be able have time to get into this, but 75% of the power consumption is actually driven by software, not the hardware. And so, if you’re missing that piece you’re missing a huge piece here.
And of course, everything we do in ITAM to remove shelfware and so forth has a direct impact on the corporate footprint as well. Then of course, cloud in one sense, it’s easy because carbon emissions are, have to be self-reported by the provider and everything we do is part of FinOps, like we talking about elimination of are needed right sizing and so forth.
Efficient scheduling and so forth. All those have a direct impact on earning, reducing cloud consumption. Again, this is even just CIPS is the largest box as we saw within the hybrid infrastructure. And if you assessed it, you can see that this one here is going to be the main way that you’re going to be able to control your carbon emissions.
I attended a Gartner conference last week, the IOCS conference where one of the analysts said that carbon emissions in cloud could be 90% lower as compared to long term as compared to running those workloads on prem. For a number of different reasons related to the cloud providers, economies of scale, and their ability to drive much higher utilization.
So, if a typical utilization in the data center is 40%, when that servers that are running by being run by AWS and Azure. It’s, 85 plus percent. And a number of other reasons. They’re able to tap renewable energy in a much better way and then do a lot of other things. Again, a lot of opportunity for ITAM to play a leading role within IT and being the focal point for sustainability.
And again, this is an item that’s on the CEO’s agenda, right? And I think it’s a huge missed opportunity for ITAM.
All right. Let’s talk. More briefly about the remaining ones. We have subscriptions, right? Whole economy is moving to a subscription base. There’s of course SaaS marketplace acquired software is becoming more and more mainstream.
We cover our main way companies are procuring their software compared to traditional enterprise agreements and so forth. Many software vendors have announced they’re going to gradually transition to subscription-based licenses for on-prem as well.
So, moving away from perpetual licenses into subscriptions. So, the whole direction is very clear in the industry. It’s going to be a big part of what ITAM does. The methodologies are different. The approaches are different. This is going to be a major item and become even more so in over the next few years.
So, if this is not something you’re looking at you definitely should.
Complexity is continuing to increase instead of decreasing. If you use some of the emerging technologies many of them related to cloud, but not all, virtual containers. Kubernetes have interesting implications from a licensing perspective when you’re doing running things like with serverless and function as a service.
Functional platform of the service robotic process automations, bots, and APIs. Indirect access also presents new challenges to how you interpret license agreements and use cases. Hybrid use of bring your own license and so on. So, the overall message here is that licensing complexity is going up, not down.
And we’re definitely expecting to continue to see that happen.
Next one is composable business. And this is a term that Gartner has coined. Essentially what it is citizens development used to be viewed as a bad thing a few years ago, right? Call it, shadow IT, rogue IT, and so forth. But now it’s considered mainstream and actually considered a best practice, right?
You want your business units to use their business technologies, people. Tech savvy within those business units to, to drive their own IT innovation, to build application, to subscribe to SaaS. You want them doing all these things. And again, this is a pendulum has shifted, right? It’s considered something that really helps with improving the agility of the business.
Respond to the market. Improving resiliency, improving innovation and so forth. So, moving away from, okay, if a business unit needs something done, they ask central IT and it will get to IT if it has budget and resources within, a year or two. That’s not how businesses are run anymore, right?
If a business unit needs something, they need it now and they’re going to do it. And so, the role of IT and the role of ITAM within IT is changing. From a command-and-control model, which kind of where ITAM started to more of a distributed governance model where the role of ITAM is now more to provide tools and templates to provide reports to provide guidance.
To collect information and really enable those business units to be effective, right? You’re not going to control what they do, but you want to provide them with the tools and the reports and the data so they can be effective in what they do. This has particularly relevant for SaaS where it’s been a huge increase in SaaS applications that business units are engaging with directly, completely bypassing IT but not only a lot of others as well.
So again, this is a mind shift for how ITAM needs to run, right? Completely changing kind of the model. And again, those ITAM programs are going to be able to make those transitions and remain effective and relevant in this new world, going to be the one that’s going to survive. Again, a whole lot of discussions about that that we won’t have time to get into now.
But very interesting area. Another one is information security. We could spend a whole lot of time on that. But see, there’s a growing realization that you can’t secure what you don’t know you have. They have what kind of different terminology that’s coming up for this, like cyber asset tax, surface management and other things.
But I guess the basics here is that you can do cybersecurity if you don’t have effective IT asset management. Even basic things like patch management response, all these require, knowing what you have and where you have it. Just the role of IT, of ITAM in reducing just the number of different versions in addition, products that are running out there already improve the security posture of any organization, let alone removing unauthorized software. Security in the supply chain, like the SolarWinds incident and so forth, is becoming more important. Software Bill of Material is a very critical item.
Right now, there’s been legislation executive order in the US, there’s a lot of work done on this at ISO and elsewhere. Is, this is a response to the Log4j and similar incidents. There’s, there are ISO standards for this. Again, this is getting a lot of attention. Get even more going forward.
We talked about identity, access management rights, all those SaaS applications that business units are subscribing to. How do you control it when a user leaves the company? That access is terminated, right? It’s a security concern as well as a cost concern, right? So this is where ITAM and security can collaborate as well.
Hardware disposition, ITS disposition, hardware theft issues. Just two, three months ago, Morgan Stanley was fined $35 million by the SEC for a server that they reached end of life. They repurposed it or they sold it. And there are hard drives there with customer data.
So those things are still happening and they’re happening to govern companies as well, otherwise So that’s going to continue to become an even more dominant disruptive technologies. I’ve touched on, on, on just two, right? Blockchain, a lot of the things that we do around it from smart contracts to how do we, how we track software, build materials, and a lot of the things in between are going to be implemented using blockchain in the years to come.
So that’s happening with a number of implications that we won’t have time to get into. We’ll just keep that on your radar as well as increased use of artificial intelligence and machine learning to do what we do. So, we talked about how assets are more ephemeral within the cloud. Really the only way to get there is smart automation that leverages artificial intelligence, machine learning.
Heard about terms like AI ops and so forth, and there’s an implication there. ITAM as well. And this is the future of IT right? Gone are the days where, you’re doing quarterly or annual processes, right? They need to be more real time and giving the amount of data and they are growing complexity of that data.
The only way to get there is really with smart automation. So we’re going to see a lot more in of that coming. Open source getting a lot of attention as well. There are different standards for that. Talking about companies that incorporate or open source in their products.
There is open chain talking about software build material. One standard is discussed. There is SPDX they’re both ISO standards now as well. Software package data exchange is particularly getting a lot of attention now with the executive order that we discussed about and so forth. And of course, they need to be in scope for software asset management.
The license itself may be free, but the maintenance software is not. Plus, you need to control the stages of the life cycle, regardless of if it’s open-source software or not. I definitely expect this will be an area where companies will spend a lot more time and money on.
Then finally operational technology.
Here we’re talking about things like IoT and things like sensors and smart equipment and cameras and refrigerators and pretty much everything is connected nowadays. Not only that, but increasingly in a growing number of organizations that are being put under the responsibilities of the CIO, where it didn’t used to be the case in the past, increasingly that is the case, talking to more and more companies.
And what that means is that CIO will need ITAM to help manage that. That there’s a number of different implications to how you implement IT time methodologies to be effective in this kind of world. Operational technology a lot of opportunities there. But again, it’s an area where I think many ITAM programs are still not looking at where they’re probably going to have to over the next few years just because of some of those shifts.
All right, so this was again, a very quick summary of some of the main trends we’re seeing that are going to be impacting ITAM over the next few years. And I think with that we can see if there are any questions.
And if you want a copy of the slides, you can just send me a quick email. Would love to connect with each and every one of you over LinkedIn or otherwise.
Let’s take a look at some of the questions. There was a question about training for FinOps and ITAM. So, this is definitely something that’s going to happen. I think the training that the FinOps Foundation is doing is going to they’re looking to incorporate FinOps and ITAM elements within that. That’s one part of the discussion.
There’s also other training option that. We’ll be looking at as Anglepoint as well to offer. So yeah, that’s definitely an area that’s we’re going to see a lot more options going forward.
Another question that I see here is about do I see a trend in ITAM reporting under the SecOps umbrella?
Yeah, it’s a very good question. I think there’s no doubt that ITAM and FinOps would need to collaborate a lot more closely and that in many cases, FinOps right now lives under Dev/SecOps. And actually just by, just because of that, I think ITAM will be working a lot more closely with Dev/SecOps.
I think historically many ITAM programs are not doing that, and that has really come to hurt ITAM particularly with the evolving needs around FinOps. There was just a vacuum that was there and FinOps filled that vacuum and this again, was a missed opportunity for ITAM to step up, but I think going forward that’s because where the technology is going where the trends are going.
For sure ITAM will need to work much more closely with FinOps and with Dev/SecOps. And again, it’s not just about financial management, it’s also about the information security aspects and know, and some of the other trends that we just discussed.
Next question. What do you think the role of SAM within FinOps, how is it going to impact the SAM operations?
Yeah, I think long term SAM and FinOps need to work very closely together. I personally think a best practices for SAM and FinOps to be part of one function. And certainly, if I was a CIO that’s the only way I would want to have it.
But there may be, historical or political or other organizational reasons why they need to be separate and that’s fine. But if they are separate, then they need to collaborate very closely on a number of different areas. So again, at the end of the day, what’s important is that the work that needs to get done will get done.
And you can do it with the two functions operating separately, if they have the right collaboration, sharing of data sharing of tools handoffs and specific collaboration on number of things that we talked about, whether it’s marketplace software or bring your own license and a number of those things that absolutely require the two functions to be working very closely together. And I think many in some organizations where they don’t have a FinOps function yet, I think it’s a huge opportunity for ITAM and SAM to, to step up and provide that solution for their organization versus continuing to leave a vacuum. As we saw, this is, most of the spend dollar-wise is going to be in that bucket.
And I think it’s just. I can’t exaggerate saying how critical it is for ITAM and SAM to step up and evolve to address that.
How could we be more prepared as ITAM to follow the trend?
Yeah, there’s probably a number of activities that need to be done. The first is just from educational perspective just staying on top of these topics. Collaborating with the different organizational functions that that touch on these areas. Getting to work a lot more closely with your cybersecurity team a lot more closely with your TBM office, if you have one. If not, if you don’t have one in your organization, the financial management office, maybe that’s an opportunity for item to take the lead in creating one working with FinOps, Dev/SecOps and so forth.
So it’s really education and really starting to work a lot more closely with those different functions to and stakeholders to. Start creating deliverables and showing the values that we can bring from an IT asset management perspective. And there, there’s a lot more detail related to each one of those trends that we can talk about specifically.
And what’s some of the things that we’re seeing some of the best practices, companies that are ahead of the curve and what are they doing that’s working well?
Happy to have those conversations offline. All right. I really wanna really thank everyone for joining our last webinar of the year.
We had hundreds of people who registered for this webinar. So really great participation. Again, anyone who wants to get the slides, please reach out to me. Happy to connect with all of you and want to wish all of you a really happy holidays. Have a great, great, peaceful time with all your family and friends, and we look forward to a really interesting 2023 ahead of us.