Dialing Up the Future of Managing Software in the Cloud

By Jeff Muscarella

Partner, IT and Telecommunications, NPI

July 19, 2016

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Artwork Courtesy of @iStock.com/sorbetto

SAP recently announced that its cloud revenues will surpass perpetual license revenues in 2017. While not every enterprise software vendor can claim the same, it’s more evidence that the cloud side of many vendors’ businesses are growing quickly. It’s only a matter of time before you’ll be managing far more cloud-based licenses than perpetual ones.

This presents a challenge for IT procurement and IT/software asset management specialists. As companies move to applications like Salesforce.com and Microsoft Office 365, there are no licenses to manage, only subscriptions. Subscriptions are based on use – duration, volume and features. For those of us with a telecom background, this looks familiar (think call duration, volume of data and calling/quality of service features).

As such, procurement and SAM specialists need to adapt to a world where they will manage use, profiles and features – and work to match them to business needs versus simply a paradigm of tracking and managing assets and maintenance costs.

One challenge here is the disparity in tools. Traditional on-premise software asset management systems typically rely on entering entitlement data from software agreements (numbers and types of licenses purchased) and input from network monitoring agents that scan machines to locate installed copies of programs. Many also combine this installation data with usage information gleaned from proprietary publisher tools (e.g., SAP’s License Administrator Workbench) to create a complete picture of what was purchased, installed and being used.

The cloud changes things quite a bit here. There are no networks, PCs or servers that the customer can monitor. Instead, companies must rely on dashboards created by software publishers like Microsoft’s new Admin Center for Office 365.

Office-Center-Preview_1

Unfortunately, while these portals provide some usage information, they are not really designed to help a company optimize their use with an eye to reducing costs. Much like your cell phone bill, the reports are canned and only offer the information the provider believes is useful or wants to provide. Take a look at the dashboard below. It’s a nice looking chart of sent, received and read messages, but you cannot drill down in ways that would be helpful in determining which features make the most sense for your corporate users.

Office-Center-Preview_2

As SAM and procurement specialists manage more cloud-based software assets, here are a few steps they can take to prepare:

  • Ask your current ITAM team and tool providers how they can support the tracking of service use for current and future plans (including, but not limited to, subscription duration, features accessed and volume of users)
  • Use this data (if available) to work with IT and the business to develop use profiles for each SaaS application
  • Work with your vendors to match your needs to standard or custom profiles, and pricing that meet your business needs
  • Develop “bridge models” to help the business and IT compare perpetual license and maintenance costs to those of SaaS solutions