RealTime IT News

Enterprises Face Barrage of Software Audits

The typical enterprise has almost a 70 percent chance of not being in compliance with its software-license agreements, and it has a 60 percent chance of having unlicensed software deployed.

These findings, from a survey of more than 350 IT professionals conducted recently by King Research, aren't just troubling; they could spell big trouble for corporations, as software companies hurt by falling sales due to software piracy seek other sources of revenue.

One avenue will be audits on software license compliance.

When a corporation fails its license-compliance audit, it must delete the unlicensed applications and reinstall new, licensed versions from the software company. It also must pay the vendor for the amount of time it used its software without a license.

According to the Business Software Alliance (BSA), a copyright enforcement and lobbying group for the software industry, the U.S. software industry lost $7.3 billion last year to software piracy, an increase of $400 million from 2006.

The BSA is stepping up its efforts to track licensing violations. In April, it announced that judgments were entered against three U.S. organizations for breach of software-licensing agreements.

One is Coraopolis, Penn. custom computer systems distributor MD of PC, which agreed to pay $36,000 to BSA in April as part of a settlement following a suit filed by BSA members Microsoft, McAfee, Symantec and Adobe in the federal district court in the Western District of Pennsylvania.

MD of PC sold unlicensed copies of software from BSA members, according to the suit.

Stainless-steel plumbing-fixture manufacturer Acorn Engineering Co. in City of Industry, Calif, agreed to pay $250,000 to BSA to settle claims that it had unlicensed copies of Adobe Systems (NASDAQ: ADBE), Autodesk (NASDAQ: ADSK) and Microsoft (NASDAQ: MSFT) software on its computers.

Acorn also agreed to delete all unlicensed copies of software installed on its computers, acquire any necessary replacement licenses and to implement stronger practices for managing software licenses.

Meanwhile, Miller Automotive, a group of automobile dealerships in Van Nuys, Calif., agreed to pay $107,998 to BSA to settle claims it had unlicensed copies of Microsoft and Adobe software on its computers.

Miller had to delete all unlicensed copies of software on its computers and to implement stronger software-license management.


More audits to come

Corporations can expect additional audits, especially as BSA offers rewards of up to $1 million to whistle-blowers.

"Attachmate had a big audit recently, and we're expecting to see more examples of this as long as we're in this recession," Terrence Cosgrove, a Gartner (NYSE: IT) senior analyst, told InternetNews.com.

Many companies will not make the cut: 56 percent of the respondents to the King Research survey said they either track license assignments manually or don't track them at all.

Kace Networks, a maker of Kbox system-management appliances, sponsored the study. The Kbox appliance's module and configuration-management database integrates license compliance with usage metering and management.

"A lot of issues haven't been resolved in terms of how people negotiate license agreements when it comes to virtual machines," Kace CEO Rob Meinhardt told InternetNews.com.

License metering and management not only prevents corporations from being in breach of agreements but also helps save them money.

"You may find you have more licenses than you need, and you can remove those that are not used," Meinhardt said.

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