Software Asset Management Will Support Cybersecurity Efforts
According to a recent IDC report, the more unlicensed software running on an organization’s network, the greater the malware risk. This is because hackers often can gain entry through malicious code they embed in software, like a Trojan horse, that employees intentionally or inadvertently download. That’s why it’s so important for organizations to have software policies and tools in place, such as an enterprise app store, to help reduce the likelihood of unlicensed and unauthorized software from being brought into the environment.
Effective Software Vulnerability Management is reliant upon an organization’s ability to first discover and then inventory all of its software and hardware assets and correlate software installations with known vulnerabilities. This enables organizations to then remediate any security risks found in the enterprise.
See this new video with Steve Schmidt: Software Vulnerability Management and the strategic fit with Flexera Software Solutions
Software and hardware asset management capabilities can be well managed by IT Operations teams through implementation of Software Asset Management and License Optimization automation. Over the next 12-24 months, more security teams will discover that the software and hardware inventory data they desperately need is already being managed by their Software Asset Management teams – and the two will increasingly work together – adding more value to the organization by reducing both security and license compliance risk.
Software Vendors Will Continue to Audit Customers’ Software Use and Exact “True up” Fees (And the Largest Organizations Will Be Hit the Hardest)
Software vendors will continue their aggressive practices of auditing their customers for software license compliance. A recent Flexera Software report indicated that 63% of respondents report having been audited in the last 18-24 months with large companies being targeted the most. 56% of organizations reported that audit fees within the last year were $100,000 or more and 21% of organizations said they were charged $1 million or more in audit true-up costs. Flexera Software predicts that software vendors will continue to aggressively audit their customer bases – especially their largest customers – to uncover non-compliant use for which they can seek compensation.
The Adoption of Software License Optimization Automation to Combat Software License Audit Risk and Software Over Spend will Accelerate
Given the growing complexity of managing software licenses, automated commercial solutions such as Software License Optimization tools have emerged to ensure continual compliance and license optimization. However, a recent Flexera Software report indicated that only 36% of organizations are using commercial software to manage their software assets. Given significant audit risk and financial exposure faced by organizations, Flexera Software predicts a sizeable increase in the percentage of organizations that will implement Software License Optimization best practices processes and tools to solve this problem. This is in line with Gartner’s report: IT Market Clock for ITSM 2.0 which said that Software License Optimization and Entitlement tool recommendations should be acted on within the next 12 months—the highest level of urgency. (See this blog by John Lipsey).
Organizations’ Move to Subscription Software Will Continue to Accelerate
Companies continually look for ways to enhance business value and find ways to have higher return on investment (ROI) for strategic assets such as enterprise software. One method of improving the value of enterprise software relative to cost lies in the licensing model. Traditionally, the perpetual licensing model has been the standard mode of purchasing business software. In a perpetual license, the entire cost of the software is borne up-front (except for ongoing maintenance fees). The organization purchases the right to use that software in perpetuity – regardless of whether, in actuality, the application delivers the desired result or value. Perpetual licensed software requires higher up-front costs and is generally accounted for as a capital expense (capex). Other licensing models can require lower up-front investments. Subscription models (whether for on-premises or Software as a Service [SaaS]) for instance, simply involve a monthly fee (usually significantly lower than an up-front perpetual license), which can be discontinued at the end of the contract period. An enterprise presumably would not renew a subscription if the software isn’t delivering the expected value.
According a recent Flexera Software report, enterprises are clearly moving away from the previously ubiquitous perpetual licensing model towards subscription and usage-based licensing. Less than half of organizations (45%) say that the majority of their software estates use perpetual licenses. In 12-24 months, this percentage will go down to 36%. Almost a quarter (24%) of respondents says the majority of their software estate uses subscription licenses. In 12-24 months this percentage will rise to 26%. Flexera Software predicts that the shift away from perpetual to subscription licensing will continue to accelerate. SaaS apps (which are usually paired with a subscription license model) will need license optimization as well—the focus will shift from license compliance to controlling software costs for SaaS applications.
Enterprise App Stores Will be Used to Enhance IT Governance
Enterprise app stores have seen rapid adoption in recent years as companies have sought to provide a familiar, consumer app store experience to employee requisition of applications. While employees appreciate the ease of use and speed of application delivery of these app stores, another important benefit of implementing them is to enhance software governance and enable IT and Procurement to retain control over software procurement and deployment processes. Consequently, enterprises will increasingly use enterprise app stores to enhance IT governance including, leveraging the ability of some app stores to check for license availability when a software request is made to proactively ensure license compliance prior to deployment.