I was recently at a BCS Software Asset Management Networking event, and the time-honoured spectre of cost-savings raised its head. Paul Davis of Merlin Corp Ltd raised the question during a presentation given by Greg Holmes of Flexera: Why don’t Software Asset Management Consultancies/Vendors lead with a “Savings as a Service” delivery model?
Due to the ensuing heated debate, the phrase “light at arm’s length and stand well back” did spring to mind! (God bless ya, Paul!) But it is a point worth discussing further…
Paul’s argument being, that if you enter into an engagement with a client and potentially save a client £1M in liability, then seeking a gain-share fee of 20% (as an example) would net the Software Asset Management provider a tidy £200K.
However, let’s consider the current state of the Software Asset Management market: Many Software Asset Management tool providers are realising that there is great value in making a sale of a product based on the number of devices being managed; so license fees will always be healthy in the enterprise space. Further capital can be generated by offering consultancy around installing and tailoring the suite to integrate with existing tools, and to provide the reports that best serve the business. Finally, if a client is suitably impressed with all efforts gone before, they may even hand over the Software Asset Management function to the Software Asset Management provider to be run on the client’s behalf.
Software Asset Management providers worth their salt should be driving towards the top tier, but equally offer a jigsaw-piece approach to drop in elements of their offerings as and when the client calls upon them, but for guaranteeing accuracy of information, it is preferable if an established managed service is in place so that source data can be validated in good time, rather than rushed through.
So to return to Paul’s question: does gain-share have a place in the market, at least as it is described above? Probably not, no – as consultancies/practitioners would prefer to aim for a mutually beneficial/longer-term relationship.
Another problem with gain-share lies in the long-term assessment of fees to be charged. Hopefully in a Software Asset Management service any solution offered won’t be “point in time”; underlying fault-finding will correct the errors that led to liabilities being found in the first place – how do you leverage fees against improved installation and change management processes that don’t permit flawed deployments?
A point to note though: Not everyone is after a touchy-feely Software Asset Management service; plenty of companies require “a shot of Software Asset Management” and no more – so perhaps gain-share might be a rarely offered arrow in your Software Asset Management armoury; I guess it’s down to what sort of a relationship you believe is to be had out of the engagement.