In 2024, CIOs and CFOs across the Middle East faced growing pressure to reduce IT costs while maintaining audit compliance and supporting cloud transformations. Our latest benchmark study, covering Banking, Oil & Gas, Government, and Healthcare sectors, reveals the top five areas where organizations consistently lose value due to software asset mismanagement. This report outlines key insights, quantified impacts, and practical mitigation strategies.

1. Over-Subscription of SaaS and Cloud Services

Average Annual Waste: $1.3M per enterprise

Organizations continue to purchase more cloud-based licenses (Microsoft 365, Salesforce, Zoom, ServiceNow) than necessary. Often, 25–40% of users hold licenses with premium features they never use.

Key Contributors:

• Lack of usage-based license rightsizing
• Decentralized SaaS procurement
• Auto-renewals without review

Mitigation:

• Implement SaaS usage analytics
• Automate license reallocation and downgrade
• Centralize contract control

2. Unused On-Premise Licenses and Shelfware

Average Identified Reclaim Value: $2.1M

Despite the shift to cloud, legacy licenses remain a major cost center. Shelfware is particularly common for Oracle, IBM, Micro Focus, and engineering software.

Key Contributors:

• Cloud migration without reclaiming on-prem assets
• Poor inventory normalization
• No regular Effective License Position (ELP) assessments

Mitigation:

• Conduct quarterly license consumption reviews
• Align contract usage with infrastructure roadmaps
• Use automated discovery and normalization tools

3. Unoptimized Hybrid Cloud Models (e.g., HPE GreenLake)

Missed Optimization Potential: 18–25% of contract value

As organizations adopt consumption-based models like GreenLake, many overpay for resources misaligned with actual workloads.

Key Contributors:

• Over-provisioning due to inaccurate forecasting
• Misalignment between procurement and IT operations
• Lack of real-time consumption dashboards

Mitigation:

• Integrate ITAM with hybrid cloud billing data
• Forecast consumption based on usage trends
• Conduct monthly contract vs. usage reviews

4. Vendor Audit Penalties and Compliance Exposure

Average Risk Exposure per Audit: $3.6M

Enterprises in the Middle East are frequent audit targets, especially by Oracle, Microsoft, and SAP. Without a defensible ELP, they often face unplanned payouts or penalties.

Key Contributors:

• Incomplete entitlement records
• Uncontrolled virtual environments (VM sprawl)
• No audit defense readiness

Mitigation:

• Maintain real-time license positions
• Conduct mock audits and true-up simulations
• Implement audit response playbooks

5. Siloed Asset and Financial Data

Impact: Up to 20% in lost optimization opportunities

Disconnected data between IT, procurement, and finance leads to poor SAM outcomes and missed cross-functional insights.

Key Contributors:

• Lack of integration between SAM, CMDB, ERP, and procurement systems
• Inconsistent asset lifecycle tracking
• Manual data entry and reporting

Mitigation:

• Integrate SAM platforms (e.g., Flexera, Snow) with ITSM and ERP
• Build a unified data model for license and contract visibility
• Automate reporting with role-based dashboards

Conclusion The cost of ineffective SAM extends beyond compliance, it impacts budgets, digital agility, and audit resilience. Enterprises in the Middle East can recover millions by embedding data-driven, proactive SAM practices into their IT and procurement operations. The time to act is now.

For a detailed SAM cost recovery assessment or to request a workshop, contact us at siddharth@connor-consulting.com.

Disclaimer: These figures are indicative and based on Connor’s client experiences. They should not be treated as market benchmarks.

‍