What is Software Asset Management?

What is Software Asset Management?

Software Asset Management (SAM) has evolved far beyond its traditional roots in license compliance and procurement oversight. In our complex digital environments, modern SAM is a strategic discipline central to governance, risk management, and digital transformation. It supports organisations in optimising the use of software resources across increasingly diverse platforms—on-premises, in the cloud, and across hybrid infrastructures.

Defining Modern SAM

At its core, SAM is the process of managing and optimising the purchase, deployment, maintenance, utilisation, and disposal of software applications. Modern SAM builds on this foundation with a broader focus on business value, risk, sustainability, and agility. It aims not only to reduce costs and ensure compliance but also to align software usage with business goals, improve security posture, and support cloud migration strategies.

SAM is a subset of the broader practice of IT Asset Management (ITAM), which is governed by the international standard ISO/IEC 19770. This management standard provides a framework for the effective management of IT assets. ISO/IEC 19770-1, in particular, outlines the general requirements for an ITAM management system. The other parts of the standard (such as 19770-2 and 19770-3) deal with software tagging and entitlement schemas. These standards help ensure consistency and transparency in SAM practices and are increasingly being adopted by enterprises seeking to formalise asset governance.

The Impact of SaaS and Cloud on SAM

One of the biggest drivers of SAM transformation has been the shift to cloud computing and Software as a Service (SaaS). Unlike traditional on-premises licenses, cloud-based applications often follow subscription or consumption-based models, with usage metrics that change dynamically. This makes traditional, static methods of software tracking insufficient.

SaaS platforms like Microsoft 365, Salesforce, and Adobe Creative Cloud introduce new challenges around user access, subscription tiers, and shadow IT—where departments or users adopt cloud tools outside of centralised IT oversight. Effective SAM now includes monitoring SaaS utilisation, right-sizing subscriptions, managing renewals, and enforcing governance policies to prevent cost overruns and data security risks.

Hybrid cloud environments, where organisations operate a mix of public cloud, private cloud, and on-premise infrastructure, add further complexity. SAM must account for virtual machines, containerised applications, auto-scaling environments, and bring-your-own-license (BYOL) models. Tools that integrate with cloud platforms (such as AWS, Azure, and Google Cloud) are essential for maintaining visibility and control in these fluid environments.

Beyond Compliance: A Strategic Role

Historically, SAM was viewed largely as a reactive function—used to avoid audit penalties or track license entitlements. Today, its role is far more proactive and strategic.

Effective SAM contributes to:

• Cost optimisation by identifying unused or underutilised software and renegotiating contracts.
• Risk reduction through better license management, ensuring regulatory compliance, and minimising audit exposure.
• Sustainability by aligning with green IT strategies, reducing digital waste, and extending the lifecycle of IT assets.
• Security by identifying unauthorised or unsupported software that may present vulnerabilities.
• Business agility by providing data insights that support decision-making in software procurement and deployment.

Conclusion

Modern Software Asset Management is no longer just about keeping track of licenses. It’s about managing complexity, ensuring accountability, and creating value from software investments. Grounded in international standards like ISO/IEC 19770 and responsive to trends like SaaS adoption and hybrid cloud architectures, SAM has become a critical function for any organisation seeking to manage its digital estate responsibly and efficiently.