Software audit costs continue to rise as nearly a quarter (22%) of respondents pay millions
Flexera, the global leader in Technology Intelligence, released the Flexera 2024 State of ITAM Report, which found that 53% of IT teams report challenges gaining or maintaining complete visibility of technology investments, suggesting a persistent visibility gap in IT. Nearly a quarter (22%) of the global IT leaders surveyed shared they have paid more than $5 million in audit costs over the past three years, up from 15% in 2023.
Flexera’s annual report, which surveys global IT professionals, investigates how the maturity of IT asset management (ITAM), FinOps, security, software asset management (SAM) and hardware asset management (HAM) teams impacts the value they deliver to their organizations. It also provides a view of the future of ITAM and SAM teams as they evolve to serve the needs of hybrid IT and cloud-first organizations.
“CIOs should be alarmed that 53% of IT teams lack complete visibility into technology assets,” said Becky Trevino, Chief Product Officer at Flexera. “Organizations that lack complete visibility overspend on technology, face higher cybersecurity and compliance risk, see reduced IT service management (ITSM) data quality, and slow the pace of growth initiatives. One of the root causes of this visibility gap is siloed teams and systems. Flexera encourages a unified approach that integrates technology, people and systems across the disciplines of FinOps and ITAM to support IT in closing the visibility gap.”
The Flexera 2024 State of ITAM Report highlights the crucial role of cross-functional collaboration for ITAM teams, especially as visibility gaps and software audit costs continue to create challenges for many organizations. ITAM professionals also increasingly recognize the value of their data across various departments, including FinOps, security and ITSM. There’s been a notable increase in engagement with FinOps, rising to 32% from 25% last year, while the connection with C-level executives remains solid at 44%.
ITAM data integration into enterprise systems and CMDBs is growing, reflecting expanded responsibilities in software as a service (SaaS) tracking, security analysis, contract renewals and software licensing management. This positions ITAM professionals as essential to providing key IT data and insights.
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Highlights from the Flexera 2024 State of ITAM Report include:
- Wasted IT spend still high, between 20% and 30%: Despite ongoing efforts to optimize IT budgets, estimates of wasted IT spending remain significant. Even advanced ITAM practitioners self-estimate 30% wasted spend on desktop software, 22% on data center software, 21% on infrastructure as a service/platform as a service (IaaS/PaaS), and 20% on SaaS software. This number may change over the course of the year, as there is increased pressure on CIOs to reduce wasted spend, reinvesting funds from “run the business” initiatives to AI.
- Rising costs from software audits remain a concern, with almost a quarter paying more than $5 million in the past three years: This year, 22% of respondents reported paying more than $5 million in the past three years due to audits, an increase from 15% last year for the same question. Moreover, those spending over $10 million nearly doubled from 7% to 12%. This sharp increase has made audit response a top priority among IT professionals, while major vendors like Oracle, IBM and ServiceNow are reportedly intensifying their audit activities.
- Collaboration across ITAM and FinOps is increasing: ITAM teams have increased their interaction with various enterprise teams. Notably, 32% of SAM teams have engaged with FinOps teams, up from 25% last year. Meanwhile, the level of interaction with the CIO/CTO has remained stable at 44%.
- Visibility into IT spend is improving but still lacking, especially in SaaS: The combination of ITAM and FinOps tools and processes have enhanced visibility across IT environments. This year’s report showed that approximately two-thirds of respondents feel they have an accurate view of their on-premises software (67%), on-premises hardware (65%) and cloud instances (64%). SaaS usage has less visibility (54%), and most respondents don’t feel confident in their BYOL posture (19%). Despite improvements, there’s still a significant visibility gap that needs to be closed.
- Cost avoidance is the top method used to drive savings: When asked how SAM teams have achieved significant savings in the past year, 45% said “reuse of licenses to avoid buying new ones (non-cloud);” 37% said “better negotiation of vendor contracts;” 36% indicated a “reduction of maintenance spend on unused software;” and 34% each said “purchase of less expensive license option (correct SKU for application needed),” “reuse of on-premises licenses in public cloud (BYOL),” and “audit compliance (reduced remediation activities).”
- Microsoft, IBM, Oracle, SAP and Salesforce audit the most: When respondents were asked which vendors have audited their organization in the past three years, 50% of respondents said Microsoft, 42% said IBM, 31% said Oracle, 30% said SAP, 25% said Salesforce, 24% said Adobe and 20% said ServiceNow.
Most cloud centers of excellence (CCOEs) have an ITAM/SAM member on the team influencing an organization’s cloud journey: 72% of respondents have a central cloud team; 88% of CCOEs have an ITAM/SAM member on the team.
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The full survey results are available in the Flexera 2024 State of ITAM Report. This year’s report explores the thinking of 503 global professionals in organizations with at least 1,000 employees who manage and participate in ITAM, SAM and HAM processes. The Flexera 2024 State of ITAM Report enables IT leaders to benchmark their ITAM practices and results against other organizations.
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