Author Archives: «Christopher Barnett»

Most companies with more than a handful of computers in their IT environments rely on the results of network-inventory tools to gather the deployment data needed for accurate software audits. Without the tools, a business would be required to assign valuable resources to......

Businesses that have endured software audits from industry groups like the BSA and the SIIA or from software publishers like Autodesk likely are familiar with the basic audit process of counting the total number of installations for audited products and comparing those ins......

Businesses contacted by Adobe for software audits can be lulled into thinking that those investigations entail less exposure risk than audits by other publishers, like Microsoft or IBM. Adobe audits typically are conducted directly by Adobe representatives, rather than b......

Enterprise-level software solutions often are very complex products requiring a level of expertise that may be outside the experience or skill sets of generalist IT teams. Many businesses therefore rely on the services of independent software vendors and consultants to eva......

Software auditors such as KPMG, Deloitte and PriceWaterhouseCoopers like to have things their way. It’s an understandable impulse – with likely hundreds of audits pending at any one time, the natural inclination is to standardize the process around a single set of tool......

While the over-arching concept underlying a software audit initiated by a publisher like Microsoft or IBM is the same as that in an audit initiated by the BSA | The Software Alliance or the Software & Information Industry Association (SIIA) – a comparison of softwa......

Microsoft’s Services Provider License Agreement (SPLA) is the principal licensing agreement for companies that want to use Microsoft products to deliver hosted software solutions over the Internet. Microsoft’s standard volume license agreements expressly prohibit usi......

Software publishers know that the vast majority of their customers are, to varying degrees, out of compliance with the terms of license agreements governing their use of the publishers’ software products. Especially in larger enterprises, managing and maintaining a com......

Businesses often have close relationships with software vendors, and that closeness usually is in direct proportion to the extent and importance of those vendors’ software products in the businesses’ network environments. However, despite their best marketing efforts......

Many software-solution vendors utilize third-party infrastructure or application programs as frameworks for embedded solutions that they sell to their customers and install on their customers’ computers. Licenses for those third-party products typically can be acquired......

Many businesses contact Scott & Scott, LLP regarding Services Provider License Agreement (SPLA) audits after providing extensive information to Microsoft’s auditors and receiving compliance demands that would be ruinous for their bottom lines, if paid in full. At t......

In the software licensing world, all audits are not created equal. On one hand are the “true,” contractual audits. Here, the applicable license agreement gives the software publisher the right, usually upon notice and sometimes limited in frequency or scope, to dema......

Enterprise-level software solutions often entail complex licensing challenges. Many of the thorniest questions often center on how to license software in virtualized environments, especially if the goal is to use something less than the full processing power of the hosting......

In defending against software audits initiated by publishers such as Microsoft or IBM, many businesses make the mistake of assuming that those publishers or their designated auditors know what they are talking about when it comes to determining what licenses need to be p......

In late August 2022, Microsoft announced significant changes to several of its licensing models that will have big impacts especially on cloud and hosted solution providers and the services they offer to their customers. While the new licensing terms are not set to be reve......

Software license compliance is a task that typically requires constant vigilance. Despite a CIO’s best efforts, it is almost inevitable that software will be deployed on a company’s computers at some point without having the necessary licenses to permit such use. ......

For many businesses, the allure of moving their software platforms, applications and/or databases to The Cloud lies substantially in the promise of ridding themselves of license-compliance concerns. The pitfalls of a Cloud-based architecture are worth accepting for ma......

Many businesses have teams of third-party vendors to assist with their business operations or to provide independent services – like software development or website design – that require access to company servers. For Microsoft products like Windows Server that re......

In many cases where we are retained to assist companies targeted for software audits after software-deployment data already has been submitted to the auditing entities, we have the regrettable obligation to let our clients know that they have disclosed too much. Over-dis......

IBM software licensing can present an array of interpretive and compliance challenges for even the most sophisticated licensees. Here are three of the most important things to keep in mind when planning to license IBM products under the company’s standard-form agreemen......

In order to effectively manage their software usage and to mitigate compliance exposure, companies need to know how to gather and analyze information regarding their product usage. While some software products may have unique data-collection requirements that ordinarily ......

Most providers of hosted software solutions traditionally have delivered those solutions over the Internet from their own servers. However, an increasing number of businesses are interested in outsourcing not only their internal-use IT infrastructure but also the systems......

In order to effectively manage their software usage and to mitigate compliance exposure, companies need to know how to gather and analyze information regarding their product usage. While some software products may have unique data-collection requirements that ordinarily ......

In our experience, many companies facing software-licensing audits initiated by vendors like Microsoft, Oracle or IBM seem to be under the impression that auditors have a nearly unfettered right to information. This is not the case. However, too many audit targets discover t......

No one likes to be audited. In most cases, there is little that a business can do at the outset of an audit to avoid licensing exposure, if that business has historically inadequate software asset management processes. However, there are steps that all audited companies us......

Software audits can be intensely frustrating ordeals for businesses to navigate. Many publishers will go to great lengths to cajole their customers with assurances of amicability and license-optimization opportunities, but most IT managers know that the reality of audits i......

It is standard practice for software vendors to include clauses in their license agreements giving the vendors the right to invoke audits or some other mechanisms to ensure that the licensed products are used in a way that is consistent with agreed licensing restrictions......

Most businesses that try to plan for software audits and to estimate the potential exposure they could incur in the event of those audits know that the primary cost components of that exposure typically are the prices associated with any licenses they may have failed to ......

Microsoft licensing is a complex, multi-faceted undertaking, with different rules and license metrics applying to different products. In the context of software audits initiated by Microsoft, it is important to keep in mind the fact that the auditors hired to perform tho......

IBM software is expensive. In some cases, very expensive. While this may represent a necessary cost of doing business for many companies with mission-critical software solutions developed on or using IBM applications, all IBM customers clearly are incentivized to maximiz......

Microsoft does not make licensing SQL Server easy, either under SPLA or under volume licensing agreements. Here are the three most significant problems that our clients face when trying to license that product: Four-Core Minimum – Microsoft allows SQL Server to be lic......

Most Microsoft software products – especially server products – can be licensed under multiple different models and metrics. SQL Server probably is the best example of a product that presents companies with multiple decision layers when analyzing new use cases: • C......

Many larger companies feel an understandable desire to move toward, centralized, enterprise-level software licensing agreements. Such frameworks often have the advantage of allowing licensees to spread their license spends more evenly over the term of the agreement and to ......

Software-compliance audits initiated by IBM can be extremely burdensome and time-consuming and can force companies to face challenges that are somewhat unique among major-publisher audits. For one example, a significant component of IBM’s business model is the acquisitio......

CTOs who have read Microsoft’s volume license agreements and product use rights documentation know that Microsoft has a special place in its heart for contractual “gray area.” To some extent, that fact likely arises from the practical impossibility of trying to acc......

One of the most critical steps of any business faces in any software audit is conducting an internal analysis of deployments to entitlements, preferably before any audit data is shared with the auditors. That internal review serves several purposes, including (1) identif......

In recent years, Microsoft seems to have been shifting an increasing volume of its license-compliance resources toward what it calls Software Asset Management (SAM) reviews. These “optional” engagements typically are proposed by Microsoft personnel with whom a compan......

Many companies would like to know whether and to what extent their existing Oracle software product licenses entitle them to use that software in a third-party cloud-hosting environment – such as Amazon Web Services’ (AWS’s) Elastic Compute Cloud (EC2) environment – ......

Most software license agreements used by major publishers like Microsoft and IBM are in many ways vague with respect to license restrictions and metrics. This leaves licensees in the position of having to interpret the agreements based on whatever guidance may be availab......

Most software audits pertaining to products licensed under perpetual licenses (such as licenses acquired under a Microsoft Select Agreement, MPSA or (usually) Enterprise Agreement) incorporate a snapshot-in-time approach, where licenses owned generally are compared to deploy......

There is a set of related questions our software-audit clients frequently ask us that boil down to variations on one or more of the following: Why am I being audited? What if anything did I do to cause this? How can I avoid it in the future? Unfortunately, those questions......

Negotiating with software, SaaS and hosting vendors is a leverage game. Market leaders like Microsoft, Oracle, IBM, Adobe and SAP know this. Those vendors have structured their sales processes to maximize their ability to exert control over the negotiations framework and......

Many businesses that identify a need to acquire “commercial hosting rights” in connection with hosted solutions incorporating Microsoft software have two options for acquiring them: through a Services Provider License Agreement (SPLA) with Microsoft or through the Self......

Each of the major software publishers has one or two tricks up its sleeve – tricks that often are missed by licensees – affecting how its server products may be used in virtualized environments. For example, Microsoft SQL Server requires a minimum of four core licenses......

Many businesses expend far too little effort in securing appropriate non-disclosure agreements during software audits. Some businesses even wholly overlook NDAs during the audit process, believing that they have no leverage to demand reasonable protections for the informat......

Most software audits eventually reach a point after all the deployment and license data has been collected when the auditors – often employees of an accounting firm like Deloitte or KPMG, though sometimes the publishers’ own internal audit teams – present their draft......

Following the conclusion of a software audit, Microsoft’s standard practice is to require an audited company to purchase licenses associated with calculated “unlicensed use” within a set period of time (typically, 30 days) following receipt of Microsoft’s settlem......

It is common practice for software publishers to incorporate by reference various licensing rules and policies to govern the usage of the publishers’ software products. For example, Microsoft’s volume license agreements (such as MPSAs or Enterprise Agreements) incorp......

Obvious though it may sound, in almost every software audit the most crucial element contributing to a positive outcome is an accurate inventory of what software is deployed. Unfortunately, far too many businesses faced with an audit end up receiving grossly over-inflated ......

Software audits are significant legal and financial risks for all companies. With more and more software publishers utilizing intrusive audits and other information-gathering exercises as the basis for licensing transactions and – more troublingly – as sources of rev......

[caption id="attachment_5534" align="alignnone" width="614"] Fundamentals of Software Audit Data Collection[/caption]   One of the tasks with which Scott & Scott’s clients most commonly request our assistance is how to conduct a software audit. While almost ......

In the universe of software-copyright enforcement programs, Autodesk’s may be the most active and vigorous. All businesses – even those not running Autodesk software – should take steps early and regularly to identify and eliminate any software-compliance gaps asso......

It is common for software solution providers to use third-party products to support the functionalities those providers have developed for their solutions. For example, a network-monitoring solution may incorporate IBM Cognos functionality, or an accounting solution may in......

Many software publishers recognize that perpetual licenses should be, true to their name, perpetual, and that unless you violate the terms of the licenses they should remain in effect forever. As the licensee, you may not want to use that Microsoft Office 97 license you ......

The software-as-a-service (SaaS) solution-delivery model is becoming more and more widespread. Developers of all kinds of software solutions – products covering everything from office productivity, design, accounting, CRM, business intelligence and more – increasingl......

There are many good reasons that businesses often cite in seeking to transition their IT operations to a vendor-delivered Cloud environment. It’s scalable. It’s more reliable and secure than what the business may be able to deliver for itself. It’s (often) cheaper......

Many of our clients contact us regarding notices they received from Microsoft requesting an internal self-assessment of their license positions under their Services Provider License Agreements (SPLAs). Naturally, many of those clients have questions about that process and ......

Companies with experience licensing Microsoft software and services through Enterprise Agreements know that small forests could be felled to produce the paper required for the typical document stack. EAs often incorporate a dozen or more different components, including som......

Many companies who comply with a demand by a software publisher or industry association (such as the BSA or the SIIA) for an internal software audit end up facing significant settlement demands after forwarding their audit materials to the other side. One of the reasons ......

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 & ......

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......

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......

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......

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......

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......

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 ......

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......

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 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......

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......

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......

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......