Software Licensing - Are You in Compliance?

By Susan J. Campbell, TMCnet Contributing Editor

Keeping an eye on your software licensing should be a critical priority, given the risk of audit procedures that could uncover improper – or illegal – licensing usage. A Gartner (News - Alert) report surveying audits in 2011 show that about 65 percent of clients had been audited last year.

Who’s auditing the most? It looks like IBM, Adobe, Microsoft, Oracle (News - Alert), and SAP are auditing most often. Not surprisingly, some of these audits involve heated discussions due to the complex issues surrounding how the product is being used and how it is supposed to be used in regard to usage rights and the metrics of software licensing.

According to this Flexera Software blog, keeping tabs on software licensing requires software assessment programs. Gartner recommends companies take this route in its report. SAMs, as they are known, include various processes and the use of monitoring tools to keep companies up to date on their software licensing needs. It’s important to keep in mind that while renewing software licensing is expensive, so is being audited and fined for being out of compliance.

One problem with software licensing is that the process is becoming more and more difficult to monitor due to the complexity of the licensing agreements. Companies often engage in intricate volume purchases and must comply with a number of difficult licensing metrics, making the process of managing software licensing nothing short of a challenge.

At the same time, there is a general lack of communication between IT procurement and IT operations that can pose problems for companies. Product use rights, which can change on a dime, also make it hard for companies who have embraced virtualization and roaming practices.

One quick way around these confounding issues regarding software licensing can be found in tools that offer license transparency and keep you up to date on the agreements and product use rights. If you don’t want surprises, achieve transparency first with the tools that keep you current.

The Gartner report stresses that the personnel who are deeply involved in deploying and managing the software are very often not in charge of licensing – it’s not in their realm of expertise. Therefore, it’s easy to see how these software-licensing agreements get overlooked and audits turn up discrepancies that come as a shock to management. Developing a system of checks and balances that put all licensing agreements in a central location can greatly reduce mistakes.

What is making an impact in an area where IT environment changes have caused some headaches is an analysis tool that can tell you how using various forms of software on various hardware devices can affect the licensing agreement. With these tools, you know up front if you’re in compliance and you take out the guess work that can lead to non-compliance issues later.