SOFTWARE LICENSING

Flexera Software: Software License Compliance Audits are Contributing to Organizations' Cost and Risk Exposure

By Mandira Srivastava, TMCnet Contributor

In today’s evolving business environment, achieving software license compliance is a daunting task.

However, enterprises should be aware of and control the business risks associated with failing to comply with license terms and issues obtained from using unauthorized software.

You should know that you can place a software provider audit request anytime.

Recently, Flexera Software, in collaboration with IDC (News - Alert), performed a survey on software pricing and licensing. The 2012 Software Pricing and Licensing Survey details vendor audit practices and resulting unbudgeted "true-up" penalties companies must pay.

The survey reveals that one third of enterprises surveyed said they are either dissatisfied or very dissatisfied with their current method for managing software licenses and usage.

According to survey, 38 percent of enterprises indicated that 11percent or more of their application spend is associated with applications that are overused, and therefore out of compliance, up from 26 percent one year ago.

The survey shows that vendors are exercising their rights to recapture some of that revenue leakage due to noncompliance via software audits and true-ups.

Amy Konary, research vice president - software licensing and provisioning at IDC, said in a statement, “Software usage that exceeds the negotiated license terms can represent significant lost revenue for software vendors. There are many factors that make license compliance difficult, including license and IT environment complexity, lack of automation, and decentralized IT. IDC expects that vendors will continue to enforce their license agreements with audits, and advises enterprises to pro-actively track and manage usage of their software license assets."

In addition, the survey revealed that the major software vendors - those that typically account for a significant portion of most organizations enterprise application spend - are also the most aggressive auditors.

Randy Littleson, senior vice president of Marketing at Flexera Software said, "If existing license management strategies aren't significantly reducing or eliminating painful software true up penalties - optimizing the software license estate often eliminates or significantly reduces that risk exposure."

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