Accidental pirate
How to manage software licences and stay out of trouble
By Lawrence Cummer
November 23, 2010
November 23, 2010
Do you know how many copies of your primary office application are currently running in your business? If you answer no, you aren’t alone, and that may hit you in the wallet: you may not have enough licences, which could cost you in fines for unlicenced software, or you may be wasting money purchasing unnecessary licences for extra seats.
Efficient licence management has become a growing business concern, said Daniel Reio, director of marketing at reseller CDW Canada. In the old days, he said, businesses could just count the number of software boxes on their shelves, but today most companies seek the efficiency and volume-based savings that come from purchasing a number of licences and maintaining a single disc image that can be installed on all machines.
The problem is not all businesses are expert in software management. As well, licencing options can be complex.
In April, the Business Software Alliance (BSA), an association of software manufacturers that combats piracy and promotes copyright protection, revealed that seven Canadian businesses paid a combined total of $172,699 in fines, and had to delete unauthorized software and purchase the licences necessary to become compliant. As part of the settlement, the companies were also mandated to strengthen their software asset management (SAM) practices.
With penalties for installing unlicenced software as much as three times the purchase price, and potential cost savings of as much as one-third, many experts recommend the implementation of SAM practices.
Get organized
Whether you call it an audit, a baseline or an inventory, experts agree the first step is to determine what software is currently purchased and deployed.
“Nobody likes the term audit,” said Peter Beruk, senior director of compliance marketing at the Business Software Alliance. “But it is the only way you can really determine what you have licences for.
“The nice thing about the audit is the farther you go with it [the more] business benefits come from it. For example, a lot of companies that don’t do audits are also paying for maintenance on products they don’t normally use anymore. If you’re no longer using it, why are you spending that money?”
Gartner Group research suggests SAM initiatives can reduce software costs by five to 35 per cent.
Make it policy
At its root, SAM is a business policy that must be communicated. Employees need to know the company’s stance on illegal software, and guidelines need to be set for every phase of the software’s life cycle—from purchase, to use, to retirement.
According to Diana Piquette, software asset management and compliance manager at Microsoft Canada, communication is often the failure point. She recommends businesses communicate their code of ethics internally at the start of every year.
This is becoming increasingly important with the growth in mobile computing because employees may begin to treat office equipment as personal resources. Meanwhile, businesses remain liable for any software those employees load onto their mobile office devices. “It happens so easily and innocently when you don’t communicate the policy to the employees,” Piquette said. In addition to non-compliance to software licencing, such a policy helps prevent the installation of malicious software, unnecessary support costs related to rogue applications and other software misuse.
Turn to software
For businesses with 100 or more devices, or with many applications deployed across many devices, employing a software application to remotely manage software is a good option, said Pam Seale, product marketing manager at Absolute Software. Her company’s Absolute Manage, for example, gathers inventory information remotely across the network as well as managing the life cycle of installed software.
Doing software or hardware asset management manually, Seale said, “was hugely time consuming. Today, you can get a good, inexpensive software application and see everything you’ve got and where it is in 15 minutes.”
“It’s great to know what it is you need to do (from a policy perspective), but you have to invest in technology that isn’t going to break the bank and is also going to give you the hands on that you need.”
Software can also handle patch management, single automated installs and asset inventory.
BSA’s Beruk warns that software applications are still just tools, and “tools are imperfect, so you cannot rely entirely on the output of what the tool tells you, you have to put some common sense around that data.”
Get a little help
Businesses may opt to engage reseller partners as SAM resources. Resellers have records of what software has been purchased, and if a business uses one reseller for IT sourcing, then that sales record becomes a de facto SAM list. And it is in a reseller’s best interest to be familiar with its customers’ software licence renewal times and software needs. In addition, resellers often have access to asset-tracking tools that can be used on their customers’ networks, eliminating additional expense for the customer.
“I’m amazed how few companies make use of their resellers,” Beruk said.
This advice can be especially important for small businesses, Reio said. “If you look at the typical small business, they want to be running their company. All they want to be is compliant; they don’t want to have to be experts in software licencing. The reality today is you really need to engage a software expert to help you wade through all the options you have.”
Look for future efficiencies
There are times when purchasing more than you need can actually save money. A fast-growing business might be just short of eligibility for a volume discount, for example, but looking three to six months down the road might lead to the purchase of extra licences in advance to get in on a discount. In addition, many departments might be purchasing the same software. A holistic view of purchases can ensure that software is acquired at high-volume discounts.
And, of course, the biggest bang can come from eliminating unused or rarely used software altogether. “You could purchase a bunch of software licences and [through inventory reporting] you learn that 20 per cent of users who requested it haven’t even opened the application,” Seale said. “Over a prescribed period of inactivity those licences can be transferred to another machine for a user who’s specifically asking for the application.”
Illustration: Rachael Lambert
Efficient licence management has become a growing business concern, said Daniel Reio, director of marketing at reseller CDW Canada. In the old days, he said, businesses could just count the number of software boxes on their shelves, but today most companies seek the efficiency and volume-based savings that come from purchasing a number of licences and maintaining a single disc image that can be installed on all machines.
The problem is not all businesses are expert in software management. As well, licencing options can be complex.
In April, the Business Software Alliance (BSA), an association of software manufacturers that combats piracy and promotes copyright protection, revealed that seven Canadian businesses paid a combined total of $172,699 in fines, and had to delete unauthorized software and purchase the licences necessary to become compliant. As part of the settlement, the companies were also mandated to strengthen their software asset management (SAM) practices.
With penalties for installing unlicenced software as much as three times the purchase price, and potential cost savings of as much as one-third, many experts recommend the implementation of SAM practices.
Get organized
Whether you call it an audit, a baseline or an inventory, experts agree the first step is to determine what software is currently purchased and deployed.
“Nobody likes the term audit,” said Peter Beruk, senior director of compliance marketing at the Business Software Alliance. “But it is the only way you can really determine what you have licences for.
“The nice thing about the audit is the farther you go with it [the more] business benefits come from it. For example, a lot of companies that don’t do audits are also paying for maintenance on products they don’t normally use anymore. If you’re no longer using it, why are you spending that money?”
Gartner Group research suggests SAM initiatives can reduce software costs by five to 35 per cent.
Make it policy
At its root, SAM is a business policy that must be communicated. Employees need to know the company’s stance on illegal software, and guidelines need to be set for every phase of the software’s life cycle—from purchase, to use, to retirement.
According to Diana Piquette, software asset management and compliance manager at Microsoft Canada, communication is often the failure point. She recommends businesses communicate their code of ethics internally at the start of every year.
This is becoming increasingly important with the growth in mobile computing because employees may begin to treat office equipment as personal resources. Meanwhile, businesses remain liable for any software those employees load onto their mobile office devices. “It happens so easily and innocently when you don’t communicate the policy to the employees,” Piquette said. In addition to non-compliance to software licencing, such a policy helps prevent the installation of malicious software, unnecessary support costs related to rogue applications and other software misuse.
Turn to software
For businesses with 100 or more devices, or with many applications deployed across many devices, employing a software application to remotely manage software is a good option, said Pam Seale, product marketing manager at Absolute Software. Her company’s Absolute Manage, for example, gathers inventory information remotely across the network as well as managing the life cycle of installed software.
Doing software or hardware asset management manually, Seale said, “was hugely time consuming. Today, you can get a good, inexpensive software application and see everything you’ve got and where it is in 15 minutes.”
“It’s great to know what it is you need to do (from a policy perspective), but you have to invest in technology that isn’t going to break the bank and is also going to give you the hands on that you need.”
Software can also handle patch management, single automated installs and asset inventory.
BSA’s Beruk warns that software applications are still just tools, and “tools are imperfect, so you cannot rely entirely on the output of what the tool tells you, you have to put some common sense around that data.”
Get a little help
Businesses may opt to engage reseller partners as SAM resources. Resellers have records of what software has been purchased, and if a business uses one reseller for IT sourcing, then that sales record becomes a de facto SAM list. And it is in a reseller’s best interest to be familiar with its customers’ software licence renewal times and software needs. In addition, resellers often have access to asset-tracking tools that can be used on their customers’ networks, eliminating additional expense for the customer.
“I’m amazed how few companies make use of their resellers,” Beruk said.
This advice can be especially important for small businesses, Reio said. “If you look at the typical small business, they want to be running their company. All they want to be is compliant; they don’t want to have to be experts in software licencing. The reality today is you really need to engage a software expert to help you wade through all the options you have.”
Look for future efficiencies
There are times when purchasing more than you need can actually save money. A fast-growing business might be just short of eligibility for a volume discount, for example, but looking three to six months down the road might lead to the purchase of extra licences in advance to get in on a discount. In addition, many departments might be purchasing the same software. A holistic view of purchases can ensure that software is acquired at high-volume discounts.
And, of course, the biggest bang can come from eliminating unused or rarely used software altogether. “You could purchase a bunch of software licences and [through inventory reporting] you learn that 20 per cent of users who requested it haven’t even opened the application,” Seale said. “Over a prescribed period of inactivity those licences can be transferred to another machine for a user who’s specifically asking for the application.”
Illustration: Rachael Lambert
