I’d like to share with you all a few things that I have picked up while reviewing white papers and talking to customers regarding Software License Optimization (SLO). In short, Software Vendors are getting more aggressive when it comes to software license audits and if you fail an audit you are opening your company for the same treatment from your other vendors.
Before starting at 1E, I made the assumption that major vendors audited their customers to make sure that their customer base are using the amount of licenses they have paid for, which is fair. However there is an increasing trend highlighted in a recent paper written by the IDC that indicates that vendors are typically seeing non-compliance as an additional revenue stream.
An example of this is, over the past 18 to 24 months 57% of companies that were polled have been audited over that time period with 28% of those companies being audited more than once and 10% being audited more than twice recent IDC figures have revealed.
This example indicates that once your organization has a reputation of non-compliance the hunt will begin for many of the other vendors your organization has brought software from with your organization as the prey.
Larger organizations are being hit the hardest with reports that a third of companies with revenues in excess of $3bn being audited more than three times compared with 3% of companies with less than $100m getting the same treatment. Now although that is an alarming statistic, the cost of being found out is where the red flare goes up. By not being compliant it means that your organization is subject to the cost of the software license audit which could run in excess of $100k and the true up cost also increases because you lose the ability to negotiate your position. The average true up payment for a company of $50m is $263k according to the IDC.
The conclusion that the information above leads me to, is that this situation is only going to get worse. According to the same IDC report Microsoft is the most aggressive vendor currently and if this is a way of getting money in the bank it is fair to assume that other vendors will follow suit.
Gaining the visibility of what is out there and more importantly what is actually being used is a key ingredient in protecting your organization and not spending more than you should.
The good news is that 1E’s AppClarity can help give that visibility and help control your software spend so not only is your company compliant short term but also has the reputation of being a good citizen keeping the wolves from the door longer term.
Should you want to know more, please download our white paper Getting Started on Building Your Vendor Audit Defense Program or contact us at [email protected]