With Microsoft Enterprise agreements easily costing hundreds of thousands or millions of dollars / pounds / euros, it continues to sadden me that organizations will sign up without having any significant level of information regarding the Microsoft products that they have installed and actually use. When a 90 day Microsoft product usage survey to establish that information in good detail would cost less than 5% of the cost of the enterprise agreement, where is the excuse or rationale for not bothering?

Software Asset Management: who carries the responsibility?

It is often unclear where the responsibilities for Software Asset Management lie in an organization. Many organizations have still not appointed anyone outside Purchasing to coordinate and optimize license purchasing, and as far as IT is concerned, their responsibility starts and ends with deploying and supporting whatever software they have been told is required.

A reseller will not normally be motivated to minimize their revenue from the annual Entperprise renewal deal with a customer, and will target the executives most likely to drive a decision that maximizes their revenues. With no structured program of Software Asset Management (even better - Software Asset Optimization) in place, who holds the decision as to whether to accept an Enterprise Agreement proposal, or put the effort into determining the true level of requirement and usage and then negotiate from a position of knowledge and evidence? More than likely, the decision will be taken by a financial executive rather than someone with responsibility for IT resources.

The irony may be that the IT team already asked for funds to allocate to the task of finding out just what the extent is of usage of Microsoft products, and had that request refused, only to see the financial executive then agree to a deal with the Microsoft reseller that vastly exceeds what IT suspects would have been the cost for a deal supported by usage information.

Software Asset Management: the true cost of over-licensing

At the end of the day it is the shareholders - or taxpayer - that suffers. For a commercial organization making widgets and operating in a competitive market with a 5% final margin on product sales, every $100k wasted on an uninformed and excessive Enterprise Agreement deal will need an additional $2million in widget sales to create the marginal income to compensate. It’s surprising how often this aspect is overlooked too - you don’t make up for wasted expenditure with a 1:1 increase in sales.

About the Author

Colin Bartram's background in IT Asset and Service Management runs uninterrupted from the 1980s, and includes specifying, writing, selling and supporting software solutions. Today he contributes to product strategy and marketing for the Vector Networks group of companies. His spare time is focussed on his horse and the related demands of maintaining 5 acres of ancient pasture in Derbyshire in the UK.