The ITAM Review, the online community for worldwide ITAM professionals, has today published its inaugural ITAM Insights 2023 report, an annual analysis of the changing cost of software, hardware and cloud, as viewed by those charged with managing it – the IT Asset Management professionals. By examining the potential implications of these events on business decisions and budgets, the report equips IT professionals, C-level executives, and stakeholders with valuable insights to proactively manage their IT assets, maximize returns on investment, and minimise the disruption to their business.

The report is being launched today during a keynote by Rich Gibbons, MD of ITAM Review at the Wisdom EMEA 2023 conference. Commenting on the findings of the report, Rich says, “Businesses rely on predictability and certainty to plan for the future, particularly when it comes to their costs. But the last 12 months have been anything but certain. Even if you discount the political events, the amount of change within the IT industry itself is enough to raise eyebrows in the boardroom. When you’re facing – at best – double-digit prices rises now and potentially significantly more in the near-future due to seismic changes in the licensing terms of core business software like IBM and Oracle, this is no longer just something for IT Asset Managers to worry about. This is a board level concern.”

“The “ITAM Insights 2023” report presents a comprehensive analysis of the key industry events that are expected to shape the IT landscape throughout the year, and is essential reading for anyone who needs to understand the main changes coming their way – from day to day through to long-term strategy.”

The report examines the three main changes to IT management in the last twelve months, namely double-digit software price rises, significant changes to software licensing contracts among tier 1 software vendors (i.e. “license gouging”), and a wealth of Mergers & Acquisitions among software publishers. The report examines, among others, the following developments:

Global price rises

  • IBM global price increases for all non-SaaS products of around 24% in most regions including GBP, EUR, Japanese Yen etc. (SaaS products received their own, albeit lower price increases)
  • Microsoft “price harmonization” saw most prices rise in double digits (e.g. GBP: +9%, EUR: +11%, Danish Krone: +11%, Norwegian Krona: +11%, Swedish Krone: +15%
  • Oracle support costs up 8% in US and APAC

Contract & Licensing changes

  • IBM Passport Advantage self-reporting requirements: Customers now required to measure their own consumption of IBM licenses and report to IBM on their request within 30 days
  • Oracle Java switches to an all-encompassing “employee” licensing, whereby an employee includes full-time employees, part-time employees and temporary employees (i.e. contractors, outsourcers, consultants etc.). Some customers are reporting this change alone could see costs increase by up to 10x

Mergers & Acquisitions

  • TIBCO + Citrix merger: February 2022 saw the acquisition of Citrix for $16.5 billion by “Vista Equity Partners” and “Evergreen Coast Capital”: Mergers & acquisitions involving software companies often leads to an increase in compliance audits, thus there is now an increased risk of software licensing audits focusing on Citrix software.
  • OpenText acquires Micro Focus: Both organisations are well known for their difficult and aggressive audit tactics, and it is our view that customers should be prepared for new compliance checks and audits within the next 12 months.
  • Broadcom looks to acquire VMware for $61 billion: In addition to the expectation of price rises for some VMware products, it is likely that Broadcom will look to divest many of the less profitable parts of the VMware portfolio, meaning uncertainty for customers using those product lines.

Commenting on the various issues raised in the report, Rich Gibbons stated, “This annual report highlights the key changes over the previous 12 months that may impact ITAM professionals, their stakeholders, corporate leadership and the organisations at large. Ignited by COVID-19 and driven by rising inflation, soaring energy costs, and geo-political instability, 2022/2023 saw a range of price increases from software publishers – across on-premises and SaaS product lines. We have witnessed a substantial upward trend in software licensing and subscription costs over the last year, making it increasingly challenging to manage IT budgets effectively. These price hikes directly impact the bottom line, squeezing financial resources and necessitating difficult decisions regarding resource allocation. With spend increasing and no commensurate increase in value being received by customers, software & cloud cost management must be a C-level imperative for all organizations.

Coupled with this, there have also been significant changes to licensing rules and contract terms from some Tier 1 vendors, some of which could be construed as ‘license gouging’ – where the license terms are tweaked solely to maximise revenue for the vendor. These amendments not only raise costs significantly, but add further complexity and overhead to managing software entitlements and performing renewals as well as introducing further compliance and financial risks to the business. Lastly, merger and acquisition activity among software publishers is something that customer organisations should pay close attention to as it can have a profound impact in various ways, including changes to product roadmaps and support, supplier stability, long-term viability and increased risk of vendor audits.”

The fast-paced evolution of technology has made Information Technology Asset Management (ITAM) an essential discipline for organizations seeking to optimize their operational efficiency, enhance cybersecurity measures, and maintain compliance with regulatory requirements. As businesses strive to navigate the dynamic landscape of digital transformation, the ability to make informed decisions regarding IT assets has become paramount to ensure competitiveness and success.”

To download a copy of the ITAM Insights 2023 report, visit https://itassetmanagement.net/2023/06/15/itam-insights-report-2023/. For the latest insights on the ITAM industry, sign up to the ITAM Review newsletter.