The Snow team recently attended Gartner’s IT Sourcing, Procurement, Vendor and Asset Management Summit in both Dallas and London. This event always turns out to be an opportunity to learn about the latest trends in our space, hear from customers and share insights on the next big thing. Based on this year’s event, there were five key takeaways that seemed particularly insightful and useful for any organization dealing with IT sourcing, procurement, vendor and asset management.
Beware of the Digital Dragons Surrounding Your Industry
Gartner ITSV’s keynote “Winning in a World of Digital Dragons,” was the best presentation I attended at this year’s event. It started with the premise that “Every Industry is Becoming a Digital Industry” and spoke to the industry-wide shift from “product to platform” and the value of the “ecosystems” that these platforms create. This led to an introduction of Digital Dragons – think Amazon, Alibaba, Tencent, Facebook and Google – modern, hyperscale platforms with powerful ecosystems that touch pretty much every aspect of the enterprise. Gartner described Digital Dragons as the most complex partners that have ever existed. They touch everything we do – from e-commerce, digital payments to advertising – and there are few businesses that can run today without needing to engage a Digital Dragon.
For many of us that follow technology, the “rise of the digital dragons” is familiar news. What Gartner presented that was fresh in this discussion was a cohesive framework to help organizations develop a strategic position toward managing their relationship with each Dragon.
Today, most CEOs see Digital Dragons in their industry in the next five years yet have no strategy on how to deal with them. The guidance provided to “Build the Digital Dragons into Planning and Execution” by understanding their portfolio and how they generate money was brilliant. It’s this insight – customized by the organization – that can offer direction on how Digital Dragons may impact your industry next and how to best build a scenario through a partnership where both get value. The session closed on the role of Sourcing, Vendor Management and Asset Management in building intelligence on the Digital Dragons. Ultimately, it’s the job of these groups to understand these vendors better than anyone in the organization and leverage this knowledge into larger corporate strategy and competitive intelligence initiatives.
IT Spend is Increasingly Business-led and Asset Management Must Shift to Accommodate This
In the opening keynote, “Fortune Favors the Bold,” Gartner called out that 36% of formal IT spend is reported to be business-led spend. This spend is shifting from execution by procurement to self-service (and much of this is already in the cloud). While asset management remains key to optimizing costs, the way we manage those assets must shift focus to IP & consumption
If you’ve been reading the Snow blog over the past year, you may have read several posts (See Evolution of IT Asset Management) where we detail how the role of asset management is evolving. We’re proud to say this message was heard loud and clear at the 2019 Gartner ITSV Summit.
Gartner analysts stated multiple times during the event that as organizations modernize and shift away from legacy spend, that new approaches must be established for procurement and asset management to remain relevant to the way companies need to run to remain competitive. Most of these approaches centered on a need to transform the approach from legacy command-and-control to co-creation with business units and asset management working together. In this new world, asset managers must not simply be part of this co-creation process they must own it.
Cloud is Now Part of Everyone’s Job
In the talk, “Managing Software Assets in a Cloudy World,” Ryan Stefani spoke to the need for IT Asset Managers to take on the role of managing software assets in the cloud. Today, most Software Asset Management teams are not yet managing cloud spend. This lack of a seat at the table is a big risk to the organization as major cloud vendors such as Amazon Web Services, Salesforce and ServiceNow take on a larger percentage of the organization’s technology budget. He spoke to the complexity of “Mitigating License Compliance Risks in Multiple Environments” including on-premises which is seeing audit activity reduce but not disappear, private and public environments with complex Bring Your Own License (BYOL) policies that present an opportunity to be found out of compliance and SaaS publishers that retain the right to verify license compliance. He advised the expansion of SAM to include IaaS, PaaS and SaaS environments, and collaboration with cloud centers of excellence (CCoE) to formalize cloud governance.
In speaking to how cloud is impacting software asset management, several Gartner analysts touched on a very similar concept to what we have been talking about at Snow. Gartner positioned SAM at the “Nexus of All Technology Environments”. In this new view, software asset management must address the range of all technology used within the organization including SaaS, cloud and emerging technologies such as the Internet of Things (IoT).
This was the highlight of the event for me as it aligned perfectly with Snow’s recent launch of “Technology Intelligence,” an expansion of our core portfolio to six products that solve key business outcomes wherever help is needed – software, hardware, SaaS or IaaS.
SaaS Management – Should it be Your First Step in Managing Cloud?
Two themes emerged from Gartner signaling why we should be paying more attention to SaaS:
- Shift away from user-based pricing metrics to new metrics such as API-based pricing models
- SaaS may be the easiest path for asset managers to get a handle on the cloud.
Today, user-based and device-based pricing is one of the most common pricing metrics used in SaaS contracts. Despite the ambiguity the “user” metric creates for many of our customers, at Snow we have found most of our Snow for SaaS customers have a comfort level around user- and device-based metrics. Based on the data I saw at Gartner, many of you may be uncomfortable soon. (Snow for SaaS customers, don’t stress we have you covered!)
By 2021, Gartner predicts that “25% of the top 20 SaaS vendors will have API pricing across multiple product sets” and “50% of the top 20 SaaS providers (by revenue) will offer consumption-based SaaS pricing as standard”. With the expected shift in licensing metrics, it’s imperative for businesses to have strong demand management that includes API call forecasting and to actively analyze consumption patterns to determine the impact of these new changing models. While 2021 may seem far off, it’s not too soon to start thinking about this problem. Popular SaaS applications such as Salesforce’s Marketing Cloud already price using API calls as one of the metrics measured.
Beyond the fear upcoming licensing metrics brings, SaaS presents a path for asset managers, vendor management and procurement to get a seat at the “cloud table”. SaaS purchases fall in a space between IaaS (continuously purchased) and traditional software (purchased in cycles). The slightly slower cadence of SaaS purchase cycles versus IaaS provides a great opportunity to extend established best practices in asset management such as planning, metering and re-harvesting for the cloud world. With this foundation in place for SaaS, the natural next extension is IaaS.
Everyone’s Talking Cloud, but What’s Next?
Many of the talks at this year’s show spoke to either SaaS or IaaS/PaaS. For the talks that did veer outside this topic, most touched on emerging technologies – artificial intelligence, blockchain and Internet of Things – and the implications of these new technologies on IT asset management.
Snow Software’s Victoria Barber took this discussion one step further by not only speaking to these future technologies but also relating the implications of their usage back to the actual humans consuming the technology within our organizations. She spoke specifically to digital natives (younger millennials and gen Y) who are likely to find our current ways of procuring and managing technology bureaucratic and out of touch. This generation, she shared, will not wait for their businesses or employers to provide services and will procure it themselves creating significant risk to the organization in the process and killing all chances for the co-creation we referenced in Takeaway #2. The future of technology she stated is “human-centered” meaning that we need to ensure our processes and the tools we purchase to manage them “support and enable people in their day to day life.” To do this she stated, IT must change its focus from technology to the people who use it.
If you’d like to speak to one of us at Snow regarding our takeaways at Gartner or to understand how our platform can help get you the visibility you need into your software, hardware, SaaS or IaaS environments, please contact us here.