The Critical Need for Publisher-Specific Expertise in Software Asset Management
Keys to a Successful SAM Tool Implementation
June 30, 2020
OnDemand Webinar: IBM’s IASP Offering- India
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Ron Brill, President & Chairman here at Anglepoint gave a webinar on “The Critical Need for Publisher-Specific Expertise in SAM”. Here are the notes we took from his presentation:
Lifetime focus.
Acquiring and maintaining publisher-specific expertise requires a true, lifetime focus on a single publisher. This means following every update coming from the publisher, attending their events, following the court cases they’re involved in, having regular dialog with people on the inside, getting relevant certifications, mastering their tools, connecting with the user community, etc.
End-to-end software lifecycle experience.
Expertise in all stages of the software license lifecycle is essential. Some of those stages are: needs analysis, contract negotiation, technology architecture, deploy and maintenance of products, tool configuration that relates to the publisher, analysis of license consumption, gathering entitlement data, analysis of entitlement position, handling audits, contract renewals, and end of life products. This full end-to-end experience is critical to truly understanding a software publisher.
Auditor experience.
Auditor experience can only be gained by hiring from the publisher’s audit team or from an audit firm. This, and only this, allows you to understand the procedures that auditors perform, data they use to determine license consumption in different situations, how they interpret licensing rules, and so on… Just having the experience of being audited is not sufficient.
Publisher experience across hundreds of organizations.
True publisher-specific expertise is gained over working with hundreds of organizations. Only then do you get the meaningful benchmarking to understand patterns and nuances to know how to best handle each situation.
Even the very brightest people, who have spent careers as in-house practitioners cannot gain full expertise because they are forever limited by the few organizational lenses that they have experience with. Over their career they will most likely only see 2 or 3 Microsoft EAs, only certify an Oracle ULA once or twice, only implement a software asset management tool once, be audited once or twice and so on.
Only when you combine these four elements do you truly know the publisher playbook – then you have acquired publisher-specific expertise.
Software licensing for any one publisher is very complex. The lists below show some of the many challenges that can come with licensing for just one software publisher. Large organizations can have hundreds of publishers in their environment.
Publisher-dependent examples:
- Complex & ambiguous use rights
- Ever-changing use rights
- M&A on publisher side
- Multiple contract types and models
- Multiple conflicting contracts
- Product changes & migrations
- License metric changes
- Audit licensing interpretations
- Audit practices
- Sales practices
Internally-dependent examples:
- Limited SAM tool capabilities
- Limited SAM tool implementation
- New technologies & platforms
- Ever-changing use cases
- Ever-changing IT environments
- Complex use cases
- M&A on customer side
- Limited entitlement records
Below, we have one specific and very common example of the need for publisher-specific expertise.
Organizations commonly believe that SAM tools are a silver bullet and having a tool makes publisher-specific expertise unnecessary. That is not the case, even though the tool vendor says that it supports publisher X - all the expertise is not programmed into the tool. Yes, SAM tools are necessary and play a key role, but they are only part of the equation. Let’s see why that is:
In many cases a tool will help you identify a deployment (this product, this version, on that server). However, the tool will not tell you how many licenses are actually being consumed by that deployment – this is true even for metrics the tool is supposed to capture (i.e. those based on processors and cores) let alone other metrics. Tools also cannot discover or analyze the use case in which the software operates in your environment and what that use case means from a product rights standpoint.
In fairness to the SAM tool vendors, it’s only possible to automate so much and in many cases use rights are vague. This puts vendors in a tricky situation – do they favor the customer or the publisher? It’s in dealing with vague use rights that software asset management brings the most value and the most cost savings to the organization. At the same time, it is in dealing with vague use rights that SAM tools fall short.
This is just one example of why software licensing can be so complex. Again, large organizations have hundreds of publishers, so the difficulties are multiplied greatly.
The software license analysis & optimization process.
What is Publisher-Specific Expertise in Software Asset Management? | 06:45 – 10:00
Lifetime focus.
Acquiring and maintaining publisher-specific expertise requires a true, lifetime focus on a single publisher. This means following every update coming from the publisher, attending their events, following the court cases they’re involved in, having regular dialog with people on the inside, getting relevant certifications, mastering their tools, connecting with the user community, etc.
End-to-end software lifecycle experience.
Expertise in all stages of the software license lifecycle is essential. Some of those stages are: needs analysis, contract negotiation, technology architecture, deploy and maintenance of products, tool configuration that relates to the publisher, analysis of license consumption, gathering entitlement data, analysis of entitlement position, handling audits, contract renewals, and end of life products. This full end-to-end experience is critical to truly understanding a software publisher.
Auditor experience.
Auditor experience can only be gained by hiring from the publisher’s audit team or from an audit firm. This, and only this, allows you to understand the procedures that auditors perform, data they use to determine license consumption in different situations, how they interpret licensing rules, and so on… Just having the experience of being audited is not sufficient.
Publisher experience across hundreds of organizations.
True publisher-specific expertise is gained over working with hundreds of organizations. Only then do you get the meaningful benchmarking to understand patterns and nuances to know how to best handle each situation.
Even the very brightest people, who have spent careers as in-house practitioners cannot gain full expertise because they are forever limited by the few organizational lenses that they have experience with. Over their career they will most likely only see 2 or 3 Microsoft EAs, only certify an Oracle ULA once or twice, only implement a software asset management tool once, be audited once or twice and so on.
Only when you combine these four elements do you truly know the publisher playbook – then you have acquired publisher-specific expertise.
Why is Publisher-Specific Expertise Critical for Software Asset Management? | 10:01 – 18:40
Software licensing for any one publisher is very complex. The lists below show some of the many challenges that can come with licensing for just one software publisher. Large organizations can have hundreds of publishers in their environment.
Publisher-dependent examples:
- Complex & ambiguous use rights
- Ever-changing use rights
- M&A on publisher side
- Multiple contract types and models
- Multiple conflicting contracts
- Product changes & migrations
- License metric changes
- Audit licensing interpretations
- Audit practices
- Sales practices
Internally-dependent examples:
- Limited SAM tool capabilities
- Limited SAM tool implementation
- New technologies & platforms
- Ever-changing use cases
- Ever-changing IT environments
- Complex use cases
- M&A on customer side
- Limited entitlement records
Below, we have one specific and very common example of the need for publisher-specific expertise.
Organizations commonly believe that SAM tools are a silver bullet and having a tool makes publisher-specific expertise unnecessary. That is not the case, even though the tool vendor says that it supports publisher X - all the expertise is not programmed into the tool. Yes, SAM tools are necessary and play a key role, but they are only part of the equation. Let’s see why that is:
In many cases a tool will help you identify a deployment (this product, this version, on that server). However, the tool will not tell you how many licenses are actually being consumed by that deployment – this is true even for metrics the tool is supposed to capture (i.e. those based on processors and cores) let alone other metrics. Tools also cannot discover or analyze the use case in which the software operates in your environment and what that use case means from a product rights standpoint.
In fairness to the SAM tool vendors, it’s only possible to automate so much and in many cases use rights are vague. This puts vendors in a tricky situation – do they favor the customer or the publisher? It’s in dealing with vague use rights that software asset management brings the most value and the most cost savings to the organization. At the same time, it is in dealing with vague use rights that SAM tools fall short.
This is just one example of why software licensing can be so complex. Again, large organizations have hundreds of publishers, so the difficulties are multiplied greatly.
The software license analysis & optimization process.
You can see in the diagram above that most companies can only get to a deployment position and purchase history summary on their own. Much work is required to get these two elements, but unfortunately, they are still too raw to be used to identify true cost savings opportunities or compliance exposures. Publisher-specific expertise is needed to convert a deployment position to a license consumption position and a purchase history summary to a license entitlement position. The two are then reconciled into an effective license position (ELP) – which is what you need to identify cost savings opportunities and compliance risk. An ELP is also critical in creating an optimization plan.
Now let’s discuss some examples of why expertise is needed for some of the more common software publishers. We will list the most common licensing challenges that typically cannot be addressed by SAM generalists and provide a case study from our clients in which publisher-specific expertise was critical.
Oracle
Licensing challenges: Legacy metrics, counting in a virtualized environment
Case Study: A large client had a ULA (unlimited license agreement) but didn’t realize that a certain Fusion Middleware product was outside of the ULA. They were running that product on VMware, which Oracle doesn’t accept as means of hard petitioning. In addition, they were running a version of VMware which allowed VMotion across vCenters. The resulting exposure was over $18 million.
We helped the client identify the problem and then worked with them to segment the environment in a manner that Oracle would accept by reducing the exposure to one cluster and preventing VMotion outside that cluster. The $18 million exposure was reduced to zero.
IBM
Licensing challenges: IBM Cloud Paks and Flexpoint bundle calculations, unlimited license agreement calculations, aggregate cap programs catalog management, sub-capacity reporting, container measurement and reporting
Case study: Windows 2008 is being removed from sub-capacity eligibility Jan 1, 2021. This will have a significant impact on many customers. We have a very large client, with thousands of impacted servers. This change alone, would result in a $19 million exposure come Jan 1. We have been working with the client for some time on a detailed transition plan that is already in motion to completely eliminate this exposure before the change takes place.
Salesforce
Licensing challenges: restrictions around API limits, custom objects, custom profiles, storage, understanding restricted use licenses, license type, feature sets
Case study: For a large client, we identified active and inactive users, feature sets used by users, etc. and helped them consolidate multiple contracts into one contract optimized to the client’s true needs. With the next renewal, the client reduced their contract from $19 million to $14 million.
SAP
Licensing challenges: indirect access, digital access, true named user optimization, assigning users to a license based on access or usage
Case study: SAP audited one of our clients and had findings of over $8 million. We challenged these findings one-by-one. For example, EHS (environment health and safety) was licensed via bundle product that SAP failed to recognize during the audit. They had also improperly counted the number of CPUs for business objects. They had also counted non-SAP POs for the POE (purchase order execution) module, among other issues. By producing the relevant contract language and checking calculations and assumptions, we were able to reduce the audit findings from over $8 million to under $100,000.
Microsoft
Licensing challenges: understanding and applying Software Assurance (SA) use rights and benefits, SQL licensing, MSDN
Case study: A client had used a trusted reseller for many years for Microsoft renewal work. The client was on a Server Cloud Enrollment agreement and the product in question was CIS (Core Infrastructure Service) suite. The reseller had effectively doubled the number of core licenses required because they counted threads instead of physical cores – most machines had hyper threading enabled. This resulted in $4 million of overspending annually – Anglepoint caught this error and helped the client correct it.
You have two options when it comes to acquiring publisher-specific expertise: either you get the expertise in-house or you use a SAM service provider. It is extremely rare to see an organization that acquires and maintains this expertise in-house, here’s why: Finding.
It is difficult to find good publisher-specific experts. There are not many around.
Hiring.
Because there are few qualified publisher-specific experts, demand far exceeds supply. This means that these experts can command high salaries. A salary survey done by The ITAM Review* found that from 2017-2019, global average salaries in SAM increased by 15% - for true licensing experts, the increase was even higher.
Motivating.
Keeping these experts motivated is challenging. The workloads come and go, meaning that often the experts may have to do work that they consider beneath them.
Staying current.
When the expert is only exposed to a single end-user environment, it is very hard for them to stay sharp - no matter how many trainings or industry events they attend.
Retaining.
True licensing experts are hard to retain, often if they stay it’s because they want to branch out and move away from specializing in just one publisher.
Efficiency.
In-house experts lack the support staff needed to work efficiently. They also lack the extensive analytics automation that a good software asset management service provider has, which does much of the heavy lifting.
Workload spread.
Workloads can fluctuate quite a bit – this is another reason why most organizations that engage publisher-specific expertise prefer not to have it done by internal staff.
After outlining these challenges, it should come as no surprise that maintaining publisher-specific expertise in-house is not cost effective. The only practically achievable way to acquire publisher-specific expertise is by engaging a competent software asset management service provider. A competent SAM service provider is one that puts publisher-specific expertise front and center, that emphasizes the hiring of experts with specific audit background and other qualifications.
Some SAM service providers structure their teams based on client assignments rather than publisher expertise, meaning that the same person doing your IBM ELP could be doing your Oracle ELP tomorrow. This results in a watered-down licensing knowledge and should not be considered publisher-specific expertise. Here’s a great analogy: a good family doctor, who is a full M.D. in their own right would never attempt to perform surgery by themselves but would always refer to a specialist. SAM is no different.
Whether you are engaging a SAM service provider in a SAM Managed Service or Ad Hoc, there are certain events in which you will want to leverage publisher specific expertise.
Contract negotiation.
Publisher-specific expertise should always be engaged well before any contract negotiation. This is to ensure that you know what you need and what you don’t need and can negotiate from a position of knowledge versus being at the mercy of the software salesperson.
Reporting to a publisher.
This one if very important! Any time you provide any reporting to a publisher (emphasis on ANY) you should engage publisher expertise. You can and will regret any data you send to a software publisher not thoroughly and carefully vetted by a licensing expert.
Audit.
Auditors make mistakes, plenty of them. Audit firms outsource most of their back-office analysis work offshore and they’re ultimately measured on recoveries. The last rule (reporting to a publisher) applies here, but multiply by a factor of 100.
M&A.
A merger or acquisition could have lasting implications on SAM for years to come. It’s not just about quantity of licenses, there is much more involved.
Significant changes.
Any changes in the IT environment or the use cases for the software should involve publisher-specific expertise. A few examples are moving to the cloud, digital transformation initiatives, business changes, etc. These may contain significant licensing implications that you need to stay ahead of.
Periodic health checks.
It is important to ensure that you complete periodic ELPs to make sure that you identify and take advantage of cost savings opportunities as well as risk mitigation of compliance exposures as they come up. The frequency of these checks will depend on many factors, a few being: the publisher, how much software you use, annual spend, and audit risk.
* https://www.itassetmanagement.net/2019/06/07/2019-itam-salary-and-skills-survey-the-results/
Licensing Challenges & Case Studies | 18:41 – 24:35
Now let’s discuss some examples of why expertise is needed for some of the more common software publishers. We will list the most common licensing challenges that typically cannot be addressed by SAM generalists and provide a case study from our clients in which publisher-specific expertise was critical.
Oracle
Licensing challenges: Legacy metrics, counting in a virtualized environment
Case Study: A large client had a ULA (unlimited license agreement) but didn’t realize that a certain Fusion Middleware product was outside of the ULA. They were running that product on VMware, which Oracle doesn’t accept as means of hard petitioning. In addition, they were running a version of VMware which allowed VMotion across vCenters. The resulting exposure was over $18 million.
We helped the client identify the problem and then worked with them to segment the environment in a manner that Oracle would accept by reducing the exposure to one cluster and preventing VMotion outside that cluster. The $18 million exposure was reduced to zero.
IBM
Licensing challenges: IBM Cloud Paks and Flexpoint bundle calculations, unlimited license agreement calculations, aggregate cap programs catalog management, sub-capacity reporting, container measurement and reporting
Case study: Windows 2008 is being removed from sub-capacity eligibility Jan 1, 2021. This will have a significant impact on many customers. We have a very large client, with thousands of impacted servers. This change alone, would result in a $19 million exposure come Jan 1. We have been working with the client for some time on a detailed transition plan that is already in motion to completely eliminate this exposure before the change takes place.
Salesforce
Licensing challenges: restrictions around API limits, custom objects, custom profiles, storage, understanding restricted use licenses, license type, feature sets
Case study: For a large client, we identified active and inactive users, feature sets used by users, etc. and helped them consolidate multiple contracts into one contract optimized to the client’s true needs. With the next renewal, the client reduced their contract from $19 million to $14 million.
SAP
Licensing challenges: indirect access, digital access, true named user optimization, assigning users to a license based on access or usage
Case study: SAP audited one of our clients and had findings of over $8 million. We challenged these findings one-by-one. For example, EHS (environment health and safety) was licensed via bundle product that SAP failed to recognize during the audit. They had also improperly counted the number of CPUs for business objects. They had also counted non-SAP POs for the POE (purchase order execution) module, among other issues. By producing the relevant contract language and checking calculations and assumptions, we were able to reduce the audit findings from over $8 million to under $100,000.
Microsoft
Licensing challenges: understanding and applying Software Assurance (SA) use rights and benefits, SQL licensing, MSDN
Case study: A client had used a trusted reseller for many years for Microsoft renewal work. The client was on a Server Cloud Enrollment agreement and the product in question was CIS (Core Infrastructure Service) suite. The reseller had effectively doubled the number of core licenses required because they counted threads instead of physical cores – most machines had hyper threading enabled. This resulted in $4 million of overspending annually – Anglepoint caught this error and helped the client correct it.
How is Publisher-Specific Expertise Acquired? | 24:36 – 32:32
You have two options when it comes to acquiring publisher-specific expertise: either you get the expertise in-house or you use a SAM service provider. It is extremely rare to see an organization that acquires and maintains this expertise in-house, here’s why: Finding.
It is difficult to find good publisher-specific experts. There are not many around.
Hiring.
Because there are few qualified publisher-specific experts, demand far exceeds supply. This means that these experts can command high salaries. A salary survey done by The ITAM Review* found that from 2017-2019, global average salaries in SAM increased by 15% - for true licensing experts, the increase was even higher.
Motivating.
Keeping these experts motivated is challenging. The workloads come and go, meaning that often the experts may have to do work that they consider beneath them.
Staying current.
When the expert is only exposed to a single end-user environment, it is very hard for them to stay sharp - no matter how many trainings or industry events they attend.
Retaining.
True licensing experts are hard to retain, often if they stay it’s because they want to branch out and move away from specializing in just one publisher.
Efficiency.
In-house experts lack the support staff needed to work efficiently. They also lack the extensive analytics automation that a good software asset management service provider has, which does much of the heavy lifting.
Workload spread.
Workloads can fluctuate quite a bit – this is another reason why most organizations that engage publisher-specific expertise prefer not to have it done by internal staff.
After outlining these challenges, it should come as no surprise that maintaining publisher-specific expertise in-house is not cost effective. The only practically achievable way to acquire publisher-specific expertise is by engaging a competent software asset management service provider. A competent SAM service provider is one that puts publisher-specific expertise front and center, that emphasizes the hiring of experts with specific audit background and other qualifications.
Some SAM service providers structure their teams based on client assignments rather than publisher expertise, meaning that the same person doing your IBM ELP could be doing your Oracle ELP tomorrow. This results in a watered-down licensing knowledge and should not be considered publisher-specific expertise. Here’s a great analogy: a good family doctor, who is a full M.D. in their own right would never attempt to perform surgery by themselves but would always refer to a specialist. SAM is no different.
When to Use Publisher-Specific Expertise? | 32:33 – 35:39
Whether you are engaging a SAM service provider in a SAM Managed Service or Ad Hoc, there are certain events in which you will want to leverage publisher specific expertise.
Contract negotiation.
Publisher-specific expertise should always be engaged well before any contract negotiation. This is to ensure that you know what you need and what you don’t need and can negotiate from a position of knowledge versus being at the mercy of the software salesperson.
Reporting to a publisher.
This one if very important! Any time you provide any reporting to a publisher (emphasis on ANY) you should engage publisher expertise. You can and will regret any data you send to a software publisher not thoroughly and carefully vetted by a licensing expert.
Audit.
Auditors make mistakes, plenty of them. Audit firms outsource most of their back-office analysis work offshore and they’re ultimately measured on recoveries. The last rule (reporting to a publisher) applies here, but multiply by a factor of 100.
M&A.
A merger or acquisition could have lasting implications on SAM for years to come. It’s not just about quantity of licenses, there is much more involved.
Significant changes.
Any changes in the IT environment or the use cases for the software should involve publisher-specific expertise. A few examples are moving to the cloud, digital transformation initiatives, business changes, etc. These may contain significant licensing implications that you need to stay ahead of.
Periodic health checks.
It is important to ensure that you complete periodic ELPs to make sure that you identify and take advantage of cost savings opportunities as well as risk mitigation of compliance exposures as they come up. The frequency of these checks will depend on many factors, a few being: the publisher, how much software you use, annual spend, and audit risk.
Q&A | 35:40 – 45:33
* https://www.itassetmanagement.net/2019/06/07/2019-itam-salary-and-skills-survey-the-results/
