Raju had a small IT firm for which he provided security, backup, and hosting for three clients. He also purchased Office 365 licenses for a handful of users directly from the Microsoft Office 365 website. He would bill them accordingly to his different clients. Raju also had a ServiceNow SAM application or SAM portal, which he tried to develop to help end users better communicate with one another. It was his love. It was comparable to SharePoint but more seamless and featured a stronger connection with third-party apps. He had a Microsoft agreement and had one person who submitted their usage report to their reseller. Unfortunately, that person became ill and died. Raju, like the rest of the staff, felt depressed.


To set his mind at ease, he worked on his ServiceNow SAM application every waking hour. Raju expected it to be the next best thing in his life.


A year later, Raju is still working on improving the SAM portal, and he's still hosting. One day, Raju received an email directly from Microsoft. It was titled “Self-Audit”; guess what?? Raju was getting audited.


One thing left unmentioned; Raju is the nicest guy on the planet, an honest man. So, he responded to Microsoft and eventually furnished them with everything. His server details, client name, and reporting history were all available. It was an auditor's dream.


Read More: How HAM & SAM Complete IT Asset & Spent Management?


What makes You Pay an Uncleared Licensing Costs


Microsoft provided Raju with the findings some weeks later. He owes $750,000 in undeclared licensing costs. Why so high?

Since the lady who reported licenses died, no usage has been reported. Not only that, she reported incorrect details at the time of reporting. Instead of licensing Windows Server Datacenter, she reported windows server Standard. Instead of reporting physical processors and cores, she reported: "per VM."


Everything was a mess! Raju, who neglected his hosting practice for months to focus on his ServiceNow SAM application, was left very uncertain about his future. He did not have the funds to pay for licenses to Microsoft.


It’s unfortunate, but Raju had to shut down his hosting business. The application he built, Stopped. He tried to sell it, but very few were interested in that.


Read More: What is Software Assurance? Why Maintaining it is Important


Why Licensing is a Challenging Process


Why am I sharing this story? I'm sharing this story because many organizations are doing the same thing. They have one person who handles the licenses, one who communicates with the reseller, and one who knows what they are reporting. What if that person decides to leave or something unfortunate happens to them?


Licensing is challenging, and in the case of Raju, his love wasn’t reporting usage. It was developing a ServiceNow Software Asset Management application. He should have allocated resources to help manage his licenses to focus on what he knows best in the technology.


Read More:  Acquire The Detailed Information About ServiceNow SAM

Benefits of Using SAM in Business 

Managing the required software assets and licenses becomes increasingly difficult when businesses develop and become complex. This is where Software Asset Management (SAM) helps. SAM assists businesses in keeping track of software usage, licenses, and compliance needs. Here are some of the benefits of implementing SAM in your organization.  

  1. Cost savings - It assists businesses in identifying and eliminating unneeded software licenses, reducing wasteful software spending.  

  2. Compliance – It guarantees that businesses comply with software licenses and avoids legal and financial fines.  

  3. Increased efficiency – It assists firms in optimizing their software utilization, which leads to increased productivity and efficiency.  

  4. Enhanced security – It improves overall security by keeping track of software vulnerabilities and ensuring that they are addressed promptly.  

  5. Better decision-making - It gives insights into software usage and assists businesses in making informed software purchase and renewal decisions.  

  6. Accurate forecasting - It helps companies estimate future software needs and plan software purchases and renewals accordingly.  

  7. Vendor management - It assists businesses in keeping track of their agreements with software vendors, including contracts, licenses, and support.  

  8. Improved asset tracking - By allowing businesses to keep track of software assets and their utilization, SAM makes it easier to manage and prepare for their lifecycle.  

  9. Increased transparency – SAM gives transparency into software usage and spending, helping firms to make smarter software investment decisions.  

  10. Reduced risk - SAM helps businesses reduce the risk of non-compliance and financial penalties connected with software licensing.  

  11. Improved cooperation - It enables diverse departments within an organization to collaborate and manage software assets, hence enhancing overall collaboration and efficiency. 

Read More: Skills Required for ServiceNow Developer

Bottom Line

Raju's experience with Microsoft's licensing audit clearly emphasizes the significance of efficient software license management. Improper handling of licenses can lead to substantial financial losses and can even result in the closure of a business. The lesson to be learned is that licensing can be a complicated and challenging process, and it's best to seek expert advice to avoid similar situations.

At inMorphis, we offer expert license advisory services that help businesses stay compliant and cost-efficient. Don't let licensing mishaps like Raju's plague your organization.

Learn more how our Complete IT Asset & Spent Management solutions can benefit your organization.