Driving Down SoftwareCosts with SoftwareAsset OptimizationContents PrefaceExtending Audit’s HorizonsSoftware Asset Optimization DefinedHigh Level Business DriversOptimization’s Potential BenefitsThree Phase Optimization ProcessFast Track to Optimization Benefits

PrefaceFor many organizations, efforts to improve softwaremanagement start with an audit which is driven by aconcern to ensure license compliance and safetyfrom prosecution.However, this is a largely negative reason forinvesting time and money into an audit.In contrast, a balanced program of pro-activesoftware asset management procedures canprovide most organizations with financialsavings and improved user productivity.A compliance audit is essentially a closed exerciseof counting installations and comparing the totalwith the licenses owned, whereas apro-active management approach deals withquestions such as: How many copies do we actually need of eachapplication? Is our installed software being used effectively? Do we have spare licenses that we couldre-deploy? Which applications have been over-licensed andoffer scope for savings on annual maintenancerenewals?With this emphasis driving your organization’sactivities on software asset management, theobjective of license compliance will be supported asan important – but essentially spin-off – benefit.2

Extending Audit’s HorizonsWhen your organization is proposing to conduct asoftware audit for compliance, you have anopportunity to consider a much wider and longerlasting set of objectives and benefits.Organizations using software should: Understand what software the enterprise needs, byevolving Application Policies (see below) to definewho should have what; Monitor software usage to locate unused copiesthat can be redeployed, and to target training; Maintain an accurate inventory of installedapplications to ensure legality and that software isup to date. Maintain a centralized register of license purchasesand maintenance to ensure license compliance.All these management activities service an objectivethat Vector identify as software asset optimization.Software Asset OptimizationDefinedVector highlights four key factors in the ownership,management and exploitation of application softwareassets: Requirements – defining and quantifying theorganization’s true requirements for an application.Organizations will purchase MS Office Professional for the entire network simply becausethey have no tools to quantify how many users onlyrequire Office Standard. License ownership. If an organization has haddecentralized software purchasing, then locatingand documenting actual licenses can be the mostchallenging aspect of taking full control of softwareassets. Inventory – how many copies are actuallyinstalled. This is critical – top quality inventory is acornerstone of software asset optimization. Usage – how many of the deployed copies areactually used. A PC sitting unused on a desk ishighly visible. A copy of an application sittingunused on a hard disk is invisible and unnoticed.Vector regards an organization as having fullyoptimized its software assets when all fourfactors are in sync.Application PoliciesPart of our philosophy is that all applicationsoftware requirements should be defined andquantified using a standard method. Vectorrecommends that the need for each applicationis defined in an ‘Application Policy’, which stateswhich PCs need the application. A policy wouldrefer to groups of PCs defined in anorganization’s Active Directory or in its chosen ITAsset Management tools – or both, if the two areintegrated as they should be. Within a policy, anapplication could be defined as ‘mandatory’ forsome groups of PCs, ‘optional’ for some othergroups, and prohibited from others.3

Optimization: the High LevelBusiness DriversOnce data has been collected and analyzed,optimization decisions can be made and prioritized inaccordance with the organization’s objectives. Thekey business drivers to consider are:ComplianceIt is not uncommon for an organization to revert to itsinitial objective of ensuring compliance, but with theusage information indicating where unused copiesare installed, there is now the opportunity to reducethe cost of compliance by ensuring maximum use ofthe copies already owned. i.e., where an applicationis under-licensed compared to the deployment, thefirst focus should be to ensure that the deployedcopies are being used, before any additional copiesare bought.Reduction of ongoing costs of ownershipEach PC can carry a significant cost in the annualmaintenance of the applications. When theapplication copy is not being used, or an alternativeprovision can be made for occasional use, then thecopy should be de-installed, and its maintenancecancelled unless the copy is needed elsewhere.Either way, the objective is to not pay formaintenance on unused software.Maximum return on the investment of applicationownershipA first priority under this heading would normally bethe redeployment of unused copies of applications,but it may also be appropriate to assess whetherusage would increase if user training were increased.Going down this path requires an organization tounderstand that application software can and shouldbe a source of user productivity, and not just a pureoverhead.It may also be appropriate to purchase additionalapplication copies to match requirements, toincrease organization productivity withoutcompromising compliance.4

The Opportunities of OptimizationWhenever any two of the four factors are out of sync,there is opportunity for improved optimization. Anorganization can decide which areas of improvementto pursue, based on top-down managementprinciples, or may decide to wait until comprehensiveinformation has been collected on all four factorsbefore setting priorities.Factors out of sync.Opportunity for improved optimizationLicenses installationsNon-compliant situation.Licenses InstallationsSpare licenses can be redeployed or cancelled.Installations Copies neededInstallations are not as planned and desktop usersmay not be adequately provided for.Installations Copies neededInstallations are not as planned.Licenses Copies neededImprove the coordination between the requirementplanning and purchasing functions.Installations Copies usedWasted installations that could be redeployed ortraining may be required to increase use.The Optimization ProcessThe process of applying the four functions to the goalof Software Asset Optimization has three mainclasses of nstalledCopiesUsedPCs?CopiesUsedPCs2. Analyse Optimization actions – redeploying applications,consolidating maintenance purchases, etcPCs3. Optimise5LicencesOwned1. Discover Set-up and discovery Analysis of discrepancies and identification ofpriorities for actionCopiesRequiredCopiesUsed

Optimization Activities andPrioritiesThis matrix summarizes the full set of potentialactivities in the three stage optimization process.Each organization will decide where it wishes todeploy its resources first, depending on its goals.IT asset management tools will be needed to fullyexploit the potential of optimization, includingsoftware inventory and software usagemeasurement. Tools are readily available, includingon a temporary basis for an investigative survey.6Optimization FactorSet up and DiscoveryVariance AnalysisOptimization ActionCopiesInstalled(Inventory)Resolve anyapplications notrecognized by theinventory/discovery tool.Regular review ofcorrelation of inventorywith licenses owned.Removal andredeployment ofapplications efine applicationpolicies in consultationwith IT and userdepartments.Regular review ofcorrelation of inventoryand usage withapplication policies.Regular review andupdate of applicationpolicies to definedesktop IT needs.Copies Used(SoftwareMetering)Low initial setup task,Low ongoingmaintenance.Regular review toidentify unused copiesof software.Regular review toidentify wastedinstallations that can beredeployed or wheretraining is required toenable use.LicencesOwned (LicenseRecording)High initial data inputSteady ongoingupdate.Regular review ofcorrelation of inventorywith licenses owned.Ensure licenses arecorrectly recorded.

Software Asset Optimization:Fast Track to BenefitsFor today’s slim-line IT management teams, it isworth summarizing the fastest routes to benefits fromexpanding the original concept of a software audit toembrace other factors of software asset optimization.Step 1: Basic InventoryExecuting a full hardware and software inventorycollection delivers immediate benefits, such as: Knowledge of the true population of PCs andsoftware. The basis of information for planning softwaredeployments and system upgrades. Access to rich and accurate data for support andhelpdesk staff.Step 2: Software License TotalsWithout needing to go into detailed data entry ofindividual historic license purchases, the figure oftotal licenses owned can be used. Comparison withinventory immediately delivers summary complianceinformation – a very important short term objectivefor many organizations.Step 3: Understand RequirementsBegin re-assessing license requirements by definingapplication policies. Choose the applications whereyou suspect there has been over-purchase in thepast, simply though a lack of clarity of truerequirements. This should reveal: Inappropriate installations, representingopportunities for removal and/or redeployment ofsoftware. Missing installations, potentially representingreduced user productivity.In addition, you could choose to lay down a firmerfoundation for all subsequent software purchases byensuring they are based on a definition ofrequirements embedded in an application policy.Step 4: Reveal the usage informationOften the last piece of information to be collected,this provides the ‘sanity check’ on yourorganization’s purchase and deployment ofapplication software. With costs under constantscrutiny, it is hard to claim to be in control of cost ofPC ownership without documentation verifying thatapplication copies are used.For a freeware utility it may not be economicallyjustifiable to be concerned, but for applicationscosting hundreds of dollars deployed on hundreds orthousands of PCs, the figures cannot be ignored.About the AuthorColin Bartram is VP Technology with VectorNetworks Technology Group. He has beeninvolved in the evolution of IT asset managementsince its inception in the 1980s, holding positionsprimarily in marketing and product management.Colin is based in the UK and can be reached [email protected] Information onVector Networks’ IT service and assetmanagement solutions can be found atwww.vector-networks.com7

expanding the original concept of a software audit to embrace other factors of software asset optimization. Step 1: Basic Inventory Executing a full hardware and software inventory collection delivers immediate benefits, such as: Knowledge of the true population of PCs and software. The basis of information for planning software