The current climate of company mergers and downsizing is putting CIOs under pressure to keep the lid on software costs which now account for nearly a third of the average IT budget. Add to the mix software suppliers who are more determined than ever to make sure their customers pay for all the programs they use and software asset management (SAM) seems a no-brainer.

SAM, the process of recording what software licenses an organization has bought and making sure they match up with the programs that staff actually use and the way they use them, not only heads off the unwelcome attention of software suppliers and their lawyers, but can also cut costs.

"If you are on top of your game you save money," confirms Bobbie Ttooulis of services and software firm Computacenter. "If you have proper SAM in place you are going to have your computing under control and can be pretty confident you are sweating your software assets effectively."

However, SAM is proving problematic for many companies. Some lack the will to invest in the process, while others are bogged down in turf battles over who should gather the data. Many are just struggling to understand how their licenses work.

A Labyrinth of Rules
Finance departments are usually responsible for maintaining asset registers including software, while IT departments know how that software is deployed. "All too often the priority is tracking of physical assets and software is forgotten, so the information is not getting from IT to finance on how software gets used," says Karen Conneely of asset management software company Real Asset Management.

Despite the availability of databases to record information about licenses and so-called discovery tools such as Centennial, Eracent and EasyVista, which dispatch agents to inspect systems and log the software they are using, many users still rely on spreadsheets to track their assets.

But experts agree the task has become just too complex to manage by Excel. And it is likely to become even more burdensome as users move to new computing models such as virtual systems which have the capability to create and destroy code within a matter of minutes, making logging its use very difficult.

The predicted boom in browser-based software as a service (SaaS) is likely to create further complications with cloud-based computing sitting alongside, or integrated with, software that companies already run on their own premises. In any case, SaaS subscription terms are likely to become as complex as software licenses.

Neither software companies nor their customers have agreed on the best way to reconcile this new kind of usage with old-style licensing. Constant metering of software is one activity that is likely to become much more widespread, according to some experts.

"Virtualization allows the malicious user to pirate software. When companies head down the virtualization path, tools built-in by vendors fail to function," says Chris Holland, vice president of software rights management at security company SafeNet.

Even without new technical developments, current tools are struggling to keep up with the licensing landscape. For example, while discovery tools may be fine at logging software subject to a single user license, they may struggle to cope with concurrent licenses which allow only a proportion of potential users to access a program at any one time.

In addition, SAM software must cater to myriad different license terms, ranging from those related to named users to licenses that apply to each CPU. The recent development of servers with multiple cores has posed problems for software suppliers accustomed to charging customers a fee for each server an application is installed on. Software companies have still not settled on a good solution, analysts say.

The industry itself has been keen to maximize revenues from licenses. So-called true-ups - reports on the size of a user's estate which are used to calculate license fees - can account for up to 15 percent of revenues, say industry insiders. "It's easy pickings to go after your customers: all big suppliers have license-management practices," says Patrick Gunn, a vice president of SAM supplier ManageSoft.

But suppliers are taking steps to make it easier for customers to manage their licenses and software companies have collaborated on creating a series of ISO standards governing several aspects of SAM.

The latest concerns tagging - the headers that identify a piece of software - and seeks to lay down a standard way of identifying software from different suppliers. In addition, the IT Infrastructure Library (ITIL), a widely-used methodology for managing IT, has been extended to include SAM. "The ISO 19770 standard is only just coming out, but we anticipate it will be widely used," says Tony Baron, global vice president of IT services firm Dimension Data, and one of the authors of ITIL.

In addition, industry body the Business Software Alliance (BSA) has just launched a program designed to help businesses implement SAM programs. The BSA SAM Advantage aims to provide its members and their partners with a set of online SAM tools and training frameworks.

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