Understanding Software Licensing Audits

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You may be surprised to find out that the companies like Microsoft and IBM are closely monitoring and auditing the usage of their software. Why do they care!? Well in recent years the suffering economy has resulted in a reduced number of businesses investing in new software; hence the clamp down on software piracy. Vendors are looking to identify all forms of license violations; ensuring current customers are compliant is potentially easier than finding new customers.

 

If you receive an audit request from a vendor or trade organisation then they might have good reason to believe you have, whether intentionally or not, broken licensing regulation. If you are found to have a mismanaged licence then you can expect to face financial penalties and/or restrictions.

 

Evaluating the risks, recent findings from the BSA suggest that “30% of UK small businesses have knowingly used too few licences for the number of users or are purposely using the wrong kind of licences for their organisation.”

 

There are many reasons why businesses may be mismanaging licenses; these can range from saving money or simply a lack of education. Vendors know that software management is not a top priority for SME’s and without the correct tools to manage software licenses, businesses can easily lose track of their software estate. Book keeping errors and employees downloading software are two areas that can give Software Asset Managers a real headache.

 

For businesses who want to be proactive and ensure they‘re compliant with licensing laws, it would be wise to identify some software asset management software (SAM) to manage your company’s licenses. Organisations can often be put off from investing in SAM as the cost can often at first glance seem high, but it might surprise them to hear that SAM software is likely to save businesses money in the long run. Identifying and managing your software estate gives companies an insight of any existing and outstanding licenses currently active within the business. This can be a powerful money saving tool, as not only can businesses make sure they have the correct number of licenses but also identify the optimum times to invest in new licenses. Knowing in advance when to buy licenses and how many need purchasing can give managers the perfect bargaining tools for purchasing new software licenses.

 

If your company fails to meet the software regulations and you receive the dreaded letter from the software vendor demanding an audit, it’s important that you seek advice from software management experts immediately. As stated previously, businesses can expect to face hefty fines if they are found to be non-compliant.

 

A good example of this is when a building services engineering company based in Lancashire was hit with a £10,000 penalty for using unlicensed software. This proves that the BSA is not forgetting about SME’s and failure to meet tough regulations can also close businesses and damage a brand’s reputation.

 

For those businesses previously or currently going through a merger or acquisition, it has been highlighted that they might be more susceptible to a software audit in 2013; 37% of companies admitted to either inheriting or possibly inheriting unlicensed software as a result of failing to follow due diligence during an acquisition.

Guru

+Ayodhyanath Guru holds a B.Tech degree in Electrical Engineering and has worked with various prestigious clients in the IT industry and presently working as a Software Engineer. He is a part time blogger and presently authors the Jafaloo.Com blog. Being a tech enthusiast Guru likes to surf the web and blogs about interesting technical topics like How-To guides, freewares, Tutorials, Software, Gadgets, web applications etc. Apart from blogging he likes coding in Java/J2EE and PHP.

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