The dominance of software resellers in Gartner’s latest SAM Magic Quadrant has sparked debate over potential tension between the two activities.
Just like last year, the four companies crowned ‘Leaders’ in the analyst’s 2024 Magic Quadrant for Software Asset Management Managed Services are all either resellers, or owned by resellers.
The 12 providers featured saw scheduled and continuous SAM managed services revenue hit $530m in 2023, and have enjoyed a 15% CAGR for the past two years.
Crayon-owned Anglepoint led the way, with Trustmarque-owned Livingstone Group, Crayon and SoftwareOne completing the quartet situated in the top-right-hand box.
“A major issue”
On LinkedIn, ITAM & FinOps Consultant George Arezina questioned the lack of independent providers represented in the research.
“While resellers bring vast expertise in SAM and diverse licensing models, there are notable concerns,” wrote Arezina, who is a board member of the ITAM Forum and also Head of Enterprise Asset Management at Takeda Pharmaceuticals.
“Conflict of interest is a major issue, with the potential for overspending due to a focus on license sales rather than asset optimisation.
“Additionally, there’s the risk of biased assessments and the danger of vendor lock-in.”
Insight and SHI also made the cut as ‘Niche Players’. Bytes and DXC Technology were dropped from last year’s Magic Quadrant, with EY and Accenture both added.
Addressing the independence of reseller or reseller-owned SAM businesses, Gartner noted that risk-reward cost models increased in use to over 39% of contracts, up from 15% in the previous year. These are “most prevalent in the reseller category, potentially offsetting concerns regarding conflict of interest”, the analyst noted.
Talking to IT Channel Oxygen, Rich Gibbons, Head of ITAM Engagement at independent SAM consultancy Synyega said concern is “probably stronger than it has been” following a spate of resellers acquiring independent SAM consultancies, as well as the prominence of the ‘Big Four’ consultancies who also carry out vendor audits.
Having been the “only truly independent” player left in Gartner’s quadrant, Livingstone was last year acquired by Trustmarque, while Crayon-owned Anglepoint acquired the UK’s FisherITS in 2022, he pointed out.
“Customers want to be sure the advice is impartial and – even subconsciously – not driven by alignment to a vendor, a rebate or hitting a target,” Gibbons said.
“The resell partners talk about having walls between their sales and their services, and I’m sure they do. But as a reseller, one way or another your business is shaped by the publishers – so I can see why customers have that concern.”
Gibbons conceded his new job – he joined Synyega from the ITAM Review earlier in the summer – means he has a “vested interest”.
“The most important thing for customers is to be fully informed – there are pros and cons to both approaches,” he concluded, however.
Singing SAM’s praises
The 12 companies featured reported that they delivered an ROI of more than 200% (meaning that savings exceeded the costs of the managed service by a factor of two, at least for more than half of their clients under management), Gartner said.
By 2028, organisations that leverage MSPs’ GenAI for SAM will realise 25% more cost reduction and improve data accuracy by 50%, Gartner said.
SAM managed services are most used by EMEA organisations, in terms of revenue and number of clients, the analyst noted.
In its press release trumpeting its success, Crayon claimed it recently assisted a healthcare industry client in achieving $500,000 in VMware savings following its acquisition by Broadcom.
“We are honoured to be recognised as a Leader in the Gartner Magic Quadrant once again,” stated Crayon CEO Melissa Mulholland.
“We believe this prestigious distinction reflects our team’s unwavering dedication and expertise in delivering consistent, industry-leading Software Asset Management services. We remain committed to helping our customers achieve their digital transformation goals with confidence and efficiency.”
“We’re delighted to be recognised as a Leader in SAM Managed Services for the fourth consecutive year,” Lisa Maines, Managing Director at Livingstone Group said in Livingstone’s press release, meanwhile.
As organisations face increased cost pressures and the need to demonstrate ROI, we believe that it’s Livingstone’s commitment to drive outcomes continuously across our clients’ entire client lifecycle, that sets us apart.”
