Why software vendors audit their customers Helpful intelligence

Why software vendors audit their customers Helpful intelligence from License Dashboard Presented by: Matt Fisher, Director

Agenda How did we get here? A short history of software auditing Compliance versus SAM – what is the difference? WHY do software vendors audit end user organizations? HOW do vendors decide who to target? Lessons to learn & next steps

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How did we get here? 30 years since software was commercially ‘sold’ People still believe they ‘buy’ software, not ‘license’ it Licenses come with strict rules and conditions of use End User License Agreement EULA gives the software publisher the right of audit “(e) You agree that xxx may audit your use of the Software for compliance with these terms at any time, upon reasonable notice. In the event that such audit reveals any use of the Software by you other than in full compliance with the terms of this Agreement, you shall reimburse xxx for all reasonable expenses related to such audit in addition to any other liabilities you may incur as a result of such non-compliance.” EULA strongly favours the publisher: Audit at any time with ‘reasonable’ notice Reimburse for all reasonable expenses any other liabilities

How the vendors see things You owe us money! Most organizations are guilty of over-deploying software Most due to negligence, some wilful BSA states 57% of users globally admit to software piracy US – 20%, UK – 27%, Australia – 24% When new license sales drop off Vendors making less new license sales; shareholders want dividends! So where do you turn ? Now a 65% likelihood you will be audited in next 12 months Audit ‘styles’ vary greatly Self-assessment SAM Partner engagement Enforced

Compliance versus SAM “Compliance” now a dirty word SAM often used in its place Restricted to ‘compliance’, SAM is the wrong phrase ‘License Management’ is a better term SAM encompasses: Software Request Approvals Management Policies for license allocation and acquisition Approvals cycle for deployments Monitoring of usage and re-harvesting Tracking and reporting financials of software Some software publishers are invested in SAM, others not!

Why vendors audit customers

How do vendors select targets?

Lessons to learn You are spending too much on software Software accounts for circa 35% of overall IT spend Organizations typically over-spend by 20% Purchasing new licenses when existing ones could be re-deployed Buying outside of volume licensing agreements Failing to crack down on ‘rogue’ purchasing Renewing Support & Maintenance without adjusting for current usage Your software puts you at risk 65% likelihood you will be audited by at least one vendor this year Average audit diverts resources for 3-6 months (& cost up to 500,000) 100% of audits end in some form of payment for under-licensing Software & licensing needs to be “managed”

Be prepared Not just a motto for the scouts Audit is now ‘when’ not ‘if’ Preparation is key: Collate all software licenses into a single location Aggregate and apply ‘intelligence’ to software licenses Monitor software installs and usage Remove unused software before an audit Reconcile usage against entitlement Where shortfall exists, plan to rectify Where over-licensing exists, explore ways to save costs

Coming next How to become a less attractive target Strategies to adopt to reduce the risk of an audit Register Now: July 12th 2012 – 15:00 UK, 16:00 CET, 10:00 EST Register at www.licensedashboard.com How to survive an audit request Minimizing cost, risk and distruption July 19th 2012 – 15:00 UK, 16:00 CET, 10:00 EST Read the white paper View a weekly live solution demonstration

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