How to master the art of software licensing

Coming to terms with software licensing takes time and resources. But failing to ensure software is properly licensed can lead to penalties and excessive software costs, finds Stephen Pritchard in our latest Business of IT special feature.

By Stephen Pritchard, 29 Sep 2010 at 17:29

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For IT departments, managing software licences is a chore. But like any housekeeping task, neglect it for too long, and conditions can become quite unpleasant. The easiest way to look after licences is to carry out regular cleaning and maintenance.

A report published earlier this year by analyst firm IDC and the Software Industry Research Board found that as many as 91 per cent of UK businesses needed to do more to manage their software. Those that did do so, however, saw their software costs fall by 20 per cent.

Software licensing poses a twofold challenge for IT managers. Under licensing raises the risk of facing fines, penalties or higher support costs from vendors. Vendors, as well as organisations such as the Business Software Alliance (BSA), can ask businesses to complete software audits. If the organisations do not comply, then the vendor or its representatives can apply for a court order.

According to the Federation Against Software Theft (FAST), an anti-piracy body, the number of software audits is now almost double the level of 2008-09, with 55 per cent of companies saying they had been subject to an audit. There is also the possibility of companies that fail to comply being prosecuted by Trading Standards departments.

The number of cases brought against businesses for using unlicensed software – as opposed against people who make or distribute pirated software applications – is still relatively small. In most cases, a software publisher will aim to settle with a company out of court.

But with the growth in legitimate online downloads of "trial" software, as well as illegal torrent sites, it is becoming harder for companies to control their software licence use.

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1 comments

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Unbiased research and shortsighted "solutions"

Since when does the BSA have the right to obtain a court order to demand a company conduct an expensive and time-consuming software audit? The recent ACS: Law palaver has shown that some evidence must be presented to a judge, to grant an NPO for the release of customer details from an ISP. How on earth does the BSA (a non-statutory organisation) obtain a court order forcing a company to do anything? Can you supply evidence of it actually having done so, on the sole basis of "we invited company x to participate in an expensive and time-consuming operation. Its declination to do so surely implies guilt". I don't beleive so.

And the SIRB - are they unbiased, or do they have a connection with BSA/FAST?software industry? The suggestion that "cloud computing" is a universal panacea is ludicrous. Firstly, it assumes that every business has sufficient bandwidth to do so - not the case in broadband-strapped England, even in the major cities. And thats even before we consider the implication of "capping", and the gradual decreases in monthly limits. Secondly, broadband is NOT a guaranteed medium. It would introduce a massive single point of failure into any organisation, and for a small business could well be fatal. Imagine losing connectivity to your cloud when company accounts are due? Or the service provider folds, or worse the data centre is frozen by law-enforcement - a not unknown occurence.

The upshot is software licensing should become more transparent and easier; look at Windows Server, where you need a licence for the OS, a licence for the desktop OS, and a client licence; to enable one employee to work the company needs three licences. And thats before considering applications, whether the user is using a desktop or laptop, and so on. And much like the entertainment industry, rather than sort their own act and change their business model to reflect current times, they find it easier to cry foul at the customer base.

By alewis on Sunday Oct 10