Software Asset Management Market

[421 Pages Report] The software asset management market is expected to grow from USD 3.5 billion in 2024 to USD 7.3 billion by 2029 at a Compound Annual Growth Rate (CAGR) of 16.0% during the forecast period. The software asset management market has evolved significantly, reflecting the dynamic technology landscape and the complexities of managing software assets. Initially seen as a response to software audits, software asset management has grown into a critical business function, offering strategic benefits beyond compliance.

Over time, it evolved into a proactive approach, optimizing software usage and reducing costs through enhanced controls. The advent of software asset management solutions expanded its scope to data centers, the cloud, and mobile environments, addressing new challenges such as over-licensing and unnecessary costs.

Today, advanced software asset management programs integrate AI-driven analytics and automation, managing IT estates comprehensively. They utilize big data and IoT to provide insights into software usage, hardware interactions, and user behavior, supporting better decision-making. Software asset management's integration with IT service management enhances productivity and end-user satisfaction, making it a strategic asset for businesses.

Software asset management tools now capture extensive data on software assets, licensing, and the hardware they reside on. This data is invaluable for organizations navigating digital transformation journeys, enabling successful cloud transformations, enterprise mobility initiatives, and robust security and data management strategies. Furthermore, integrating software asset management with IT service management tools enhances the ability of IT departments to address and resolve issues swiftly, improving overall productivity and end-user satisfaction. The role of the software asset manager has also evolved significantly. It is no longer just a technical function; it requires a strategic advisor to manage the digital ecosystem, ensuring that software assets align with business objectives and deliver expected value. This role involves more than just managing licenses; it includes technology alignment, risk assessment, and effective governance. Visibility into software usage and needs helps eliminate shadow IT and supports better planning, forecasting, and budgeting. The software asset management market is pivotal across various verticals. In financial services, software asset management ensures compliance with stringent regulations and optimizes costly software licenses. It helps manage diverse software applications critical for patient care and data security in healthcare. Meanwhile, software asset management supports efficient production processes in manufacturing by managing automation and supply chain operations software. Each vertical leverages software asset management to enhance operational efficiency, reduce costs, and ensure compliance.

Flexera's 2023 State of ITAM Report highlights that wasted IT spending remains a challenge despite the increasing maturity of ITAM programs. However, software asset management programs have demonstrated a proven return on investment (ROI), with significant savings and cost avoidance reported by many organizations. The alignment of software asset management with FinOps, IT service management, and infrastructure operations teams further emphasizes its critical role in enterprise efficiency and financial health.
In conclusion, software asset management is no longer a static compliance function but a dynamic, evolving discipline that drives significant value for organizations. By embracing the latest technologies and practices, businesses can optimize their software assets, ensure compliance, and support their broader digital transformation goals. As the market continues to evolve, software asset management will remain the foundation of effective IT management, helping organizations navigate the complexities of the modern digital landscape.

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Recession Impact on the Software Asset Management Market

As per the Global Economic Prospects report of the World Bank, published in June 2022, the compounding effect of the pandemic and the Russian invasion of Ukraine has resulted in a magnified global economic slowdown. The software asset management market would have a short to medium-term impact due to the recession. During a recession, companies are under pressure to reduce costs and maximize the value of their existing software assets. Software asset management solutions can help organizations optimize their software licenses, avoid overspending on unnecessary software, and ensure compliance to avoid costly fines. This cost-saving potential can drive the adoption of software asset management tools. Economic downturns often lead to increased regulatory scrutiny and the need for stringent compliance. Companies may invest in software asset management to ensure they fully comply with software licensing agreements and avoid the financial penalties associated with non-compliance.

Software Asset Management Market Dynamics

Driver: Surge in adoption of multi-cloud adoption shaping software asset management market

The shift towards cloud computing and SaaS models has transformed the software landscape, introducing license management and compliance complexities. Software asset management tools are evolving to address these complexities, providing capabilities to manage hybrid environments that include both on-premise and cloud-based applications. This shift necessitates robust software asset management strategies to track usage, manage subscriptions, and optimize costs in a dynamic cloud environment.

Multicloud adoption is shaping the software asset management market. According to OVHcloud, 62% of organizations currently use a multicloud environment, with 18% actively transitioning to multi-cloud setups. Multicloud environments pose complexities that require effective software asset management practices to optimize software investments, avoid over-licensing, and ensure compliance with licensing agreements. Software asset management solutions tailored for multi-cloud environments enable businesses to centrally manage and track software assets across different cloud platforms. Moreover, multi-cloud software asset management supports industries where agility, scalability, and flexibility are paramount, such as technology, finance, and healthcare.

Restraint: Resistance to change and a lack of awareness

Many organizations, particularly those with established processes, are hesitant to adopt new technologies and practices, even if they promise long-term benefits. This resistance often stems from comfort with the status quo and a reluctance to disrupt existing workflows. Employees and management may fear that new software management solutions will add complexity to their operations or require extensive training, leading to temporary declines in productivity. The lack of awareness about the benefits of software asset management further exacerbates this issue. Many decision-makers do not fully understand how software asset management can optimize software investments, enhance compliance, and mitigate security risks. Building a compelling business case for software asset management adoption is challenging without a clear understanding of these advantages. This lack of knowledge is especially prevalent in industries where digital transformation is still emerging and traditional approaches to software management remain dominant.

Opportunity: Increasing focus on sustainability and green IT practices

Organizations across the globe are prioritizing environmental responsibility; there is a rising demand for solutions that help reduce their carbon footprint and promote sustainable practices. Software asset management solutions can be crucial in this transition by optimizing software usage, thereby reducing energy consumption and electronic waste. Its solutions help organizations extend the lifecycle of their IT assets. By providing comprehensive insights into software performance and usage, software asset management tools enable businesses to make informed decisions about software upgrades and replacements. This proactive management reduces the frequency of hardware disposal and the associated environmental impact. It also supports the principles of a circular economy by promoting the reuse and recycling of IT assets. Integrating software asset management with green IT initiatives enhances regulatory compliance and reporting. Many regions are introducing stringent regulations and reporting requirements related to environmental impact and sustainability. Software asset management solutions can help organizations accurately track and report software usage and its environmental impact, ensuring compliance with these regulations. This capability is precious as stakeholders, including customers and investors, increasingly scrutinize organizations' sustainability efforts.

Challenge: Difficulties with integration and implementation of software asset management with current technology changes

Rapid technological advancements and the continuous introduction of new software can make it difficult for software asset management practices to remain current and effective. Organizations must adopt agile software asset management strategies that quickly adapt to technological changes and incorporate new software into their asset management processes. Staying ahead of technological trends and continuously updating software asset management practices is crucial to maintaining effective software asset management; this requires a commitment to ongoing improvement and adaptation.

Based on solutions, the software discovery, optimization, and metering segment will grow to the largest market share during the forecast period.

Software discovery, optimization, and metering are critical components of the software asset management market, driving its growth and evolution. Organizations are increasingly adopting software asset management solutions that offer comprehensive capabilities in discovering software assets across networks, optimizing software usage to reduce costs, and metering to track and manage software utilization. Key market trends include integrating software asset management tools with cloud platforms to manage hybrid environments, using artificial intelligence for more precise optimization and metering, and the growing importance of real-time analytics. Regionally, North America and Europe lead the adoption due to stringent regulatory requirements and high awareness of software asset management benefits. Asia-Pacific is witnessing rapid growth driven by increasing digital transformation initiatives. Major players in the market include IBM, Microsoft, Flexera, Snow Software, and ServiceNow, each continuously innovating to provide more robust and integrated software asset management solutions. Market insights project a strong growth trajectory for software discovery, optimization, and metering, with an estimated CAGR of 14.4% over the forecast period; this reflects its critical role in enhancing operational efficiency and cost management in businesses worldwide.

By vertical, the healthcare & life sciences segment will grow at the highest CAGR during the forecast period.

The healthcare and life sciences sectors are experiencing significant growth as technological advancements and data-driven approaches become more prevalent. With the increasing digitization of medical records, telemedicine services, and research data, the demand for efficient and secure data management solutions has surged. Software Asset Management is critical in these sectors, as it ensures that all software applications and systems used in healthcare facilities and research institutions are appropriately licensed, up-to-date, and compliant with regulatory standards. As per Flexera, financial services (22%) and healthcare (11%) are the most prominent industries that use software asset management solutions.

Software asset management solutions help healthcare providers and life sciences organizations manage and optimize their software assets, ensuring cost-efficiency and reducing non-compliance risk with stringent industry regulations such as HIPAA and GDPR. By providing comprehensive insights into software usage and licensing, software asset management enables healthcare organizations to make informed decisions about software procurement, deployment, and maintenance; this helps optimize software costs and enhances operational efficiency by ensuring that the right tools are available for healthcare professionals and researchers.

As per region, North America will witness the largest market share in 2024.

North America's software asset management market is poised to hold the highest market share during the forecast period, driven by the need to optimize software licensing costs and manage compliance audits. The region's dominance is bolstered by its large enterprises with substantial IT infrastructure investments, necessitating efficient software asset management solutions. Key vendors such as Flexera, Ivanti, BMC Software, ServiceNow, and Broadcom play a crucial role in this market, employing organic and inorganic growth strategies to enhance their offerings. The United States and Canada lead in software asset management adoption due to their mature software ecosystems, with significant adoption in industries like banking, finance, healthcare, and manufacturing.

North America's software asset management market is driven by the need for cost optimization, compliance with regulatory standards, and efficient management of software licenses. The region also has a strong presence of local vendors such as Infraon, Open iT, and Eracent. The market benefits from technological advancements, increasing adoption of cloud computing, and the rising demand for automation in IT asset management. Key driving factors include stringent regulatory requirements, the high cost of software non-compliance, and the need for operational efficiency and transparency.

Various trends are driving the rapid growth of the software asset management market across North America, including increasing complexity in software licensing and subscription models, creating higher demands for advanced software asset management tools to ensure compliance and cost optimization, adoption of cloud computing, which will drive the need for hybrid environment management. AI and ML in software asset management tools amplify predictive analytics and automation, enhancing efficiency. At the same time, regulatory requirements and audits drive robust software asset management practices so as not to incur penalties. These trends have, thus, given a related meaning to the fact that software asset management is critical in modern IT and business activities.

Key Market Players

The software asset management market is dominated by a few globally established players such Flexera (US), Snow Software (Sweden), USU Software AG (Germany), Ivanti (US), BMC Software (US), ServiceNow (US), Certero (UK), Matrix42(Germany), Broadcom(US),  and Eracent(US), among others, are the key vendors that secured software asset management contracts in last few years. These leaders have secured significant market contracts recently and brought their extensive global processes and execution expertise to the forefront. Unlike local players with limited capabilities, these global powerhouses are revolutionizing software asset management. They are transforming traditional asset management practices by leveraging cutting-edge technologies like AI-driven analytics, automation, and cloud-based solutions. Companies adopting these advanced software asset management solutions experience a tangible impact: improved efficiency, real-time insights, cost optimization, and enhanced compliance across their IT environments. These benefits empower organizations to streamline operations and stay ahead in an increasingly complex digital world.

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Scope of the Report

This research report categorizes the software asset management market to forecast revenue and analyze trends in each of the following submarkets:

By Offering:

• Software
  • License Management
  • Audit and Compliance Management
  • Software Discovery, Optimization, and Metering
  • Contract Management
  • Configuration Management
  • Other Solutions
• Services
  • Professional Services
  • Managed Services

By Deployment Model:

• On-Premises
• Cloud

By Organization Size:

• SMEs
• Large Enterprises

By Vertical:

• BFSI
• IT & ITeS
• Telecom
• Manufacturing
• Retail & eCommerce
• Government
• Healthcare & Life Sciences
• Education
• Media & Entertainment
• Other Verticals

By Region:

• North America
  • United States
  • Canada
• Europe
  • United Kingdom
  • Germany
  • France
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • ANZ
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

Recent Developments:

• Snow Software launched a new standalone version of its SaaS Management platform, previously included in its software asset management solution. This updated platform empowers IT leaders to control SaaS sprawl, manage costs, and mitigate compliance and security risks. It provides comprehensive visibility and verifies usage data for over 23,000 SaaS applications, enabling organizations to optimize their SaaS portfolios and secure their environments effectively.
• Ivanti partnered with Securin to integrate Securin's Vulnerability Intelligence (VI) into Ivanti Neurons for the vulnerability knowledge base. The partnership enhances Ivanti's capabilities in managing software assets by providing comprehensive visibility into cyber threats and vulnerabilities, enabling organizations to proactively assess and prioritize risks related to their software assets.
• BMC Software collaborated with StarLink, the fastest growing 'True' Value-added Distributor (VAD) in the Middle East, Turkey, and Africa (META) region. StarLink promotes and distributes the entire portfolio of BMC IT software and services solutions.
• Flexera completed the Snow Software acquisition, enhancing its software asset management portfolio. This merger combines extensive domain expertise and technology intelligence, providing ITAM and FinOps teams with improved visibility and insights to manage spending and mitigate risks across hybrid IT environments.

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