February 2005
According to the London-based Federation Against Software Theft (FAST), piracy costs the United Kingdom’s software industry an estimated ₤300 ($561 million) per year. In 1984 major U.K. software publishers fought back by forming the federation to lobby Parliament for stronger copyright laws. Parliament responded quickly, and in 1986 the first pirate was prosecuted under the new law. The nonprofit federation, now with 140 members, continues to push for tougher laws throughout the European Union. It functions as a kind of industry authority and police officer, conducting audits, publishing a legal update and filing punitive lawsuits, even seizing illegal software with the help of law enforcement personnel. In 1991 FAST launched the for-profit FAST Ltd., to better service the federation's corporate members. Owned by its three directors and the federation, FAST Ltd. has expanded with several subsidiaries, including Tenax Corporation in Richmond, Va.
In a series of interviews, Paris-based writer Rick Mitchell talked with FAST’s chief executive officer Geoffrey Webster about the company, the state of IT asset management services and the future of tool providers.
TAM: How is FAST structured?
GW: FAST Ltd. and its subsidiaries are commercial operations—separate legal entities not owned by the federation.
TAM: Can you tell us a little about FAST Ltd.'s asset-management-services business?
FAST Ltd. has over 3,000 subscribers working through our program to achieve software compliance. The services include two training workshops and unlimited support, both over the phone and in person. The customers are from the public and private sectors and range from the largest, with more than 100,000 PCs, to small organizations having more than 50 PCs.
Our subsidiary Stratic Ltd. provides services which address IT asset-performance improvement. In other words, we take organizations beyond merely having an asset register. Another subsidiary provides consultancy to the customer base, if they do not have the skill or people resources to get the job done.
We have programs which enable organizations to set up effective asset management regimes, and then we take them further by improving the performance of those assets. Performance improvement is usually measured in dollar terms—as savings or getting the same for less investment or ongoing spending. Typically we can reduce the IT budget by 15 to 20 percent. So, for a 5,000-PC environment we will see annual savings of approximately $3 million. We do not provide the tools. There are many good tools in the market, and we work to make sure that the right tool is chosen and is used effectively.
TAM: Does FAST Ltd. benefit from the intimidation factor of its link to the industry watchdog?
Oh yes, absolutely. We unashamedly point out that connection in our promotion and marketing, in essence telling potential customers, "You'd better get your act together and address the noncompliance risk!"
TAM: Many organizations fail in their efforts to launch and sustain an IT asset management program. Are service providers better positioned to make end users more successful asset managers—as compared with the companies themselves or with software publishers?
GW: From many an end user’s perspective, IT asset management is not mission critical and can be dull and boring. Boring or not, end users will come to ask themselves the same questions they do when considering outsourcing any function: How will I be able to measure the improvement in performance of my IT assets? The real focus is not so much knowing what you’ve got, but whether it is being used effectively to support the business.
My guess is that there will be a push from the software vendors to outsource asset management; and, yes, it will come from the existing players. Resellers of asset management tools will also move into this space. It’s a natural move for resellers, since they already have a relationship with the end user. Indeed, [U.K.-based] Computacenter is already providing services in this area, albeit at a rather rudimentary level.
TAM: If software vendors do offer asset management services, what might they look like, and at what price?
GW: This is a complex arena, covering both software and hardware and how these assets are deployed, upgraded, moved and disposed of. For a start, these are not skills possessed by the software vendor community; nor are they possessed by the majority of end users we encounter. Our guess is that service offerings will progress along the lines of other Web-based services, focusing on asset acquisition, disposition and movement data.
As current tools are upgraded, we expect the software-supplier community to provide the technical capability during 2005. In other words, we see outsourcing the data management coming before full outsourcing of the assets. Consulting firms are certainly in line to be in this market, in addition to some specialist firms.
I expect the end users will seek out the vendor that provides an asset performance-improvement program—basically, a program that adds value by providing structure and an accurate view of the assets which make IT an effective resource for the organization.
The initial start-up costs may be quite expensive. Gathering all the required data—through an audit and creating the repository—is typically in the range of $20 to $30 per PC. Ongoing costs may be quite small and would, in all probability, be subscription-based services. We expect the ongoing costs to be approximately $5 per PC per year.
As always, the trick with outsourcing and services programs is defining clear performance criteria up front. A clear idea of the benefits, in financial terms, will also help. Our experience suggests that a full-fledged and effective asset management regimen will generate operational savings of between $100 and $150 per PC, far outstripping the initial and ongoing costs.
TAM: Would vendor-supplied asset management services indicate a fundamental shift in the market?
GW: In many ways this is not so much a fundamental shift but rather an evolution of more options for the end user. Many end users will continue to manage and improve the performance of their IT assets in-house, using the available tools. Our experience shows that it is rare for this to lead to a best-in-class solution. Some will see opportunities in having a vendor manage the data for them and help them improve the performance of their IT assets.
The key, or fundamental, shift you suggest is one that will occur for the end user—recognizing that simply recording assets is not enough and that there are major benefits to be realized from addressing the contribution these assets make to business performance. Then, as they say, the excitement begins.
TAM: What role do you see FAST playing as this market takes shape?
GW: Our role both in the United Kingdom and the United States is to provide the expertise to help end users understand the benefits of an effective asset management regime. Our program enables them to achieve an effective, best-in-class asset management regime. In this role, we partner with the tool providers so that the end user has visibility of the available tools, their strengths and weaknesses as seen by existing users. We set out the decision tree for them to use in choosing a tool. For organizations that already have an asset management system, we deploy our performance-improvement program. When you know what you have, then you can do something with it.
TAM: Who will corner the market for delivering asset-management-tool services?
GW: We doubt that the major players will get directly involved in delivering services, but [rather] they will partner with the specialists (resellers, consultants and application-service providers). The Web-based tool vendor or the reseller will steal the show by selling the service and not the tool (e.g., sales-force.com in the United States). I believe that many firms—Bytes, British Telecom, IBM, CA, Peregrine, Altiris, Tally Systems—are eyeing the options, and [this kind of service] will become a reality in 2005.
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