Software Asset Management: What Is It And Why Is It Important?

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min read time
March 24, 2023
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Software Asset Management (SAM) is a set of practices and strategies that help organizations manage their software assets effectively. It involves various activities such as tracking licenses, analyzing usage, identifying risks, and planning future investments.

But why is IT Asset Management so important?

Managing software assets can help organizations optimize their usage, leading to significant cost savings.

Also, good SAM practices can ensure compliance with licensing agreements and prevent costly legal disputes. In this blog, we'll go over the basics of SAM, the benefits of IT asset management, and how to simplify it with software.

What is software asset management in business terms?

SAM has an array of real-life use cases, making it a go-to process, especially for teams managing software usage and investments. One real-world example of SAM is prevalent in the healthcare industry, where electronic medical records are crucial to patient care.

Hospitals and clinics use various software applications, such as patient management, billing, and electronic prescriptions. SAM practices help healthcare organizations ensure that they have the necessary licenses for each software application and that it is used efficiently and effectively.

For finance businesses

Another example of SAM in action is in the fin-tech industry, where organizations use software applications for various purposes, such as accounting, financial planning, and customer relationship management.

SAM practices help these organizations ensure they have the licenses for each software application and that it is being used efficiently. SAM can also help identify potential risks, such as unlicensed or outdated software, that could compromise security and jeopardize financial data.

Proper SAM practices can help financial organizations optimize usage, ensure compliance, and minimize spend, ultimately improving their bottom line. This also ensures they have more resources available for process-critical tasks.

Why is it important to manage software assets?

Software Asset Management (SAM) is crucial for organizations to avoid potential risks from mismanaging software assets.

Compliance risks

One of the most significant risks is non-compliance with licensing agreements, which can result in legal disputes and hefty fines. For instance, in 2018, a large healthcare organization was fined a hefty amount of $3.5 million for using unlicensed software.

Proper SAM practices help organizations ensure compliance with licensing agreements, minimizing the risk of legal disputes and financial penalties.

Security threats

Another risk that can arise from mismanaging software assets is cybersecurity threats. Outdated or unpatched software applications can be vulnerable to cyberattacks, compromising sensitive data and disrupting business operations.

For example, in 2017, a global cyberattack known as WannaCry affected over 300,000 computers in 150 countries. The attack exploited a vulnerability in outdated software, causing damage that involved a lot of data.

Proper SAM practices help organizations identify and address potential cybersecurity risks, such as outdated software or unpatched vulnerabilities.

Identify redundancies and save costs

Additionally, organizations may struggle to optimize their software usage without proper SAM practices, leading to wasted resources and increased costs.

For instance, if an organization has duplicate or unnecessary software applications, they may pay for licenses they don't need. Proper SAM practices help organizations identify and eliminate unnecessary software, reducing costs and improving efficiency.

Benefits of IT Asset Management

Budgeting and Cost Saving

SAM practices can save high costs by optimizing software usage and identifying unnecessary applications. This highlights the importance of SAM practices in helping organizations better allocate their budgets to other business areas by reducing software licenses and subscriptions.


SAM practices help organizations ensure compliance with licensing agreements, which is crucial in minimizing the risk of legal disputes and financial penalties.

An international media company was fined $3.5 million for using pirated software (Source), underscoring the importance of complying with licensing agreements.

By tracking software licenses and monitoring usage, SAM practices can help organizations avoid the risk of legal action and protect their reputation.


SAM practices can also help organizations address potential cybersecurity risks. Equifax, for example, suffered a data breach in 2017 due to an unpatched vulnerability in its software, which resulted in the exposure of sensitive customer data.

IT asset management practices can help organizations identify and address such vulnerabilities, reducing the risk of cyberattacks and data breaches.


SAM practices can optimize software usage, leading to improved organizational productivity. The city of London implemented SAM practices, reducing software-related help desk calls by 90% and improving productivity and efficiency.

This shows that effectively managing your software assets will secure your infrastructure and empower your teams to collaborate and deliver high-quality results.


IT asset management practices provide organizations with data and insights into their software usage, enabling better decision-making. Even universities, for instance, utilized SAM data to negotiate better licensing agreements with software vendors, resulting in cost savings and improved compliance.

By providing organizations with accurate and up-to-date information, SAM practices can help organizations make informed decisions and achieve their goals.

What does a software asset manager do?

Software asset managers are critical to managing an organization's software assets. They are responsible for ensuring that software is acquired, deployed, and used in compliance with licensing agreements and company policies.

They must monitor software usage and track licensing compliance to avoid legal and financial risks using software asset management tools.

A software asset manager's responsibilities include developing and implementing IT asset management tools and policies, processes, and procedures.

They must also maintain accurate records of software licenses, track license compliance, and manage software asset inventories. They work with procurement, and IT teams to negotiate licensing agreements and manage vendor relationships.

Additionally, IT software asset managers must stay current on software licensing trends and changes in licensing agreements. They must also analyze software usage data and provide insights to support software procurement and deployment decision-making.

Ultimately, their role is to ensure that software assets are effectively managed to optimize usage, control costs, and minimize legal and financial risks.

Simplify IT Software asset management with CloudEagle

Now that we know the importance of software asset management, let's take a look at how CloudEagle can help you. A good SaaS management platform like CloudEagle is the best solution to help IT and finance teams manage software assets efficiently.

An image of CloudEagle software asset management dashboard

Manage applications and usage

With 200+ integrations and browser extensions, ditch the spreadsheet to get complete visibility of your applications in one centralized location.

You can monitor app usage in real-time, analyze how your teams are utilizing your applications, and make necessary asset management decisions.

License Management

Software licenses are essential assets that have to be effectively tracked and managed. Prevent unused and underused licenses from eating up your budget by implementing

CloudEagle’s robust license management system helps optimize your costs and track usage data to see how they are used.

Renewal Management

Most software applications are subscription-based and renew automatically if not canceled in time. Stay one step ahead with CloudEagle’s workflows and automation tools and get notified before every renewal.

Contract Management

Storing contracts and invoices for software assets tends to get lost easily. Access all of them from a single dashboard and keep track of all your vendors’ information.


In conclusion, organizations today use many software licenses for their everyday operations. It is difficult to track the use of these licenses without a system in place.

Mismanagement of these resources can lead to loss of productivity, compliance issues, the threat of cyber risks, and much more. Hence, IT software asset management is an essential practice to help control and monitor an organization’s consumption of IT resources.

Software asset management is necessary to manage the IT resources of a company by handling software requests, maintaining records of licenses, and staying updated with new trends in the software licensing industry.

In general, it is a wise investment for businesses looking to optimize their software assets and simplify their IT processes.

When done right, CloudEagle can be your business's IT asset management software. Get started immediately by booking a demo with our experts to learn how SAM could help your organization effectively manage software assets.

Written by
Joel Platini
Content Writer and Marketer, CloudEagle
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