Software as a Service will evolve in 2015

2015: The year that software licensing democratises, the reality of SaaS is revealed, and app stores show their worth to the IT function within business (not just the employees). This year, enterprises can make a choice between offensive and defensive strategies when it comes to managing their most costly asset. Those who get ‘predictive’, implementing processes and technologies to get full visibility on their software licenses, will be able to significantly reduce costs and corporate risk. For those who take a reactive approach, be warned- software audits will continue unabated and with even greater frequency.

To best prepare IT pros for the year ahead, here are our predictions on the new directions the industry will take.

1. All is not what it seems with SaaS

While we can expect enterprises to continue implementing Software-as-a-Service (SaaS) applications, such as salesforce.com, some of the major benefits touted by the SaaS movement – that SaaS lowers overall costs and eliminates waste around software spend – will prove to be incorrect. Organisations will learn that hidden waste remains within their SaaS budget, and they need to be proactive about understanding the licensing complexities around SaaS apps. This means implementing the appropriate Software License Optimisation processes and technology to manage that complexity, minimise spend, and ensure they are only licensing the number of seats they need.

2. Software licensing will democratise

The era of the perpetual license monopoly on software will be over in 2015. Companies are realising that a multiplicity of purchasing models for software can better align their cost to value- for example, subscription licenses and utility models where you pay by specific types of use – such as number of transactions processed or number of features used. But a single licensing model will not prevail and companies will need to learn how to manage an increasingly diverse and complex stable of software titles.

3. App stores will become key enablers for IT services delivery

In 2015, the utility of self-service enterprise app stores will expand beyond that of simply providing employee access to company apps. IT will discover that app stores are an ideal environment to consolidate disparate and separately-managed systems – such as mobile and desktop application management. App stores will also be used to enable proactive license management by integrating application requests into existing Software License Optimisation processes and enabling employees to partner with IT in managing application usage, reclaiming unused applications, and minimising waste.

4. Vendor software audits will increase – adding to corporate risk

Software vendors’ ability to hit their bottom-line revenue targets will continue to rely upon true-up fees extracted from customers via invasive software license audits. Consequently, the common vendor practice of conducting these audits will continue unabated in 2015, impacting the cost and risk profile of companies of all sizes. According to our recent survey, in 2014 21 per cent of these audits yielded fees to vendors of $1 million or more, with Microsoft the most aggressive auditor.

5. Agile release cycles overwhelm IT teams

The agile development trend will continue in 2015, resulting in more-frequent application enhancements. These enhancements will involve the full spectrum of enterprise applications, from major application upgrades, such as operating system enhancements, to minor patches and bug fixes. Because IT teams must undertake the same processes to test new applications, identify potential problems and fix them before rollout – IT teams will hit a tipping point in 2015 as the volume of work exceeds the ability to deliver. More widespread adoption of Application Readiness best practices and automation will however drive consolidation of these activities as IT teams are forced to do more with less.

6. Vulnerability will be dependent on Application Readiness maturity

Companies run on software, and accordingly their ability to implement the latest and greatest software packages and upgrades, when they are strategically needed by the business, impacts competitive advantage. While Application Readiness (e.g. The processes of: identifying target applications; rationalising those apps to minimise redundancy, assessing compatibility, migration planning, fixing errors and repackaging the app, and handing it off to the deployment system) will become essential for business (i.e. migrating off unsupported Windows XP) – some organisations will achieve Application Readiness maturity sooner than others in 2015, giving them a competitive advantage, and leaving the laggards more vulnerable to IT failure, user dissatisfaction and business risk.

Source: Mark Bishof is CEO of Flexera Software.

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