Software contracts are like political manifestos. They read well enough at the beginning, but as time passes the words don't fit the picture. What happens in reality rarely reflects what's written down on paper. If like most companies you haven't checked your software usage in a while, it's probably different to what you agreed with the vendor.
The Business Software Alliance last examined the use of unlicensed software in 2018 and found that over one in four (26%) of commercial software packages running on computers in western Europe was unlicensed. Getting your house in order can help you to avoid hefty fines and perhaps save money on your existing expenditure. Here's how to do it.
Start by auditing the licences that you've already bought from software vendors. The chances are that you're juggling a variety of licence types, which makes managing them even more complex. Vendors might charge you on a per-device or CPU basis, or via the CPU core (most CPUs have multiple cores). Per-core charges can fluctuate based on the type of CPU architecture you're using, which is one of Oracle's favourite tricks. Database licensing in general is more complex than most. You may also pay per user, which lets you use the software on multiple devices but ties it to a single person, or per network segment.
Then there's subscription-based licensing, which was becoming common even before cloud services went mainstream. The upside of these licences is the low barrier to entry. The downside is that you'll often pay more over time, especially if you're the kind of company to put off new software purchases until an application reaches the end of its support cycle.
Then comes the tough part: working out what software products you're actually using. Depending on the size of your business, this might be something you can do manually. Larger businesses will need to automate it using a software asset management system. This hunts down software and licences and pulls it into a database for further management, and it's a far better idea than a spreadsheet. It will give you more insight into your licence purchases and usage, with detailed reporting.
A software asset management system comes in handy during self-audits, which some software vendors insist that you do (unless you want them turning up with their own bean counters). Many of these systems also include help desk and support systems, or integrate with them, giving you an end-to-end system to understand exactly what's on an user's machine as part of the monitoring and troubleshooting process.
Once you've discovered what you're paying for and what you're actually using, it's time to match the two together and then find any discrepancies. You're bound to find some. If the error is in the vendor's favour and you're using more licences than you're paying for, then it's better to get ahead of the problem and negotiate a new arrangement immediately. If the error is in your favour and you're overpaying, then you can save valuable cash.
Don't make those adjustments without a broader rethink of your licensing strategy, though. This will probably be the first time that you've had all the facts to hand, and it's a great time to ask yourself some basic questions: Are there licenses that you can reallocate from one department to another to make up a shortfall? Is there any software that you can consolidate to avoid paying for the same functionality twice? Are you really using all the functionality of your software? It might be worth down-scaling some software to less functional versions to save money. And are you using the right licensing models? That subscription license might be milking your budget dry, and switching to a perpetual license that you refresh less often could help your bottom line.
At this point it's worth talking to departmental managers to find out how much they actually use the software that's installed on their machines. You might be able to reclaim some unused licenses and allocate them elsewhere or reduce your fees.
Getting your software licensing strategy in order will probably take some heavy lifting, but the rewards are twofold: there are probably savings to be had, and you'll also be able to sleep more peacefully at night knowing that the software police aren't going to come after you with punitive fees. That has to be worth giving this task the attention it deserves.