What is Software Asset Management | SAM Guide for 2021: A Primer to Wrangle Your Assets

SaaS Buying

Written by

Ariel Diaz

Published on

November 17, 2021

October 26, 2022

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Does your business use many software solutions with complicated licensing metrics or virtualization? Are you struggling to keep track of app usage, license compliance, and cost efficiency?

If your answer is “Yes,” you need the help of a software asset management (SAM) system to make sure that:

  • You’re not overspending on the software you’re not using
  • You’re compliant with all the software licenses that you purchased
  • You prepare with minimum cost and effort for software audits
  • You’re using all your software assets at optimal levels

Want to adopt SAM in your organization but not sure where to start?

In this article, you’ll learn everything you need to know about software asset management, including:

  • What is software asset management?
  • Why is software asset management important?
  • How to choose the right SAM solution.

Let’s get started!

What is software asset management?

Software asset management includes all processes and IT infrastructure you need to manage, control, and protect the software assets of your company throughout their life cycles.

SAM is a subset of IT asset management (ITAM), IT service management (ITSM), and hardware asset management (HAM). Solutions like ITAM aims to maximize cost savings and minimize audit risks while improving software and hardware assets management. They give you a holistic view of your IT operations footprint across on-premises data centers and the cloud.

In contrast, SAM focuses explicitly on the software part of it.

All businesses nowadays have made software an essential part of their daily operations. On average, an enterprise company uses about 288 apps that help employees carry out different processes.

However, over some time, these isolated software solutions become more complex and dependent on each other, and tracking them becomes clumsy and inefficient. Apart from that, you also have to track any updates, license changes, expiration, and software compliance.

Related: 5 best practices for software license management

To do this efficiently, you need more than a workflow. You need management software that helps you understand software costs, liabilities, and potential risks. With this type of system, you can manage all of your software from one place and maximize the value you’re getting.

SAM can help you in 3 main areas:

1. Software licenses

Licenses are some of the most essential software assets. License entitlements have information about the terms and conditions, installed software, and proper software product usage.

You, as an end-user, have to make sure that the company is compliant with the license agreement and you’re not violating any of the terms.

Software providers are very strict about compliance and don’t want you to use more software than the license permits. Thus license management is one of the main goals of SAM.

2. Usage audits

Software vendors perform software license audits to check if you’re compliant with the license. Being non-compliant can be costly—we’re talking six- or seven-figure fines for big enterprises. At the same time, this can also lead to many legal issues.

Besides that, if done without the support of a software asset management system, an audit is much more costly. It can also take more time and interrupt the normal flow of your everyday business operations.

3. Spend optimization

Many businesses that don’t have a proper SAM in place end up overspending on the software they’re not using.

They end up paying for licenses they don’t use and maintenance they don’t need. This practice can be just as costly as being non-compliant, maybe even more!

When you’re non-compliant, you face a steep one-time cost, but when you overspend, you end up paying recurring fees for something you don’t use.

The worst part is that businesses without a software asset management system are unaware of unnecessary costs, so fees can build up. As a result, the problem can drag for months or even years on end.


Why is software asset management important?

Did you know that software-as-a-service (SaaS) waste is nearly doubling every year?

SaaS waste includes all the software licenses that your company gets charged for but doesn’t use. That also includes duplicate or orphaned app accounts that are paid for but not used. That’s very common for rapidly growing companies, adding many SaaS apps without a strategy behind such decisions.

On average, this can result in $135,000 wasted per company!

Want to avoid all those unnecessary expenses?

You can use a software asset management system to manage the software tools you use.

Some other benefits of using a SAM program are:

1. Effective tracking of software assets

Since software assets are intangible, they’re not as easy to track as hardware components. With software, it’s harder to detect when you’re non-compliant and track the overall usage and cost trends.

And since US companies waste an average of $259 per desktop for rarely used or unused software, this can be very costly.

You can use a SAM solution to manage your SaaS tools and minimize your software spending. In fact, according to Gartner, “Without Software Asset Management (SAM) discipline…and transparency of usage, steps to manage out costs will be challenged to execute upon.”

2. Asset lifecycle management

Using SAM, you get a good understanding of which lifecycle stage any given software is on.

The stages are:

  1. Plan: That’s when you make strategic plans and decisions on what software your company needs and which exact software solution fits your company’s needs the best.
  2. Acquire: That’s the procurement stage, in which you buy the license for the software.
  3. Commission: At this stage, you introduce the new software (software deployment) into your business processes and give users access to it.
  4. Maintain: Here, you keep the software updated and work with the software support team if you have any issues. This way, you maximize the value of the software solution.
  5. Retire: At some point, you might want to switch to a different software solution if the current one is not useful or your company has different needs.

With a SAM system in place, you can quickly identify each stage, make better software choices, and understand when a software solution doesn’t work for your company anymore.

3. Increased accountability

With a software asset management system, you can ensure your compliance practices when it comes time for audits.

This way, you’re more accountable in front of the software vendors. Plus, you’ll have an official record of tracking your compliance.

4. Automated asset discovery and inventory tracking

Software asset management systems can automatically detect any new software and user accounts added to the company’s network. The SAM will then automatically add them to the system.

This way, you can prevent any double accounts, detect inactive accounts or unused software.

Want to read about more benefits of SAM? Check out these 10 essential SAM benefits!

How to choose the right SAM tool

There are many SAM solutions and service providers out there—most of which are cloud services. Which tool is right for you? Which provider is better for your digital transformation?

Are there any factors you should take into consideration before picking a SAM tool?

In this section, we’ll answer all your questions so you can make an informed decision and choose the best software asset management for your company.

When you’re choosing a SAM tool, you should consider:

1. The size of your company

Before going for a SAM tool, think about the size of your company.

Suppose you’re a small company and use only a few software solutions. In that case, you’re probably not in danger of non-compliance and can easily manage your software usage.

However, a SAM tool can save you lots of money and time if you’re a mid-size company or an enterprise with many apps and software licenses. Plus, it will help you manage your software usage much more effectively.

2. The complexity of your infrastructure

A software asset management tool is beneficial if:

  • Your company went through a merger or acquisition.
  • Your company has multiple locations and is present on an international scale.
  • You outsourced part of your operations.

These factors make the tracking of your software more complex and complicated. But a SAM tool can make a big difference.

3. What will the SAM tool’s main functionality be?

SAM tools might concentrate on one of two things: inventory or license management.

Inventory tracking helps track down old accounts that are not used but still incurring a cost.

License management, on the other hand, is essential for staying compliant and meeting all license requirements.

Or, you can get a tool that has multifunctional SAM processes and combines both features.

Look for licensing models that fit your business’s needs.

4. Integrating the SAM tool into the company’s system

Before you pick a SAM tool, consider your already existing systems like HR, IT asset inventory, and procurement, among others.

Ask the SAM tool vendors if they can incorporate their tool with yours. Also, ask for the different features offered to understand better how the tool will fit in and operate within your organization.

Want to learn more? Read our expert’s guide full of tips on how to pick the right SAM tool!

Vendr + SaaS management: The all-in-one SAM tool

Vendr's SaaS management tool that will help you: save money, manage all software vendors, simplify operations, and improve the security of your software system.

With SaaS management, you get a top-down, real-time view of all the tools you use across your organization and the tools needed to monitor and optimize their usage.

Some of the main features you’ll get access to include:

  • Automated discovery and inventory tracking: SaaS management automatically uncovers and tracks all the tools you use at your organization. You can see what apps you’re using and how much time your team spends on each through a single dashboard.
  • Usage and spend tracking: You can easily discover inactive accounts, apps with the same functionality, and excessive licenses.
  • License management: Streamline software license renewals, extensions, or cancellations in one place.
  • Security and compliance: Automatically create a record of your SaaS applications and be prepared for your next audit with minimum effort and no time wasted.

Key takeaways about software asset management

To save lots of time, money, and headaches, you can use SAM tools to manage and track your company’s software usage.

To recap, here’s a couple of things you can use a SAM for:

  • Track software usage effectively.
  • Manage asset lifecycle.
  • Increase accountability and ensure compliance.
  • Automate asset discovery and inventory tracking.

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