The ITAM and SAM (R)evolution – Megatrends Changing the Program

By Dr. Jan Hachenberger, KPMG

Three decades ago, the IT budget was primarily assigned for the acquisition and maintenance of IT infrastructure. Software was part of IT infrastructure as an embedded system or solution running on mainframes. IT infrastructure came as high-priced capital assets with significant strategic and economic value for businesses. It had to be planned, designed, budgeted, acquired, deployed, maintained and updated or changed. When infrastructure items had to be retired and replaced, all had to be managed. IT Asset Management (ITAM) developed focusing on:

  • Maximizing the value of IT infrastructure
  • Supporting the IT life cycle management
  • Making strategic decisions for IT environments

ITAM accomplished these goals by applying practices that join financial, contractual and inventory functions. Since the mid-1990s and the replacement of mainframe architecture by client server architecture, software became more and more hardware independent and, due to the direct link to critical business processes and an increase in prices, a strategic asset itself that also had to be managed. In addition and as a stipulation for a change in priorities, TCO for hardware remained almost at the same level. With mainstream adoption of hardware virtualization and IT consolidation from the year 2000 onwards, even a slight decline could be determined. One could consider this the birth of Software Asset Management or SAM as a supplement to ITAM. According to the Information Technology Infrastructure Library (ITIL), SAM represents “… all of the infrastructure and processes necessary for the effective management, control and protection of the software assets throughout all stages of their lifecycle.”

Since 2010, the IT world is experiencing new challenges and new possibilities – we can call them IT megatrends – that impact the question of whether ITAM and SAM are still applicable concepts. Three of the most prominent IT megatrends that everyone keeps talking about are cloud computing services, atomization and consumerization of IT.

IT Megatrend No. 1 – Use of Cloud Computing Services

The power of the Internet has increased significantly in recent years. Higher data rates and new and reliable compression and encryption technologies are the basis for new Internet services, e.g. cloud computing services. With cloud computing services, companies can use computing resources for different IT services over the Internet. Overall, cloud computing seems to be very similar to a mainframe architecture having:

  • Client devices that are used as terminals for data input and result representation and that are connected
  • Data center to whom the devices are connected (Infrastructure as a Service = IaaS), which in turn runs applications (Software as a Service = SaaS) that analyse the data input, generate a result and transfer the result back to the connected client devices

Yet, besides elasticity and scalability another main difference to the mainframe architecture concept is that cloud computing services are quite often provided by a third party, a commercial cloud computing service provider. In a scenario like this, businesses that make use of such a service offering do not own the software assets, i.e. licenses, for the actual application and only require limited hardware assets. Businesses only purchase the service and pay a recurring fee to the service provider.

IT Megatrend No. 2 – Atomization of IT

At the turn of the century, a new type of client device became available, the so-called smart phone. It was followed by new device forms, continuing through 2010 with tablets and phablets (hardware atomization). Yet, it was not until Apple Inc. introduced the iPhone in 2007 when software vendors identified the commercial potential of such devices and the demand for add on software to utilize all of the hardware features such as touch, GPS, motion sensors and connection to the web. To make such software easily available to its customers, Apple used its media platform iTunes. Others like Google, Microsoft, RIM and Nokia followed with their own version of such an app store. Apps are small applications and fairly often are a subset of software features found in commercial desktop software (software atomization). Atomized software fulfils a specific purpose, e.g. data input, data representation or access to information or services and, in many instances, is provided as a cloud computing service. Since today’s client devices such as notebooks and tablets share a common technology with smart phones, more and more software vendors provide a large variety of small apps instead of large, inflexible software suites to better meet their customers’ needs. With this rising atomization of IT, control of purchase and use of such apps on multiple devices becomes a new challenge, particularly since the price of such apps and mobile devices is usually too low to be tracked as part of the operating assets of a business.

IT Megatrend No. 3 – Consumerization of IT

Software vendors also invest in an overall integration of their apps and recently with all devices of a user; from the company notebook, the company smart phone to the private notebook, tablet or multimedia centre at home. The relevant data is made available through cloud storage solutions. It seems only a logical step that with the overall availability and access to business relevant information and an ascertainable dissolution of the rigid boundaries between work and private life, employees want to simplify their lives by using their preferred device for both; and they challenge their employer to have that freedom of choice – or in other words “BYOD = bring your own device.”

The consequences for ITAM and SAM are rather obvious. Besides new IT security risks, businesses have to deal with:

  • A decline in the number of IT assets owned or directly controlled and sometimes a complete abandonment of the acquisition of IT assets (full service IT outsourcing)
  • An increase in accounting complications for IT assets as well as in the discovery and tracking of IT assets, especially on uncontrolled non-company devices

Notwithstanding further challenges, the principles of ITAM and SAM do not seem to apply to the implications of the aforementioned IT megatrends. It has been very important to have license managers with a profound knowledge of software license terms, tools that provided a complete and accurate discovery of hardware assets and software deployments and processes that ensured controlled hardware and software purchases. It is still relevant for an effective and efficient ITAM or SAM for in-house operations. However, it is now even more important to:

  • Analyze business processes with regard to their IT requirements
  • Define IT solutions or identify available IT solutions that, when utilized for the business processes, generate the highest return on investment
  • Develop a clear strategy for IT outsourcing
  • Choose reliable partners that develop and / or operate the different IT services of the IT solution
  • Determine the users and devices that should be authorized to access the IT services

All of this calls for the repositioning of ITAM and SAM away from the sometimes unpopular compliance and TCO issues that receive marginal management attention and are dealt with by a few specialists almost unnoticed in IT operations or procurement. ITAM and SAM need to become a strategic support function of business development linked with all business units across an enterprise. We call this the next generation of ITAM and SAM:

  • SAM 2.0 (Service Access Management)
  • SAM 3.0 (Solution Development and Application Management).

Let the (r)evolution begin.