Beware The High Cost of Microsoft’s “Free” Software Asset Management (SAM) Review

Microsoft, which has been auditing its customers’ software usage more vigorously than ever, performs different degrees and types of compliance checks, including third party onsite audits, self-audits and software asset management (SAM) reviews. Some form of official Microsoft compliance check is inevitable for most organizations. If an organization hasn’t been audited or offered a SAM review by Microsoft recently, it will likely be soon. Software compliance checks are highly profitable for software publishers, as with new software purchases they increase revenues.

Each type of compliance check carries its own form of high labor cost, financial risk and impact on organizations. Many organizations go into a software audit or SAM review not expecting compliance issues, but later find themselves facing unlicensed findings and in a protracted dispute with Microsoft or a third party auditor over the compliance report. According to Bruce Liley, General Manager at Broomstick, LLC – a Reno based independent software licensing advisor company, “Software resellers and Microsoft mutually benefit from SAM engagements given the virtual certainty the targeted company will have license gaps and be required to make additional and often unwanted software purchases. Unless properly managed, Microsoft software audits and SAM engagements can be expensive and disruptive to organizations.” Liley had a successful 13-year career at Microsoft where he developed a majority of Microsoft’s Customer and Partner compliance programs and managed the Company’s global and North America compliance team which completed more than 9,000 customer and partner licensing audits under his leadership.

Microsoft is increasingly using SAM reviews as a means to reconcile its customers’ software usage with license entitlement and drive incremental sales revenue. SAM reviews follow a similar process to a formal software audit…a license reconciliation is completed and customers are required to purchase licensing shortfalls. SAM reviews are often marketed as a “no-cost” and beneficial process for organizations to complete and establish a licensing position baseline, identify opportunities to optimize licensing, better control costs, risks, and complexity. Businesses frequently agree to complete a SAM engagement not knowing they have an option to decline. The objective of the SAM review to drive incremental revenue becomes apparent once the SAM review process starts. Few, if any, of the marketed benefits of a SAM review are acheived during the engagement. “We recommend businesses carefully evaluate their options prior to agreeing to complete a SAM engagement. Alternative options include internally reconciling software deployment and license entitlement or using an independent third party who is not motivated to sell additional software (i.e. avoid using software resellers and partners to reconcile your organization’s licensing),” says Liley.

According to Liley, “The Microsoft audit and SAM software reconciliation process to determine under- and over-licensing by software products is inherently challenging to complete and requires a thorough understanding of the organization’s IT environment, users, and how the software is used. Licensing entitlement for certain Microsoft products can be assigned in several different ways, and it is critical that licenses be correctly assigned based on the organization’s specific IT environment. Microsoft licensing is complex and Microsoft audit and SAM engagement results frequently include errors.”

“We save companies an average of 64% of the audit and SAM findings through verifying the audit process is completed correctly, the data is accurate, and the licensing entitlement is assigned in a manner optimal for the end-customer.”

Broomstick’s team of former Microsoft licensing auditors assists organizations navigate a Microsoft software licensing audit and SAM review in any phase: from the point of receiving the compliance or SAM notification from Microsoft, to supporting organizations settle the compliance findings. “We’ve never not been able to assist a company,” says Liley.

“At a minimum, have an independent licensing expert review the compliance report findings….it could result in tens to hundreds of thousands, even millions of dollars in savings.”