Why ITAM Is Failing: Cloud Complexity Is Outpacing Traditional IT Asset Management

The 2025 State of ITAM report reveals some major struggles for IT teams and provides suggestions on how to overcome them.

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Sean Michael Kerner , Contributor

June 30, 2025

4 Min Read

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IT asset management (ITAM) sits at the intersection of technology operations, financial accountability, and compliance risk. ITAM teams track hardware lifecycles, manage software licenses, ensure audit readiness, and increasingly work to optimize cloud spend . When ITAM works well, IT organizations avoid compliance violations, eliminate redundant purchases, and maintain clear visibility into their technology investments.

But ITAM is breaking down under cloud complexity. That's one of the key findings from Flexera's 2025 State of ITAM Report , which is based on a survey of 506 global IT professionals.

Key Findings From the 2025 State of ITAM Report

Key findings from the report include the following:

Visibility Crisis: Complete technology stack visibility dropped from 47% to 43% year-over-year.
SaaS Waste Acceleration: 35% of organizations report increased software-as-a-service (SaaS) waste despite cost pressures.
Software Use Rights Emergency: Managing software use rights jumped from 6th to 1st place as the top Software Asset Management (SAM) concern.
Massive Audit Costs: 45% of organizations spent over 1ドル million on software audits in three years.

Among these findings, the most surprising one reveals a fundamental organizational shift.

"The biggest surprise was the amount of FinOps professionals responsible for generating software savings in the cloud," Phil Perfetti, senior product marketing manager at Flexera, told ITPro Today. "This is traditionally more of an ITAM practice, but as FinOps responsibilities have been evolving, software in the cloud is starting to become an overlapping priority. Thirty-two percent of organizations reported it is the FinOps team, not the ITAM/SAM teams, responsible for generating these savings."

How ITAM and FinOps Can Work Together

Traditional team boundaries are collapsing as cloud workloads demand unified oversight. The technical reality forces collaboration.

Perfetti noted that the State of ITAM Report shows the collaboration between ITAM and FinOps teams has increased 6 percentage points year over year. This likely has a lot to do with the increase in workloads moving to the cloud and significant interactions amongst teams, he said.

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Successful collaboration between ITAM and FinOps involves both teams working together to understand licenses and cloud bills.

"Neither ITAM nor FinOps teams should be deploying cloud instances without the other knowing what's going on," Perfetti said.

In his view, if ITAM teams deploy on their own, it could add to the overall cloud infrastructure costs that could hurt FinOps objectives. If FinOps teams do this, they could be deploying cloud software when they could utilize licenses the organization already owns, effectively paying double for software.

"We have seen good outcomes in some customers who work together to understand how spending is happening," Perfetti said. "Having visibility to cloud licenses and their costs can help bridge that understanding. Then teams can adjust policies knowing the business impact."

Cloud Licensing: A Technical Nightmare

Cloud infrastructure has introduced licensing complexities that break traditional ITAM approaches. The technical challenges are hitting organizations from multiple angles.

Dynamic Scaling Breaks License Tracking: Cloud instances scale up and down rapidly. This creates licensing chaos.

"One week you could have lots of cloud instances utilizing software licenses, and the next week you could have close to zero utilizing the same licenses," Perfetti noted. "Depending on how often you are scanning your environment, you could be way off on your licensing estimates."

PAYG vs. BYOL Decision Paralysis: Teams struggle with pay-as-you-go (PAYG) versus bring-your-own-license (BYOL) models. PAYG works for short-term usage, but costs spiral for sustained workloads. BYOL saves money but requires active management to avoid compliance violations.

Inventory Agents Don't Work: Traditional inventory agents aren't installed on ephemeral cloud instances. This creates massive data gaps. "Most companies don't bother installing traditional inventory agents on them," Perfetti explained. "This means you're not getting accurate data on the software that is being utilized."

vCore Licensing Bombs: Cloud-native metrics create instant licensing changes. A SQL Server instance scaling from 12 vCores to 64 vCores automatically adjusts PAYG licensing. But BYOL deployments require manual intervention. Miss this change? Compliance violation.

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How to Minimize SaaS Waste

Another key area of concern that the report highlights is SaaS waste. SaaS waste occurs when organizations pay for software subscriptions they're not fully utilizing. The report found that35% of organizations reported increased SaaS waste despite cost pressure.

There are, however, some steps organizations can take to minimize SaaS waste.

"To regain control over SaaS sprawl , organizations can establish a SaaS governance framework that is lightweight and not restrictive," Perfetti said. "This involves creating guidelines rather than roadblocks, defining who can purchase SaaS and under what conditions, and introducing a transparent and collaborative SaaS intake process."

He also suggests that organizations implement SaaS discovery and management tools. Using those tools will enable organizations to fully inventory existing SaaS apps and understand their usage to determine the waste.

"Organizations can centralize procurement for core SaaS apps, consolidate enterprise-wide contracts, and implement SaaS rationalization to identify and address redundant or underused apps, all while engaging business stakeholders to ensure that critical tools remain available to teams that depend on them," Perfetti said.