Software Licensing Featured Articles

Don't Let Audits Ruin a Good Thing

By Mae Kowalke, TMCnet Contributor

Software is a key competitive driver for businesses that outperform the market, as evidenced by a recent IBM (News - Alert) Global C-Suite Study that found 56 percent of CEOs for outperforming organizations planned to focus on emerging technology in the next three years as a strategic priority.

Yet licensing audits can serve as a major drag on businesses, lessening the benefits of information technology.

The average true-up cost for organizations with greater than $100 Million in annual revenue was $.0004 X annual revenue, according to a 2014 IDC (News - Alert)/Flexera study. That’s $400,000 per billion of organizational revenue, a not insignificant sum.

“Beyond the financial impact of these unplanned expenditures, the level of effort involved in responding to audits across the organization takes the focus of the IT organization away from their more strategic projects,” noted a Flexera Software blog post.

Audits create adversarial relationships between enterprises and their software vendors, too, and enterprises end up paying for software they aren’t properly using as a result of many audits.

The IDC/Flexera study found that Microsoft is a particularly large auditor, with 58 percent of those who were audited saying Microsoft was the one auditing them. Adobe, IBM and Oracle (News - Alert) also were aggressive in their audit volume according to the study.

The solution, of course, is having a better grasp on software use within the enterprise, something that is particularly important with the increasing number of software licensing schemes in use today thanks to cloud computing and virtualization.

“Software License Optimization puts the organization in a stronger position to have fact-based discussions with vendor partners supported by actual software usage data,” noted the Flexera blog. “Both organizations can work to achieve better business value using the software the enterprise already owns, as well as adapt the software portfolio to align with the IT strategy.”

Aligning the objectives of the enterprise and software vendors is good for everyone.