One reason strict software license compliance through asset management in business is rare is that, unlike consumer software publishers, many enterprise software publishers have more of an “honor system” mentality when it comes to unlocking their software.
There are very big software vendors that make it remarkably easy for people to download and install software whether they’ve licensed it or not.
Toss in varying licensing terms related to “per-CPU” or virtualization, or business roles, and even the most battle-hardened administrator can be completely baffled. So how can you avoid problems with software licenses, including problems revealed during a dreaded software audit? First think about how installs and licenses can get so out of sync.
How Software Purchases and Software Usage Get Out of Whack
No organization wants to pay high costs for software only to find nobody likes it or it doesn’t work well. “Shelfware” has a long history of shame attached to it. But at least with shelfware, you’ve bought the license(s), so you should be OK during an audit.
Sometimes organizations license software and actually install it, but no one ever uses it. The company may not know this is happening, because it doesn’t track usage. Still, you should be OK in an audit.
One of the biggest changes wrought by the cloud is that much software buying has moved outside the IT department. When multiple departments buy SaaS seats with their departmental budgets, but don’t communicate about it, you can say goodbye to volume-based discounts, because nobody knows they’re eligible.
And then there’s the problem of downloading and using software without buying the license for it. In a big organization, this can be a big problem, and if there’s a software license audit, ouch.
Audits: Let’s Be Fair
It’s not like audits are a surprising concept. Companies spend huge amounts of money developing extremely valuable software, and it’s only fair that they’re paid accordingly. Plus, software contracts spell out audit rights clearly (more or less), and software makers generally reserve the right to run scripts on your network to uncover unauthorized software. If they find it, you have to pay for it. Audits rarely turn out in favor of the customer, and the cost of a failed audit can run into the millions for big companies. But you really can’t be shocked that software companies want customers to pay for their products.
Know Where You Are So You’ll Know Where You’re Going
The first step to avoiding problems with audits can be painful, and that’s knowing what software your organization has purchased, what software it uses, and the discrepancies between those two lists. The value of this step can be huge to the typical business. First, you have to collect various forms of proof of ownership, which might include purchase orders, paid invoices, receipts, purchasing contracts, and license certificates. It may involve digging through file cabinets, and won’t be pretty.
Your Salvation: IT Asset Management
Trying to reconcile the software you bought with the software you use with sticky notes or spreadsheets is a losing proposition, even for a small company. IT asset management is the key to squaring licenses with instances of running software, because those software licenses are valuable IT assets and you need to manage and track them. Your IT asset management solution should allow you to put all those purchase orders, invoices, receipts, etc. into one repository so you can reference them at any time. It should track and monitor contracts and licenses and alert you when a gap shows up or a license is near expiration.
Software Is Necessary but So is Strategy
Great IT asset management software is essential to avoiding licensing problems, but your organization also needs a clear purchasing strategy that lets you take advantage of levers like volume discounts, and this requires that purchasing silos be broken down. If together, Engineering and Finance are purchasing enough licenses for a volume discount, you need to know, so you can group the purchases. You also need a policy addressing rogue purchasing and downloading. Some IT asset management solutions can monitor your network and alert you when something new is installed, so you can meet these problems head-on.
About Nathan Riley
Nathan Riley is a Sales Director, ITSM at SolarWinds. He has nine years experience in the industry, and has had a front row seat for the evolution of service management as a platform for the entire organization. He helps organizations ranging from SMB to Fortune 500 bring customized service to employees. Nathan proudly served the United States Armed Forces in the United States Marine Corps.
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