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Half of all firms unprepared for the true cost of software audits

Study suggests that enterprises face a ‘black hole of risk’ by not being properly prepared for software audits

Half of all firms asked to undertake software license audits by vendors are found to be non-compliant, resulting in millions of pounds in fines, a new report suggests.

The report, published by analyst firm Vanson Bourne with backing from IT consultancy Crayon, warned that enterprises were exposed to a ‘black hole of risk’ by not being properly prepared for software audits. 

Crayon commissioned Vanson Bourne to conduct over 575 interviews across US and Europe with IT decision makers in firms with more than 500 employees.

The report found that the average penalty for non-compliance with software licensing was $750,909 (£611,008) and that 46% of the organisations surveyed had been found non-compliant in the past. However, just 32% of those polled reported that were actively working to reduce the risk of non-compliance. 

Software audits are becoming increasingly common. A recent study conducted by BDNA found that almost two-thirds – 61% – of enterprises have received a vendor audit request in the last 18 months, and 17% of those companies were audited three or more times in the same period.

Vanson Bourne asked respondents about key objectives over the next 24 months, and while improving IT efficiencies was viewed as the most common goal (61%), just 39% of said that they were focusing on a reduction in software licensing costs. 

Rune Syversen, founder and CEO of Crayon, said that hybrid cloud environments were adding to the complexity of licensing compliance.

“Vanson Bourne found that 67% of respondents who have adopted cloud services have seen the complexity of their software licensing increase,” Syversen said. “With multiple clouds and vendors, the options are often confusing as firms share data and resources across domains and providers.”

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