Crayon warns of 'black hole of risk' in software audits

IT consultancy Crayon has commissioned a new survey through the venerably anal analysts at Vanson Bourne which warns that software application development shops should be prepared for software license audits to avoid incurring millions of dollars in fines and costs.

No, obviously not the purview, concern, remit and bug bear of every individual software developer, but in a world of cloud-centric service delivery and online application subscription, licensing is (unfortunately) becoming something that all programmers should have more appreciation of. 

Holiest of holies

Crayon has said that a ‘black hole’ of risk looms as almost half of firms are unprepared for the true cost of software audits.

Crayon commissioned Vanson Bourne to conduct over 575 interviews across US and Europe with IT decision makers, with responsibility for software licensing and IT asset management in firms with more than 500 employees.

Results from ‘Software Asset Management, Cloud Transformation and the Cost of Compliance in 2016: Enterprises exposed to a ‘Black hole’ of Risk’ indicate that nearly half of firms asked to undertake a software license audit by their software vendor were found to be non-compliant (46%). The report found that the average penalty for non-compliance with software licensing already tops USD$750,909 (£611,008).

With enterprises deploying an average of three software publishers’ products in their IT environments, they are running the risk of being audited three times a year and exposed to fines in excess of USD$2m (£1.6m).

However, just 32% of those polled reported that reducing the risk of licensing non-compliance was a goal. 

With 96% of respondents reporting that their organisation is imminently moving or planning to move software and infrastructure to the cloud, seven in ten expect the complexity of their software licensing to increase following this migration.

Teams off-task

To add to the problem, on average, 129 days are expended preparing for software audits, often taking IT teams off task. Just 12% of respondents’ organisations report having a dedicated software asset management (SAM) manager.

Commenting on the findings, Rune Syversen, founder and Crayon Group CEO has said that, “Rather than being the panacea for IT, the reality of today’s hybrid cloud environment is that some businesses appear to be significantly struggling with it. Vanson Bourne found that 67% of respondents who have adopted cloud services have seen the complexity of their software licensing increase. With multiple clouds and vendors, the options are often confusing as firms share data and resources across domains and providers.

These findings may indicate a reluctance to handle software asset management in-house, with 94% of respondents relaying that their organisation uses a third party software asset management (SAM) tool; 53% acknowledging that they already outsource at least part of their SAM programme and a further 29% planning to outsource in future. 

Software licensing appears to have a direct impact on cloud migration, with 72% of respondents pointing out that their organisation’s investment in cloud technology has increased following the deployment of a SAM environment.

Syversen follows up by saying that this all makes the concept of software asset management ever more difficult to manage in-house as IT wrestles with the demands placed upon it to optimise technology investments, whilst at the same time striving to be compliant with software licenses.

He asserts that this is why delivering a secure IT environment in the modern hybrid world further complicates the issue of SAM and software licensing for beleaguered CIOs and IT managers who are seeking specialist help in the quest for intelligent cloud optimisation and reduced total cost of ownership.