- You may not be worried about software licensing gaps; however, based on our experience, consider the following:
Many companies think their software licensing is in compliance, but they are unaware they have a problem. Rarely, if ever, is a true licensing assessment undertaken until an audit is underway; yet that is the worst time to find out about issues. Take, for example, when Nike execs received a bill for $15.6M from Quest for non-compliance (www.itassetmanagement.net/2018/06/21/nike-hit-back-at-quest/), or the $600M licensing issue that came up between SAP and AB InBev (www.cio.com/article/3263717/sap-settles-licensing-dispute-with-ab-inbev.html).
Customers often think they have a partnership with a software vendor, and that they can talk their way out of a licensing gap, or that a settlement will be fair and reasonable. You can negotiate, of course; however, the publisher’s detailed assessment of your non-compliance can lead to a bill that is shocking. The risk exposure often exceeds the amount the company has paid the publisher over the previous decade. In some situations, the penalty will far exceed the cost of the software license itself.
Purchasing a software asset tool can create a false sense of security. Even if these products work perfectly, they function primarily as intelligent reporting tools. Rarely will they keep you from becoming non-compliant. For example, in a recent case study where there was a robust tool and a competent team using it, the tool allowed a $17M gap to go unnoticed. It could not recognize the subtle differences between some of the products deployed.
Original forms of contracts and documents around licensing are written by and to the benefit of publishers. They are crafted to protect vendors’ intellectual property. It should not come as a surprise that these contracts are not designed to protect end users. Arguments based on what a sales rep told the customer during the sales cycle really don’t matter. What matters is what can be documented and proven.
It is very difficult for customers to have the requisite skills to keep their licensing in compliance. Moreover, preparing successfully for audits means being ready to work with expert teams from or hired by all of the publishers used by your company. It makes good business sense for you to level the playing field by hiring professionals with licensing expertise to solve problems before audits, optimize licensing to prevent overspending and minimize business risk, and support your team before and during the audit process.
For additional information on how to reduce your risk go to www.CanyonConsulting.com
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