Getting to grips with the licensing laws

If your business is running on Microsoft products, purchased under an Open or Select licensing programme, the software giant can require you to undertake a software asset management review (SAM). It sounds scary and for some it can be.

As you might suspect, they are looking to help organisations comply with the conditions of their licence, typically ensuring your Microsoft software licences adequately cover the software you use to run your business.

But don’t think it’s just Microsoft that checks up on licensing matters.

Most of London’s councils use Oracle database software within their organisations, spending hundreds of thousands of pounds on licensing. Many of the councils have undergone a licensing audit from Oracle within the last year and the rate at which audits in general take place is increasing.

These audits also identify where organisations are spending too much on licensing, but typically a problem may exist when a business has grown and/or employed more people who all use the software in question, without amending their software licence with the vendor.

Volume licensing

Instead of licensing software ‘one piece at a time’, organisations often enter into volume licensing agreements with vendors – no CD for every machine any more.

A volume licence allows an organisation to install multiple copies of a software product on different machines, or allow every employee access to the software through use of a hosted or virtual desktop.

These licenses will come with restrictions, like limitingĀ the number of installations, limiting use only to the purchasing organisation etc. To the uninitiated, these arrangements can be overly complicated and some organisations will fall foul of the restrictions often through no fault of their own.

The myth

Our managed IT services support the growth and operation of organisations large and small. But it’s always a challenge dealing with small businesses and trying to help them understand the need for licensing restrictions that come with the likes of Office 365.

There is a myth that a single Office 365 subscription can be installed on 5 devices. So an organisations with 50 employees only needs 10 subscriptions, right? Wrong.

The confusion stems from the difference between ‘user’ and ‘device’. Each user must have their own subscription, but it can be loaded onto 5 devices, i.e., PC, Mac, tablet, iPad, phone. Of course the situation can be exacerbated by IT firms winning business by encouraging the use of one license by 5 different people using 5 different machines, in a bid to be cheaper than firms quoting the appropriate number of licences.

The review

Some organisations will risk running their entire operation on incorrectly licensed software, believing the chances of them being caught is minimal. However, the big software vendors are increasing the number of reviews they undertake and there can be big problems, in terms of both cost and reputational damage, for those caught deliberately circumventing the licence agreement.

If you get notification of a review, first check it really is from the software vendor it says it’s from. In the past, some of the more aggressive IT services firms have been known to use the threat of a review as a way to ‘sell’ their services and ultimately licences.

When a review identifies that an organisation has inadequate or inappropriate licensing, it will be given the opportunity to correct it. Fines and prosecutions are rare, but a route vendors have the right to pursue.

To ascertain your position, ask your IT manager or your IT services provider to supply a list of all the Microsoft (and other software) licences you have bought. Don’t forget all the other programmes and ways you may have acquired licences; boxed software, new with devices or even through different companies you might have bought or merged with.

Once you have a complete list, get in touch and we will help you create a complete inventory of the software running on all computers, devices and phones in your organisation.

If in doubt

Finally, we’ll reiterate again how important it is to speak to your IT supplier or support company about how to handle a Microsoft software asset management review. Quite simply, they’ll know the score and be able to guide you through the whole process.

We sort out licensing issues for many clients, who expect it as part of our managed IT services, but we’re happy to have a conversation with anyone worried they or their IT support partner, may have misunderstood the licensing process. Software licences aren’t that complicated, but without the proper advice you could end up spending more than you need to…or worse.

Matt Rhodes, Commercial Services Manager, Quiss Technology plc

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