SOFTWARE LICENSING

Flexera Software Survey Identifies Increased Costs Due to Vendor Audits

By Rory Lidstone, TMCnet Contributing Writer

Most of us don't give a second thought to clicking "I Agree" when faced with a piece of software's terms of service, but for businesses, software licensing terms must be followed to the letter. This is especially true in light of a recent survey from Flexera Software and IDC (News - Alert), which found that software license compliance audits have been frequent over the last year or two.

Such audits are a way for vendors to investigate customers' actual usage of software, allowing them to seek additional compensation, called a "true-up" penalty, if use is discovered that falls outside the licensing terms. According to Flexera's survey, 64 percent of enterprises reported an audit over the last 18-24 months, while larger enterprises with revenue greater than $1 billion were audited three or more times in that same period.

Of those audited, 24 percent said their total true-up for the past year was over $1 million.

Of course, not all of these companies are trying to get away with anything. Usually, the problem lies more with the difficulty of tracking and managing software license use, which therefore makes it difficult to ensure licensing compliance. It's no surprise, then, that one-third of enterprises surveyed were either dissatisfied or very dissatisfied with their current method for managing software licenses and usage.

The most frequent reason for going beyond licensing terms was found to be overuse of applications, with 38 percent of enterprises indicating that 11 percent of their application spending is because of this — up from 26 percent a year ago.

"Software usage that exceeds the negotiated licence terms can represent significant lost revenue for software vendors," said Amy Konary, research vice president of software licensing and provisioning at IDC, in a statement. "There are many factors that make licence compliance difficult, including licence and IT environment complexity, lack of automation and decentralised IT."

Earlier in the month, Flexera Software announced a significant upgrade to App Portal, its application readiness solution, which now boasts integration with FlexNet Manager Suite and AdminStudio Suite. The company was also recently added to the Department of Defense's list of approved providers for IT asset management.