Reading Terms and Conditions

It’s been all over industry news this week but in case you missed it, the court date has been set for the ongoing conflict between Oracle and Google.

In 2012 the companies went to trial over Google’s use of Java in Android, with the jury finding that Google had infringed Oracle’s copyrights – although, they were split as to whether Google was covered by a “fair use” policy. This was a small win for Oracle, but now it is back to the beginning of a new trial to understand whether Google will pay the $9.3bn that Oracle claim they owe.

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Right as this story was brought to my attention, so was a piece of Gartner’s research: Software Terms and Conditions Change Without Notice – How best to Protect Your Organization. Now, I don’t think these are connected – I don’t think Oracle changed licensing rules and that Google was unaware of the implications of said changes – but I did start thinking about just how important remaining compliant really is, and how keeping an eye on changes to your licensing policy falls within that.

Software Asset Management and staying on top of licensing rules

We (as the SAM industry) always talk about staying on top of licensing rules but what does that actually mean?

Unless otherwise stated in the contract, software providers have no legal obligation to provide notification of any changes to terms and conditions. In fact, many vendors will stipulate that they have the right to revise the terms and conditions at any time, without notice. This means it is the end user’s responsibility to ensure they are abiding by the contract’s rules through the duration of the contract, whatever those rules may be.

Prior to signing a contract (when you have the most leverage) you can always request that as part of your agreement, the vendor has to notify you of any changes to the terms and conditions within a specific time frame. If this is successfully added to your contract, you should then have time to prepare for those changes to ensure you continue to abide by the rules. It also allows you to search for an alternative provider should that be necessary.

Once a contract has been signed, all terms and conditions have been legally agreed to. These days, a lot of terms and conditions have URL links within them, offering further information and policy documents. Therefore, when you agree on a contract, you also agree on all of the detail included in these URLs. It is your responsibility to check these regularly for any alterations. As an example, Oracle states:

“URLs: It is your responsibility to regularly monitor all applicable URLs on a regular basis so that you are aware of any amendments Oracle may make to those policies from time to time.”

How regularly should I “regularly monitor”?

To use Oracle asMonitoring an example again; their core factor table changed eight times from 2014 to 2015, and customers were not formally notified at any time, nor were those changes posted to the linking URL within the contract.

Eight times. Vigilance is key in spotting changes to terms and conditions, and so I would recommend documenting their original state when the contract was first agreed, and then comparing them every quarter with the up-to-date URLs. This way you are fully aware of any changes made and can calcula
te the impact they may have on your usage and compliance state.

Unfortunately, it’s extremely difficult to pinpoint which terms are likely change, so budgeting for it can be hard. Being organized is paramount in avoiding large fines for a breach of contract, but if changes to terms are made that you’re unaware of, and a vendor decides to audit, you could end up in a situation in which your annual budget is jeopardized along with any plans your organization had for expanding or upgrading technology.

The extreme case of Google

Although the next few months for Google are a pretty extreme case, the story serves as a stark reminder of what can happen when an organization fails to adhere to a software agreement. There is no way your organization would want to be facing anything similar to what’s coming up for Google in May!

Software providers will change licensing rules, and that can expose your organization to high, unbudgeted costs and non-compliance. Stay on top of the changes or talk to a third party that can assist you in doing so.

Ben Eagling

Ben Eagling

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