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The Rise of Software Asset Management in the Cloud Economy

January 19, 2017

The cloud has had an enormous impact on how software is purchased, delivered and deployed, essentially transforming the entire technology economy. Software companies are increasingly moving toward a subscription and as-a-service model of pricing and licensing their solutions based on customer demand for cloud consumption as well as its host of benefits and conveniences. The shift has created some challenges around licensing and monetization of software, and is forcing businesses to realign their models and processes to compete and profit from the new cloud economy.

This transformation has given rise to the software asset management (SAM) market, described by Gartner (News - Alert) as a process for making software acquisition and disposal decisions. Beyond the customer perspective, the market encompasses the movement toward new types of licensing models to meet the demands of cloud and subscription services, while helping businesses consolidate licenses and eliminate redundant and unused software. With both software vendors and customers changing their processes toward software licensing and management, SAM solutions and tools are becoming a vital to ensuring companies glean the most value from their software investments.

Transparency Research has examined the market for IT asset management software, which was valued at just over $708 million in 2015. The firm expects the market to explode to a projected $1.3 billion by 2024, as both enterprises and SMEs look for ways to better manage software compliance and licensing. The forecast for cloud-based software management services is impressive as well, with cloud-based offerings set to make up nearly half of the overall market by 2024.

Already in widespread use throughout a number of vertical industries, the telecom and IT sectors are the leading adopters of SAM offerings, with the energy and utilities sector expected to rapidly increase adoption over the next few years. And while North America is currently the largest adopter of licensing and management solutions, the market is also growing in the APAC region, thanks to massive adoption of cloud-based solutions and services there.

SAM and IT asset management software is already playing an important role in the cloud and subscription services economy. As software producers continue to find new ways to monetize their offerings, businesses are also going to need solutions to manage licensing and usage of their software investments. Asset management offerings fulfill that role, ensuring organizations of all sizes get the most value out of their software investments and licensing contracts.

Edited by Maurice Nagle
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