Understand your software license data to ensure you are reporting correctly

License Manager - Understand your software license data to ensure you are reporting correctly - License DashboardA software license comes in a multitude of forms and from a multitude of suppliers. Proving your entitlement to use this software and understanding the license granted is key to drawing a license compliance position. From Original Equipment Manufacturer licenses (OEM) granted with a hardware purchase, through to Full Packaged Product (FPP) and Site licenses. When confronted with a vendor audit you will need to have a good understanding of your license entitlement, not just in terms of the quantity of licenses you are authorised to use, but also the terms and conditions around the use of those licenses.

The devil’s in the detail

Software purchased in volume, via a standard volume agreement or by a distinct contract is the usual procurement method seen within most larger sized organisations. Deployment of the software is often determined to understand compliance, but is the software actually being used as per the terms of the contract as well? It is this detail that often leads to non-compliance, despite a customer’s best intentions to use the software to the letter of the agreement. For example, there can be specifics around the named legal entity using the software, the country of use and whether 3rd parties can use the software on behalf of the licensee. Vendors can also write into a contract different meanings around licensing metrics which are standard across other vendors. A User based license could be exactly that for one vendor, but based on an FTE count for another. Virtualization of the product may be allowed, but there may be another set of terms of use if deployed in this way – some vendors allowing you to deploy their software within an environment only based on virtualization technologies they consider hard partitioning and if deployed within an environment using unrecognised virtualization methods you may be subject to additional license requirements. Other conditions around server licensing are also often defined and could tie the software to a specific machine or perhaps to a server with a limited capacity. The list goes on.

Where you’ve maintained a license and the terms of use of that license have changed over time, which terms apply now? If your contract ties to URLs which have been updated then the URL terms are likely to take precedence. If you have paid continued support fees on your license and your contract has no clause around updated terms superseding your terms, then it’s likely that your contract prevails.

FPP licenses (aka shrink wrapped software) and also software downloaded via the web, is generally governed by a standard end user license agreement and seen more frequently within small and medium sized enterprises. However, if your install base is dated or has been upgraded it is likely that this license type is in place or could be required. Vendors have typically improved their licensing records over the years, but software purchased some time ago, or via a reseller, could be missing from their records and therefore from any audit position delivered. Not only is it then important to prove your purchase, but it is also important if your more current software licenses have been purchased as upgrades to these older licenses. Without proof of a base license your upgrade license may not be valid. Proof of purchase in some cases will be the packaging of the product itself, which includes the certificate of authentication / license agreement.

Software as a Service must be managed

Utilizing Software as a Service (SaaS) may be seen as a way around having to manage your software to such a level, but actually this type of contract still requires you to ensure that the agreement signed is fit for purpose and you understand and abide by the type of use permitted. A vendor will not necessarily exclude this software from an audit scope due to it being hosted elsewhere.

A central repository for software licensing data

Preparation is key when it comes to a software vendor audit. Proof of a software license purchase is often as simple as an email confirmation from the vendor, but can be as complex as a master agreement with subsequent addendums and appendices spanning multiple countries. It is this complete set of information that you need when being audited, without it you do not have the full picture. License Manager, License Dashboard’s software management solution, can be used as a central repository for this data, or simply to reflect quantities of entitlement. Rules can be set around how a license can be utilized within License Manager (which helps managing the intricacies of some software). Reconciling your deployment data / usage within License Manager can then be governed more easily. Processes to manage this information are becoming part of an ongoing software asset management program for most companies, however should you need any help or wish to discuss utilizing License Manager, please get in touch.

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Ben Eagling

Ben Eagling

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