Software Audits: Managing Software Costs Critical for Today’s Small Businesses
Vincent Smyth, of Flexera Software, talks about the implications of software reviews for smaller enterprises
Software vendor audits are on the rise, not just of large corporates as has been the case historically, but also of smaller organisations. Recently, the Business Software Alliance slapped a £10,000 penalty on a Blackpool-based building services engineering company for using un-licenced software; and a small Germany-based communications firm with just 12 desktops has been informed of an impending audit.
Software audits are not a new phenomenon, but software vendors are taking to this activity with renewed vigour as they look to supplement revenue in an economic climate where new sales are not as easy to come by. IT research & advisory company Gartner’s figures show that software vendor audits are up from 61% to 65% in the last year. Forrester too is seeing a steady increase in calls from enterprises asking for help with software audits.
An Ernst & Young survey of the top software vendors finds that vendors look for inconsistencies in businesses’ past purchasing behaviour to determine the companies that are good audit candidates. SMEs can reduce the risk of audit by adopting continuous software asset management and enterprise licence optimisation processes. Aside from reducing the risk exposure of audits, and providing proof of compliance to software publishers; enterprise licence optimisation facilitates cost savings and better utilisation of IT resources. It enables businesses to understand what software is installed and how the software is actually being used – tying it back to the licence entitlements detailed in the software licence agreements. Companies can potentially save up to 20 per cent of their overall software spend by undertaking enterprise licence optimisation.
Manually undertaking enterprise licence optimisation is impossible given the number and complexity of software vendors’ licence agreements. The lack of standardisation of licensing models across software publishers exacerbates the licensing and compliance challenge.
Further, with virtualisation and cloud computing technologies, the risk of vendor non-compliance is greatly increased as creating new virtual machines running copies of operating systems and software applications can be done with a mouse click. Also, software publishers follow varying licensing rules for virtual environments, significantly adding complexity to the already complicated task of managing software licences. The “bring your own device” to work trend is adding yet another layer of licensing difficulty, especially to the small business community.
Enterprise licence optimisation tools that automate software asset management and licence optimisation procedures to ensure fool-proof compliance are key if small enterprises are to avoid the costs of such audits. They also help eliminate over-buying or under-buying of software and facilitate re-purposing of licences – i.e. re-assigning licences from users who are not using the software, to those who actually need them, saving businesses additional licence purchase costs. During these lean times, managing software costs is critical to any size of organisation, but more so to the small business.