ARTICLE: Profit Motives in Software Asset Management

ARTICLE: Profit Motives in Software Asset Management

Business partners within the software licensing and software asset management market make their profits in different ways. An organisation engaging with a partner needs to be mindful of this before making a purchasing decision.

The Software Licensing Reseller

Licensing resellers typically make a modest profit on the software licenses sold and a better profit on the rebate they might receive from the software vendor. Rebates tend to drive behaviour in resellers, in that they are only awarded if the reseller jumps through certain hoops and meets certain criteria. Resellers are not typically motivated to reduce your software spend unless under competitive pressure. Price reductions will probably be based on cutting into margins rather than more creative or efficiency use of existing licenses.

Licensing resellers are not wholly independent but once you have committed to them they can often help you make informed decisions on technology choices i.e. We don’t care what you buy as long as you buy it from us, and can provide licensing expertise on the myriad of licensing and agreement options.

Independent SAM Reseller

These VAR’s usually do not sell licensing but are driven by the profit in SAM services, software asset management tool sets and the services used to implement them. The profit made on a tool implementation is rarely associated with the success of that implementation or any efficiencies gains that might have been made. In my experience, Independent SAM Resellers tend to have allegiance with a small selection of tools that they prefer to use, and will lead you to use those tools over other toolsets.

I would be wary of any reseller that claims to have expertise on all tools on the market and will help you make the best choice, this might mean they lack the expertise or confidence to actually implement the technology and are just trying to win your business at any cost.

A reseller with a long term business relationship with a tool vendor will benefit from hands-on experience, tips and tricks of using the software on a day to day basis and inroads into the vendor’s support infrastructure. All very useful when it comes to implementation. The reseller will also be rewarded with some form of accreditation in recognition of their expertise.

Independent SAM Consultant

Independent SAM consultants typically do not sell either software licensing or software asset management tools but are motivated by the sale of services. Again, the level of profit made is not usually aligned to the success of the services implemented.

Negotiator

An organisation or individual who has the primary goal of negotiating a better deal on your large software agreements. A software licensing negotiator makes his money from a fixed price project engagement, a slice of the savings made or a combination of both.

A Suggested New Hybrid

• Sells software licensing (or drives the behaviour of the reseller that does) and is sufficiently motivated maintain your compliance position whilst driving efficiency gains.
• Is rewarded with profit upon reducing software spend, removing waste and freeing up resources
• Shares penalties in some way if found to be non-compliant
• Sells and implements an audit tool and is rewarded based on successful implementation delivering agreed business metrics
• Sells SAM Services and is rewarded based on successfully implemented policies, procedures and business benefits.

Is this the model for a truly independent and impartial SAM Partner? Is it a realistic business model or utopian ideal? Please add your comments below or contact us