Category Archives: «Blogs»

When licensing Oracle products, many businesses fail to understand the licensing requirements for virtual technologies and disaster recovery.  These licensing mistakes can result in significant unbudgeted expenses related to Oracle software licensing. (1) Virtualization ......

Oracle maintains what I consider to be the most aggressive audit program of any major software publisher. Its licensing rules can be extremely difficult to understand, and they frequently are not clearly stated in the applicable license agreements. Moreover, Oracle’s L......

Oracle’s “Technology” software products (such as its WebLogic and Database programs) are very popular products. Unfortunately, as we have explained numerous times here, Oracle’s license agreements and compliance practices entail numerous pitfalls for unwary users......

[caption id="attachment_4770" align="alignnone" width="608"] Can a BSA | The Software Alliance or SIIA Audit be Short Circuited?[/caption]   Companies react in different ways after receiving a letter from the Business Software Alliance (BSA) or the Software & ......

BSA| The Software Alliance (the “BSA”) is an organization that acts on behalf of software publishers to enforce copyrights. The membership of the organization may undergo changes, which can impact an existing software audit if a member leaves during the course of the a......

Software auditing entities, such as the Business Software Alliance and Software & Information Industry Association, typically set forth a complex set of requirements for software audits that can be confusing, time-consuming, and expensive. Many businesses faced with soft......

Modern financial history is chock full of embarrassing audit scandals, which caused executives and corporate brand names severe damage from intentional fabrication of revenues, or creating imaginary profits, or claiming assets that turn out to be a mirage. There’s a new......

The need for United States and Canadian Businesses to have a GDPR Compliance Initiative in place is paramount. The General Data Protection Regulation (GDPR) became effective on May 25, 2018 (the “Effective Date”). GDPR is the widest sweeping privacy regulation to hit t......

Traditionally, software audits were conducted by gaining access to software installations and reviewing entitlements. Theoretically, if a customer is using a cloud product accessed by login credentials, then audits wouldn’t be an issue because the software publisher wo......

IBM may be making it more difficult for IBM customers to qualify for sub-capacity licensing in virtualized environments.  As many companies who have been audited by IBM have learned, it is sometimes difficult to demonstrate that the company has met all the criteria necess......

In response to continued customer concerns about how to license for access to SAP products by third parties or by processes, SAP announced that it was offering a new pricing model based on indirect access.  Customers using SAP S/4HANA, SAP S/4HANA Cloud, and SAP ERP solut......

Microsoft and Flexera recently announced a joint initiative that the two companies have touted as a way to transform “the software supply chain” through the use of a standard set of software asset management (SAM) solutions. By deploying Flexera’s FlexNetManager Suite ......

Software licensing compliance is a complex task to manage. The metrics for measuring compliance often are a challenge to gather, and those metrics typically are different from software publisher to software publisher. This means that software asset management (SAM) teams nee......

Software piracy audits conducted by the BSA and the SIIA threaten small and medium sized businesses. As the economy tightens, software publishers such as Microsoft, Adobe, and Autodesk hide behind software piracy enforcement groups to pursue customers accused of installing m......

The Digital Millennium Copyright Act (the “DMCA”) can help owners of some intellectual property (e.g., copyrights) remove online infringing content.  But, the DMCA does not apply to trade-secrets.  So, what is a company to do if it finds its trade secrets being infring......

I previously presented my thoughts here regarding changes Microsoft made to its Product Terms pertaining to the Self-Hosted Applications benefit under Software Assurance. After publishing that entry, Microsoft reached out to me to clarify that the principal effect of the ch......

The BSA and SIIA are not the only organizations pursuing business for software copyright infringement. Though it is a member of both the BSA and SIIA, Autodesk, which manufactures the popular design software AutoCAD, often pursues audit targets on its own. The audits begi......

Autodesk routinely sends letters to businesses that it suspects may be using Autodesk software products without adequate licensing, both in order to confirm those suspicions as well as to address any license-compliance discrepancies. Typically under threat of a federal lawsu......

Earlier this year, with no fanfare (which is perhaps unsurprising), Microsoft implemented a significant change to its Product Terms pertaining to Software Assurance (SA) benefits that likely will have a significant licensing impact for companies that have taken advantage of ......

On July 28, Oracle announced that it had entered into an agreement to acquire NetSuite for approximately $9.3 billion. NetSuite was founded in 1998 and is one of the very first, enterprise-level, cloud-services providers, delivering various, hosted enterprise resource planni......

The limited liability company “LLC” is a popular way to structure a new business venture in Texas. The primary reason for forming an LLC is to obtain protection from personal liability for the owners of the business. Owners who are planning to form new business entities......

Many individuals and businesses are considering whether to protect their assets through the formation of an LLC or an Asset Protection Trust.  Many people fail to address this need until after liability occurs, and by that time, it is too late. Nevada is a unique place com......

Many businesses have software licenses that are tailored to the business’ needs, and are for business operations on a day-to-day basis. But what happens if the software provider goes out of business or discontinues support for the software? In short, the business may not h......

Sometimes a company receives notices of audits from many publishers or trade associations at the same time. Often this is because multiple agencies have received confidential reports from the same informant. If a current or previous employee contacts both the Software & ......

Recent weeks have seen a number of news reports and announcements indicating that the Next Big Thing for audits – financial audits, at least, for the time being – is the use of artificial intelligence technologies to facilitate the analysis of large volumes of data i......

Microsoft, like other software publishers, routinely audits customers to help ensure that it is protecting the value of its intellectual property. Microsoft verifies its customers’ compliance using several methods. 1. Microsoft License Verification (also, Software Asset Ma......

Companies that have long relationships with Microsoft know that the company’s form licensing agreements have steadily evolved over time, and typically for the worse. If software licensing can be said to have any “natural laws,” certainly the First Law could be paraphra......

Autodesk, like many other software publishers, are now offering subscription based licenses instead of perpetual licenses. Customers tend to find the flexibility of subscription-based licensing appealing because those licenses allow for growth and changing work environments.......

Microsoft is in the process of transitioning many of its volume-licensing customers from the Select Plus Agreement to the new Microsoft Products and Services Agreement (MPSA). (More information on the transition framework is available here.) A notable difference between the......

In the past, business consumers of Microsoft’s products and services have needed to reference at least two documents – the Product List and the Product Use Rights – to help determine the purchasing requirements and licensing rules applicable to those products and servi......

The Services Provider License Agreement (SPLA) is Microsoft’s preferred licensing option for businesses wanting to use Microsoft products in support of hosted software solutions made available to end users over the Internet. For many companies, SPLA is a good fit, in that ......

Microsoft Enterprise Agreements may represent attractive licensing options for larger companies with dynamic IT environments for which steady growth can be projected over a three-year term. However, smaller or mid-size companies with relatively static IT environments may exp......

Companies licensing Microsoft software under Enterprise Agreements (EAs) likely have familiarity with the default requirement to true up EA Enterprise Products based on any increase either in the number of “Qualified Devices” (generally, workstations capable of running o......

Many online service providers are well aware that Microsoft’s Services Provider License Agreement (SPLA) entails a licensing framework that can be difficult to manage. SPLA may be a great model for businesses seeking to “float” their license expenditures from month to ......

Microsoft’s MSDN subscription licenses often create license compliance problems.  These problems arise because it is extremely easy to over deploy Microsoft software using MSDN media because it includes a vast array of Microsoft products with limited deployment controls.�......

In any software audit, there are two over-arching categories of information that must be collected: data regarding what products are deployed on a business’ computers and records demonstrating the licenses that the business has acquired to use those products. With regard t......

Licensing Microsoft server products in any environment can be a challenging undertaking, given the complexity of some of Microsoft’s licensing rules. However, licensing Microsoft products for commercial hosting environments under a Services Provider License Agreement (SPLA......

In a typical Microsoft audit of software licensed under perpetual licenses, the auditors usually will compare installations of Microsoft products against licenses owned, and Microsoft will require the audited business to purchase additional licenses required to cover any gap......

Microsoft offers an array of software licensing options for its business customers. However, during an audit, the timing and course of the project typically follows a fairly well-worn path: 1. Kickoff meeting At this step, Microsoft’s hired auditors (typically PriceWa......

With the April 2014 versions of the Product Use Rights (PUR) (for volume licensees) and the Services Provider Use Rights (SPUR) (for services providers under SPLA), Microsoft has implemented significant changes to several usage rights associated with fail-over or disaster-re......

As discussed previously, providers of software hosting services may deploy on their servers Microsoft products licensed by their customers under two different scenarios, one of those being where the hosting provider has dedicated a physical server for use by the customer pro......

Like any good business, many providers of hosted IT solutions prefer to demonstrate flexibility in offering services to their customers. For example, a company that offers hosted Exchange services may want to allow their customers to use perpetual licenses the customers purc......

For several years now, Microsoft has offered some of its customers the “opportunity” to have third-party licensing consultants (selected by Microsoft) review those customers’ Microsoft product deployments and determine whether those customers have all of the licenses n......

Many businesses running virtual servers with shared physical infrastructures have encountered significant audit exposure arising from the fact that, according to Microsoft, the physical machines in a clustered arrangement may be “running” any number of Windows Server ins......

Hosting services customers often want to use licenses that they have acquired to deploy Microsoft software on a service provider’s servers. Those customers need to be wary about such deployments, as applicable license terms may restrict their ability to deploy the products......

One of the first steps we typically recommend to businesses facing software audits from any source is to try to estimate the financial exposure related to those audits. Doing so allows a company to allocate its resources more efficiently and to set aside reserves or make oth......

In a past entry, I mentioned the SPLA Qualification Road Map as a helpful document for companies to use when trying to determine the appropriate license model for Microsoft products deployed in connection with hosted services. Again, the road map takes the form of a flowchar......

We write extensively at this site about some of the finer points pertaining to licensing software under Microsoft’s Services Provider License Agreement (SPLA). However, some businesses new to the model often ask us much more basic questions, like: What is SPLA, and is it r......

Businesses that have endured audits initiated by Microsoft in connection with Services Provider License Agreements (SPLAs) are all too aware that Microsoft’s auditors spare no effort in identifying opportunities to increase the total amount of the compliance purchases dema......

Businesses wanting to license Microsoft products for use in connection with solutions delivered to customers over the Internet need to remember proper licensing involves answering two questions: • Are users “accessing” the software? • Is that access “commercial ......

Many companies using Microsoft products to deliver services to their customers are familiar with the “commercial hosting” prohibition included in most Microsoft license agreements: You may not host the products for commercial hosting services. Most CIOs reading that proh......

An increasing number of enterprises are considering the value of Microsoft’s enterprise-level licensing models. The model with which companies are most familiar likely is the Enterprise Agreement (“EA”), under which a business licenses all of its desktops for Windows, ......

Microsoft audits – especially for larger companies – often are resource-intensive and exhausting undertakings even for the most well prepared IT teams. However, certain aspects of such audits often present more challenges than others. In our experience, the most difficul......

Most business owners are familiar with the “traditional” server-plus-client licensing scheme for many Microsoft server software products, such as Windows Server operating systems, Exchange messaging software and SQL Server database software. That is, you purchase one lic......

The basic model for licensing Microsoft server software – both for operating systems and for applications – is to purchase a license permitting the installation of the software on a server and a number of client-access licenses (CALs) equal to the number of users or devi......

Many organizations allow their users to access desktop applications like Microsoft Office through Citrix, which is often used to control the number of users who can access the software at any one time. These organizations need to carefully evaluate whether they are legally a......

Many businesses struggle with the task of determining what kinds and quantities of licenses are needed in order to deploy Microsoft operating systems and client-accessed applications on their servers. The first step in that process often is the most difficult: decidin......

Microsoft offers its employees an opportunity to buy discounted software if they agree to restrictive usage terms when purchasing from the Microsoft Company Store. In addition to the online Microsoft Company Store, employees may go to one of a few different physical location......

The Business Software Alliance (“BSA”) and Software Industry & Information Association (“SIIA”) work on behalf of their members (the lists of which include Microsoft (for the BSA), Adobe, and Autodesk, among others) to enforce copyrights and the terms of end user......

Businesses seeking to license older versions of Microsoft products may encounter challenges acquiring valid licenses.  This is a particular concern for some companies that utilize Microsoft products as the basis for their IT infrastructure and that want to avoid a costly mi......

Generally when purchasing new software online, or upgrading existing software, a box pops up on the computer that says “Agree to Terms”.  Most people simply check the appropriate box and click next without reading the fine print.  This can be troublesome when the Busin......

Use terms of Microsoft server products can be complex and difficult to interpret.  Microsoft SQL Server licensing rules for use in virtual environments demonstrate that a careful review of the use terms is necessary to avoiding copyright or contract violations. The current ......

Your business has just finished spending the last year of its corporate life responding to a software audit demanded by the Business Software Alliance (BSA) or the Software &Information Industry Association (SIIA). It has devoted substantial time and internal resources i......

In a previous post, I introduced the concept of post-settlement compliance following the settlement of audits initiated by the Business Software Alliance (BSA) and the Software & Information Industry Association (SIIA). As noted before, the first step to completing the c......

Software auditing entities, such as the Business Software Alliance (“BSA”) and Software & Information Industry Association (“SIIA”), initiate software audits of businesses that more often than not result in a settlement agreed to and negotiated by both parties. I......

I am a technology attorney in Texas specializing in software license transactions and disputes with the major software publishers including Microsoft, Adobe, Oracle and IBM. I represent some of the world’s largest corporations in enterprise software license transactions. I......

Most businesses seeking to license Microsoft software for the purpose of delivering hosted software solutions over the Internet turn first to the company’s Services Provider License Agreement (SPLA). SPLA is Microsoft’s flagship licensing model for commercial hosting ser......

When I heard a Microsoft executive recently explain its new approach to software license compliance enforcement, I couldn’t believe my ears. Statements like, “Microsoft does not endorse audits,” and “Microsoft believes that most of its customers want to be in com......

In 2015, IBM acquired no fewer than 11 software and services companies.  Many software customers are surprised that after IBM purchases a company, IBM often significantly changes the license terms of the products.  For some customers that have purchased unlimited or site l......

The software-audit language contained in IBM’s standard license agreements never has been anything that anyone would mistake for customer-focused or even very fair contract terms. However, in August 2014, IBM released a new version of its Passport Advantage Agreement (PAA)......

Fans of Star Trek likely are familiar with the dreaded Borg – an alien race of cyborgs that survives and swells its ranks primarily by conquering other races and then absorbing them into the collective through brainwashing and physically altering them with Borg-y bionic bo......

In April 2012, IBM announced that it had reached an agreement to acquire Varicent Software, Inc., an Ontario-based publisher of analytics software for compensation and sales performance management. According to the announcement, Varicent’s customers include Starwood Hotels......

One of the major changes in the latest version of IBM’s Passport Advantage Agreement is the requirement that customers maintain subscription and support (S&S) on either all of the licenses that are installed and in service or none of the licenses. Customers can no long......

When first contacted by IBM for a "compliance review" (read: software audit), many business owners simply assume that the scope of the requested audit is within IBM’s rights under applicable licensing agreements. Alternatively, if they do request that IBM identify the basi......

Many businesses are realizing the processing and failover benefits of incorporating clustered servers in their IT environments. Having groups of servers whose processing resources are shared and centrally allocated means that server malfunctions can be remedied without compr......

A processor value unit (PVU) is a unit of measurement that IBM uses to determine licensing costs based on the kinds of processors deployed on servers where IBM software is installed. A server’s PVU count is defined by the brand, model and number of physical processors runn......

Business owners and managers whose companies have been targeted by IBM for a compliance audit often express surprise at the complex method IBM uses to determine the licensing requirements for many of its server software products, such as WebSphere and Tivoli. Many software v......

IBM has begun a comprehensive program of compliance audits of its software clients. Scott & Scott’s clients have begun receiving letters from IBM Software Compliance demanding cooperation with a “routine assessment” of the client’s deployment of IBM software. Acc......

“In hindsight, I should have involved our legal team immediately, since they were requesting information that had nothing to do with Oracle.” Wise words. A recent article published by Business Insider (here) is the latest in a run of recent media attention (more here) ......

For many Oracle products, like Database, the license agreement or ordering documents contain minimum license requirements. Often, quantities of licenses necessary to satisfy the minimum licensing terms varies based on the edition of the license in question. For instance, cus......

Licensing software at the enterprise level is rarely a simple undertaking. Unless your company is big enough to demand custom licensing terms, most businesses will face the prospect of contending with license metrics that may work great for the software publishers, but that ......

As the year comes to a close, many software publishers and trade associations with calendar year accounting are resolving as many outstanding software audits as possible. Companies currently engaged in a software audit may be able to negotiate favorable resolutions to their ......

On May 6, 2013, Adobe announced that Creative Suite 6 and the component products included in that product line (e.g., Photoshop CS6, Illustrator CS6, etc.) would be the last Creative Suite products to be released under stand-alone, end-user licenses. Citing strong user enthu......

Software publisher Adobe Systems Inc. actively investigates its existing customers to determine whether each customer has properly licensed Adobe software, or is committing copyright infringement. Adobe often pursues its customers directly, but sometimes grants a power of at......

In May 2013, Adobe announced that CS6 would be the last version of its Creative Suite software product line that would be available under traditional, stand-alone, perpetual licenses. Instead, all releases of Creative Suite products since then have been available exclusively......

Having shone its spotlight on Oracle’s notoriously complex licensing policies and often adversarial audit practices, the Campaign for Clear Licensing (CCL), a UK-based organization advocating reforms to software-licensing practices, now has shifted its attention to what it......

One venerable software license model that many companies have utilized in the past has been the license upgrade, under which a licensee could acquire the right to deploy the newest version of a product at a much-reduced price, provided that the licensee also owns a full lice......

A software audit typically resolves in one of three ways: a dismissal, a settlement, or litigation. The most common path to resolution is a settlement between the parties for potential copyright infringement stemming from allegedly unlicensed software. Software publishers so......

IBM software licensing can be a very complex knot to untie. While IBM does develop new products in house, many of its most popular offerings (Cognos, Tivoli and ILOG, to name a few) are the result of its active history of acquiring smaller publishers and then continuing to o......

Increasingly, software publishers are looking for new tools and processes to assist them in their license-enforcement programs. While such efforts are understandable to a degree, they sometimes can include methods that are somewhat dubious at least from a customer-relations ......

Independent software vendors and other companies that distribute third-party software products as part of their proprietary solutions often are predictably good at capturing core business terms in their customer agreements, carefully defining the products and scope of servic......

At the conclusion of software audits where it appears that software products were installed and used without adequate licensing, many companies find themselves confronting two challenges. First, there is the fact that the software publisher likely is demanding that the compa......

I previously have discussed what "commercial hosting" means when it comes to Microsoft software, but the universe of problems created by the "hosting" ambiguity obviously is bigger than just Microsoft. Almost all software publishers restrict or prohibit - to varying degrees......

Business software buyers increasingly are aware of the significant changes that Microsoft will be implementing to the license metrics for SQL Server when version 2012 of the popular database solution is released this April. However, of potentially equal or even greater signi......

On January 12, 2012, the D.C. Court of Appeals held that the Software & Information Industry Association (SIIA) would not be required to disclose the name of one of its confidential informants in a civil case for defamation. Solers, Inc. had filed its lawsuit against a J......

If your company has received a letter from the BSA | The Software Alliance requesting a software audit, you are probably wondering whether you should cooperate or ignore the request. I have been handling BSA cases for almost a decade and advise my clients to cooperate but to......

Independent software vendors (ISVs) constitute a diverse group of businesses whose core business model typically consists of utilizing third-party software infrastructure and development platforms (such as Microsoft SQL Server or IBM WebSphere Application Server) to create t......

Businesses deploying software published by Attachmate Corporation should strongly consider making an effort now to review their license-compliance status. Attachmate is a major player in markets for various IT-infrastructure software solutions, and it has demonstrated its wi......

On July 22, 2010, software publisher AccuSoft sued Northrop Grumman Systems in federal court for breach of contract, copyright infringement and trademark infringement related to Northrop’s use of AccuSoft’s ImageGear and ImageTransport software. Northrop allegedly used a......

UPDATE: On October 3, 2011, the U.S. Supreme Court declined a request to grant certiorari in the Vernor case, allowing to stand the Ninth Circuit’s reversal of the trial court’s decision. The Supreme Court’s refusal to hear the case means that, at least in the Ninth Ci......