Managing Risks in the Software Audit Process

Rob Scott  Comments (0)
It has been said that software is the new oil. It fuels the information revolution. And in this metaphor, software audits are the meters that measure the flow—and extract maximum revenue for software makers. The auditors arrive on your company doorstep to “true up” y......

Disguised Software Audit Clauses

Keli Johnson Swan  Comments (0)
Agreements often contain clauses allowing the parties to review books and records, “Books and Records” clauses. These are often boilerplate clauses included in agreements without much consideration from the contracting parties. When a Books and Records clause is used......

Defending SPLA Audits: Critical First Steps

Christopher Barnett  Comments (0)
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......

Sweat the Small Stuff When Licensing Oracle Software

Christopher Barnett  Comments (0)
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......

Costly Software Audit Mistakes

Keli Johnson Swan  Comments (0)
BSA | The Software Alliance (BSA) and the Software & Information Industry Association (SIIA) are organizations that represent software publishers seeking to enforce the copyrights in the products they publish.  In furtherance of this goal, these entities routinely send ......

How to Recover Early Termination Fees For Managed Services

Rob Scott  Comments (0)
IT service providers that include early termination fees in their contracts must decide if they want to seek reimbursement when a customer terminates a contract early. MSPs find themselves asking: Is anything owed? Can I collect? What is the cost? Here are key points to cons......

Compliance Remains a Concern Even in the Cloud

Christopher Barnett  Comments (0)
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 many ......

Top Three Challenges in Standard IBM License Agreements

Christopher Barnett  Comments (0)
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......

Master Services Agreement Templates for MSPs

Rob Scott  Comments (0)
When an MSP begins a relationship with a new client, it is important they agree on certain terms and conditions by which business will be conducted. This is known as the Master Services Agreement (MSA). These are the foundational terms that all business will adhere to un......

License Ambiguities in Software Audits

Rob Scott  Comments (0)
Without a contractual provision to the contrary, ambiguous terms in a software license will be construed against the software publisher. Provided that there are no other business factors that would make litigation unwise, an ambiguous license agreement is the situation m......

Navigating Microsoft License Verification Audits

Keli Johnson Swan  Comments (0)
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. Contact Us Microsoft License Verification ......

IBM’s Standard Audit Clause is a Time Bomb

Christopher Barnett  Comments (0)
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......

Be Wary of Audit Tools Promoted by Software Auditors

Christopher Barnett  Comments (0)
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......

Termination Clauses in IT Managed Services Contracts

Rob Scott  Comments (0)
Monthly recurring revenue and multi-year contracts have been the driving force behind managed services for years. They have been the basis for the tremendous growth in managed services over the years. The length of the term of a service agreement is very important as ......

Factors Affecting Potential Exposure in Software Audits

Christopher Barnett  Comments (0)
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’s Auditors Are Not Infallible

Christopher Barnett  Comments (0)
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......

Risk Balancing Provisions in in Managed Services Contracts

Rob Scott  Comments (0)
The risks for Managed Service Providers are constantly evolving. New cyber threats and regulatory compliance requirements present significant challenges for MSPs. The most important way to mitigate privacy and security risks for Managed Service Providers is by including ......

Avoid Pitfalls When Deploying ILMT for IBM Software

Christopher Barnett  Comments (0)
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......

Why MSPS Need Their Own Data Processing Agreements

Rob Scott  Comments (0)
Over the past ten years regulation of data privacy and security has proliferated at the international, federal and state levels. Several industry-based federal regulations have been developed such as HIPAA for healthcare and GLBA for financial services. Other geographica......

Be Wary of Requests for Mystery Data

Christopher Barnett  Comments (0)
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......

SQL Server Licensing Challenges in Hosting Environments

Christopher Barnett  Comments (0)
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......

Managing Risk in Managed Services

Rob Scott  Comments (0)
This past week I had the opportunity to present on the topic of managing risk in managed services to the OTX Roundtable.  I want the thank the OTX Roundtable and Mark Jennings in particular for inviting me to speak.  What follows is Mark’s transcript of the meeting. ......

How to respond to a VMware Audit

Keli Johnson Swan  Comments (0)
Managing a complex IT environment very challenging, even before becoming involved in an external software audit from a software publisher or a third-party auditing entity. Businesses facing VMWare audits in particular should be prepared to take a number of steps to ensure ......

Software Audits: Proving Ownership of Software Licenses

Keli Johnson Swan  Comments (0)
Often the single most arduous and time-consuming task facing companies who are the subject of software audits is collecting entitlement information to prove ownership of licenses for software installed on its networks. Once a company receives an official audit letter from ......

Avoid Mixed-Mode Microsoft Licensing Whenever Possible

Christopher Barnett  Comments (0)
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......

Time Settlement Right for Software Audits

Keli Johnson Swan  Comments (0)
There is a growing trend for software publishers to keep software audits in-house and avoid using external organizations to pursue copyright infringement claims. Often, the compliance teams at the software publishers seek payment for software non-compliance through contr......

Oracle ULAs Require Delicate Balancing

Christopher Barnett  Comments (0)
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 ......

Settlement Structuring for IBM Audits

Christopher Barnett  Comments (0)
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......

Avoid Ambiguity in Microsoft Licensing Agreements

Christopher Barnett  Comments (0)
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 “grey area.” To some extent, that fact likely arises from the practical impossibility of trying to acc......

Top Tips for Post-Audit Software Remediation

Keli Johnson Swan  Comments (0)
Responding to a software audit can be an arduous, expensive, and time-consuming process for a company. The remediation process to close compliance gaps may vary slightly depending on whether the audit is initiated the software publisher itself or outsourced to an agency ......

BSA Informants: Disgruntled Employees

Keli Johnson Swan  Comments (0)
How to Protect Your Company against Copyright Infringement Claims by Disgruntled Employees Seeking a Reward In an effort to enforce the copyrights of its members, Business | The Software Alliance (“BSA”) offers the potential for monetary rewards to any informant tha......

Licensing Oracle Software in a Third Party’s Cloud

Christopher Barnett  Comments (0)
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 – ......

Products Liability and Kaseya’s Ransomware Attack

Julie Machal-Fulks  Comments (0)
The recent ransomware attack involving Kaseya’s VSA product has left managed service providers (“MSPs”) and end users evaluating what, if any, legal recourse they may have against Kaseya. The onerous limitations of liability provisions and indemnification clause in......

Burden of Proof in Copyright Infringement Matters

Keli Johnson Swan  Comments (0)
In a civil copyright infringement claim, many users of copyrighted material are surprised to learn that once the copyright owner has demonstrated that it owns a copyright in the work, the burden shifts to the copyright user to demonstrate that it had the right to use the......

When to Buy vs. Uninstall in Software Audits

Rob Scott  Comments (0)
One of the most common mistakes I encounter in software audits is what I call the post-effective date software buying spree. The buying spree occurs in response to a letter from a publisher or publisher's attorneys requesting a self audit. Many clients are discouraged to......

Top Tips for Improving Outcomes for IT Transactions

Christopher Barnett  Comments (0)
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......

Litigation Risks of Ignoring Software Audits

Keli Johnson Swan  Comments (0)
Software audits are a means for software publishers to enforce and regulate use of their copyrighted software, and publishers regularly outsource enforcement of their copyrights to law firms or entities such as the BSA| The Software Alliance (“BSA”) or Software &......

Adobe Audit Demands Can Be Burdensome

Christopher Barnett  Comments (0)
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......

Trust, But Verify with Third-Party Software Vendors

Christopher Barnett  Comments (0)
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......