Software licences: Why complexity, not deliberate piracy, is the issue

Most organisations do not want to be software pirates: licences are simply too complex to manage. According to the Business Software Alliance’s (BSA) latest annual Global Piracy Study, 57% of global PC users use illegal (pirated) software,...

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Most organisations do not want to be software pirates: licences are simply too complex to manage.

According to the Business Software Alliance’s (BSA) latest annual Global Piracy Study, 57% of global PC users use illegal (pirated) software, amounting to $63.4bn in lost revenue for software companies last year. In the UK the figure is 27% or a cost of £1.2bn.

While the high global figure is largely attributed to growing software sales in emerging markets where software piracy is more widespread, the BSA cites the way we view software - as just another utility rather than a fundamental tool of business - as the more likely reason in more mature markets.

The BSA argues that software piracy by organisations should be dealt with by heavier penalties, such as with stronger damages laws. Yes, organisations should take more responsibility for ensuring they are compliant, but the BSA and its software vendor members must do more to make software licence management easier. Simpler licences and better education is a good place to start.

One of the biggest causes of software piracy that we have found when speaking to customers facing an audit is that software licences are simply too complex to understand. With so much software to manage, organisations simply lose track of their position and unwittingly find themselves to be software pirates. Indeed, they only discover their under-licensed position when the BSA or a major software vendor comes knocking for an audit.

This is where organisations need to be proactive. According to both Gartner and Forrester, organisations are more likely than not to receive a licences audit request from at least one software vendor this year. Depending on which figures you choose to believe, the likelihood is between 55 and 65 per cent, and with more and more vendors increasing the scope and frequency of their software audits, you might be considered lucky to get only one request in the next 12 months.

Proactive management of software licences starts with understanding just how complex licence agreements really are. Organisations simply underestimate just how complicated software licences really are. Software licences come in many shapes and sizes, and vary considerably between each vendor and individual piece of software.

Some are licensed by the number of end-users, others by the number of devices, virtual machines or even processor cores. Some licences never expire, while others are renewed monthly or annually. Some licences offer free upgrades to the latest version of the software during the term of the licence, whereas others offer discounted upgrades or no upgrades at all. All of these nuances are difficult enough to get your head around at the point of purchase, but they are compounded significantly as licence volumes grow over time.

Organisations need to take responsibility for their software by taking the time to understand it. Unfortunately, due to these complexities, this is best left to the experts. Reseller have software experts and software asset management tools to help with this. As already mentioned, the key is being proactive.

Vendors can play their part too by educating their customers on the nuances of their licences and offering help with the task of software asset management (SAM). Most vendors offer or support software inventory tools.

At the same time, they should consider reviewing their licensing policies to find ways of making them more transparent and easier to understand and manage. This is especially true for smaller companies who have less time to manage their software and are less likely to purchase all-you-can-eat Enterprise Agreements so are more exposed to licensing discrepancies.

Organisations should take the time to learn how software licences work, or commission their reseller to manage their licencing estate on a proactive basis. This won’t just keep the BSA and its members happy, but for most organisations, it will lead to cost savings on their software too, as they are able to better able to align their software expenditure with the licences they need.

Sean Robinson, Managing Director, License Dashboard

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