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Small Business Owner: This is Why Software Licensing Matters

By Steve Anderson, Contributing Writer

For many businesses out there, the story is all too familiar. Software licensing is a difficult to follow and thoroughly nasty process that seems to exist only to suck money out of the already slim coffers of the small business that's just trying to get by. Yes, it can seem that way sometimes, especially when someone starts demanding true-ups and extra fees accordingly, but small and medium-sized enterprises (SMEs) should be taking note of software licensing, and not just for the obvious reasons.

Yes, thwarting the true-up and preventing the extra cash payout that often comes with it when the users exceed licenses is definitely part of the picture, and that will always be a part of it. But for those who have been tempted to download illegal software, there are other risks afoot as well. Numerous high-profile data security breaches have taken place in the last several months, and shown us all how important it is to protect our systems. Illegally downloaded software doesn't come with much of a security promise, so staying away altogether will be the best strategy to help keep a business safe.

But beyond that, there are more constructive reasons afoot than “avoid getting sued” or “avoid data breaches.” Keeping track of licenses can also help make sure employees are staying on the right side of the security concept; a report from IDC (News - Alert) suggests that 20 percent of unlicensed software is downloaded by employees. This forces a company to ask questions like “does everyone have the right tools to do the job at hand,” and if the answers aren't to a business' liking, changes can be made accordingly. This also helps protect companies from lawsuits, as those illegal downloads can be on a company's head.

Software licensing can help keep companies on track when big changes are afoot, like a merger or the like. Keeping track of the appropriate licenses can help spot when another company has a lot of unlicensed software on hand, a move that can sour a merger by adding a new level of liability. It can help manage growth by keeping it at an appropriate level to the amount of licenses available, and help make sure overbuying licenses—getting too many for the number of users on hand—isn't an issue.

While many software providers have started to realize that overly restrictive licenses are invitations to noncompliance and theft, and have made changes accordingly, there's still a lot of value in keeping track of the licenses on hand. Using tools like software asset management systems can be a big help in keeping track, and the value of keeping track has been displayed several times over in preventing not only legal issues, but also security issues.

There's quite a bit of benefit afoot to keeping track of software licenses, so those companies that do so are likely to reap a lot of those dividends firsthand. Keeping track of the numbers helps prevent illegal downloads, holes in the numbers, and potential data breaches later on, so watch those numbers; it may be the thing that saves a business' skin later on.