How to Perform your Annual Microsoft Software License Audit
The rate of software audits continues to rise. Hardly surprising when you understand that it’s a means of generating revenue for software vendors. In a straw poll we conducted at License Dashboard, we found that 67% of organisation had received a software audit within the last 12 months, and that 16% had received three or more audit requests in the last 12 months. Basically, if you haven’t received a software audit request form your major software vendor, you’re likely to within the next year.
More specifically, business software from Microsoft is present in many organizations worldwide, and as such is now one of the most rigorous of the software vendors in terms of license auditing. 67% of businesses that were audited within the previous two years reported Microsoft as being the auditors.
What prompts a Microsoft Software Audit?
With Microsoft standing to profit from non-compliance, there really isn’t any one reason your organization would receive an audit request, however there are some situations or events that could mean you’re more likely to receive a notice:
- Business Growth: it stands to reason that if revenue increases, or your company expands, it could lead to a change in licensing compliance. Your Microsoft Account Manager will likely be on the lookout for this kind of activity.
- Licensing History: if your organization’s rate of purchase drops, and your agreement doesn’t require annual True-Ups, it raises questions around how your organization is remaining compliant. Again, your Account Manager will be aware of this.
- Tech Evolution: virtual desktops, BYOD and moving to the cloud make already complex licensing terms even more challenging. Microsoft are under no obligation to provide support in terms of licensing in this area, but do offer agreements that cover these circumstances.
Receiving a Microsoft Audit Request
Microsoft will likely be working with a third-party auditor. If the request comes over the phone, or via email, request it be sent officially in writing. Once the written request is received, ensure it is acknowledged, and take control by offering a timescale and project plan. Then:
- Assign a team and establish a single point of contact for the auditor and for Microsoft
- Insist that a Non-Disclosure Agreement (NDA) be signed between you, the auditor and Microsoft to ensure data is safeguarded (SME only)
- Agree the proposed timeline and then start gathering your data. This will depend on your IT Team, the SAM process you do (or don’t) have in-house and available resources
- Bring together your Microsoft software licenses. This can be challenging if licenses have been gathered steadily over the years and are not managed in a central repository, but this central repository is essential in answering any license audit request from any vendor
- Reconcile license against actual usage. A good license management solution should be able to intelligently apply license terms that span multiple products or cover varying usage rights. If this doesn’t exist in your organization, it is likely to be a time-consuming manual task
- Larger Enterprises will need to submit an Effective Licensing Position (ELP) to the auditor. It may take a couple of attempts before you’re ready to hand over the results of your audit, a knee-jerk reaction to under- or over-compliance could lead to costly mistakes being made
How to prevent a Microsoft Software Audit
Impossible! However, as tempting as it might be to sit back after completing an audit, it would be far wiser to use the hard work already undertaken for a Microsoft audit and build on it. That way, you’re prepared for your next audit, no matter who the vendor is.
Invest time in creating a dedicated, ongoing software license management program so not only are you in a position to quickly and confidently respond to future requests, but you’re also a less attractive (or rather, less profitable!) target in the future. Assuming that you have had to make additional purchases of Microsoft licenses (and that is, unfortunately, a likelihood), you will now be on their radar – it makes sense to regularly update and maintain your license management program. The benefits of this will go beyond compliance, as it will also highlight where your organization can save money in re-harvesting licenses. Win-win.