As Software Asset Management (SAM) matures alongside rapidly evolving licensing models, the perception of software as “just contracts” has become increasingly common—particularly in the era of SaaS. For many organisations, SaaS licensing is managed by procurement or vendor management functions with minimal engagement from traditional IT Asset Management (ITAM) teams. However, this evolving approach risks oversimplifying what remains a deeply nuanced space—especially when dealing with non-SaaS software and hybrid or on-premise environments.
At its core, SAM is a subset of the broader ITAM discipline. While SAM focuses on the optimisation, compliance, and cost-control of software assets, ITAM brings in a vital understanding of the physical and virtual infrastructure that software runs on. This interplay is often overlooked, yet it is precisely in this relationship that some of the most critical licensing risks and cost exposures lie.
SaaS: Simpler in Theory, Messier in Practice
SaaS has transformed how organisations consume software, shifting from perpetual licenses and installations to per-user or per-feature subscription models. On the surface, this appears to simplify management: no more device tracking, installations, or CPU considerations.
But in reality, SaaS introduces its own minefield of challenges:
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Shadow IT: SaaS tools are often purchased directly by business units without IT involvement.
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Duplicate subscriptions: Multiple teams may unknowingly purchase the same service independently.
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Over-licensing: Users may hold licenses they no longer use, especially after role changes or leavers.
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Lack of visibility: Many SaaS platforms don’t provide robust admin tools or APIs to track usage effectively.
In many organisations, the line between vendor management and SAM becomes blurred. When procurement teams treat SaaS as a simple contract—detached from actual usage—it’s easy to miss renewal creep, cost sprawl, or compliance clauses hidden in “click-through” agreements.
This decentralised purchasing of SaaS applications makes it even more critical to re-establish a coordinated ITAM-SAM strategy, where both procurement and IT are aligned on software oversight.
Software Is Not Just Contracts
Despite the growth of SaaS, many core enterprise applications remain firmly rooted in on-premise or hybrid environments—especially databases, infrastructure tools, and systems critical to regulated industries. These platforms still rely on hardware configuration and virtualisation design to determine license consumption.
When organisations treat software licensing as purely a procurement or commercial function, they risk disconnecting from the technical realities that impact license demand. This is where ITAM’s knowledge of the underlying infrastructure becomes indispensable.
The Hidden Risk in Infrastructure Changes
Perhaps the most underestimated impact on software compliance and cost is changes to infrastructure. When ITAM and SAM operate in isolation from infrastructure teams, the implications of architectural decisions are often missed until it’s too late.
A classic example is processor-based licensing. For many vendors—such as Oracle, IBM, and others—the number of processors, cores, or even the type of virtualisation platform can dramatically affect license requirements. Adding CPUs or cores to a host server or cluster may seem like a routine infrastructure task. But for licensed software, this can have a multiplying effect on license demand—sometimes doubling or even quadrupling costs.
Worse still, these changes are often made by infrastructure teams unaware of the downstream licensing implications, particularly if SAM or ITAM are not involved in change management or approval workflows.
Core-Based Licensing and the New Frontier of Minimums
The industry has long grappled with the complexities of core-based licensing. Vendors such as Microsoft and Oracle have introduced core minimums for years—often requiring a minimum of 4 or 8 cores to be licensed per processor, regardless of usage.
However, the recent shift by Broadcom has brought this issue sharply into focus. With the acquisition of VMware, Broadcom has introduced a staggering 72-core minimum license requirement. This move has been met with widespread concern, as it represents a dramatic departure from previous models and introduces significant new cost burdens for customers.
While vendors have always set licensing minimums, the scale of Broadcom’s new model signals a more aggressive approach to revenue generation—and a clear risk for organisations that don’t fully understand the relationship between their infrastructure and their license entitlements.
Back to the Data Center? Be Careful What You Wish For
Interestingly, this development comes at a time when some organisations are considering repatriating workloads from the cloud back into private or hybrid data centers in an effort to reduce spiralling cloud costs. While this strategy may offer savings in some areas, it also reintroduces complexities that cloud environments abstract away.
In cloud-native services, the responsibility for hardware is largely removed. But as organisations take back control of their infrastructure, they also take on the responsibility for managing licensing compliance in more detail—including CPU and core configurations, clustering models, and virtualisation technologies.
Without a strong ITAM-SAM partnership, this return to on-premise could result in a host of new cost exposures—potentially negating the savings of moving away from cloud in the first place.
The Call to Action: Reunite ITAM and SAM
The evolution of software licensing models—both SaaS and traditional—demands a more integrated approach to asset management. ITAM and SAM can no longer operate as siloed disciplines. Their interdependency must be embraced:
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SAM teams need access to accurate, real-time infrastructure data—whether virtual or physical—to model license usage correctly.
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ITAM teams must be engaged in change processes, especially those involving infrastructure upgrades, provisioning, or migration.
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Procurement must understand that software is more than just a contract, and that consumption is inherently tied to hardware, usage, and configuration.
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SaaS oversight needs to be reined in, with governance frameworks that bring visibility, usage data, and cost accountability back under central control.
This isn’t just about compliance—it’s about financial optimisation. In a world of rising licensing costs, vendor pressure, and cloud cost uncertainty, organisations that fail to bridge ITAM and SAM—across all forms of software delivery—risk losing visibility and control over one of their most significant areas of spend.
