Featured Article from Software Licensing

The Best Way to Handle a Software Licensing Audit

October 11, 2016




Have you been able to dodge the software audit bullet up until now? Software vendors tend to target some of their bigger clients in an effort to reign in those operating outside of the parameters of the software licensing agreement. It can seem egregious, especially when a vendor asks for your data, access to your systems or even some form of verification of the extent of your organization’s use of that software.

But you agreed to the process when you bought the software. The provider simply wants to ensure that there aren’t additional monies due – monies they have a right to collect if you’re operating outside of your software licensing agreement. The good news is you don’t have to be caught unaware and the compliance audit can be a painless process, if you’re doing things by the book.

A recent Lexology post offers some critical tips to consider if you hope to reduce your software compliance risk. The first and perhaps most important thing to remember is to respond to a request for an audit in the appropriate way and manage it correctly. A failure to do so could put you in a situation where your software vendor opts to leverage complex licensing terms, changes to your IT architecture, off-the-cuff statements by IT professionals and more to create software licensing violations that result in payments that are much higher than they need to be. In other words – don’t try to play hardball or you could wind up face down on home plate.

Instead, respond accordingly and consider using a straightforward approach to the audit so you can keep it short and sweet, and hopefully low-cost. One of the best things you can do to prepare for the inevitable audit is to gather and review licenses and contracts now, counting licenses and software deployments. Then, be aware of any potential sources of unexpected exposure that is typically the result of well-intentions changes to your IT architecture.

Finally, always be leery of any free services or consultants that are offered by vendors. The audit may be disguised as free, but the organization conducting the audit has to be paid somehow. They are generally getting their fee from the due payments they uncover in your audit. The best way to ensure there aren’t any is to do your own before the software provider arrives. Then, once they have done their due diligence, compare notes and see how well you have prepared. Even if you owe money, at least you know the process was done right and you’re getting what you paid for. 




Edited by Maurice Nagle
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