Businesses warned of software licensing clampdown

Businesses are under threat of legal action and compulsory audits as cash-strapped software suppliers take a tough line on software licensing.

Businesses are under threat of legal action and compulsory audits as cash-strapped software suppliers take a tough line on software licensing.

Software suppliers are giving businesses they suspect of breaching licensing conditions 30 days to prove their software is fully licensed, or risk legal action, claims Fast, consultants specialising in software asset management.

Legal letters from software suppliers can cause huge disruption for businesses, said Phil Heap, head of products and service at Fast.

Software suppliers have become keener to pursue suspected licence breaches in the downturn, and have been sending out warning letters and legal threats to IT departments, he said.

"If you have received a letter from a supplier and you choose to ignore it, you receive a second letter," he said. "The third letter will come from lawyers. The suppliers can bring in third parties to audit the software. That is difficult for companies if they have a third party going through their systems."

Most of the major software suppliers require businesses to prove their software is licensed within 15 to 30 days, but some are more aggressive than others, said Heap.

"Microsoft is softly-softly at the moment, but you still get other suppliers that call in organisations like KPMG to carry out audits on-site. Customers would not be given a choice."

Adobe, like Microsoft, is taking a softly-softly approach with businesses that may be under-licensed, but it has not been so proactive in giving businesses advice on software asset management, said Fast.

Fast service advises on software audits

Fast is offering a service to help businesses that receive a legal letter from a software supplier to audit their software, giving them tight deadlines to prove their compliance.

The SOS service, available to Fast members that reach the company's Gold standard of accreditation for software asset management, will provide up to 15 days' consultancy for businesses facing a software audit.

In an emergency, experts will help firms assess how much software they have, identify gaps in licensing and prepare a legally acceptable report for the supplier.

"We know what Microsoft and other suppliers need," said Heap. "They all have different requirements for proof of licensing. What Adobe considers proof of licensing is very different from Microsoft. Oracle is different again."

Fast also offers to help firms negotiate with suppliers if the IT department turns out to be under-licensed.

The organisation, which advises its member companies on software licensing, claims to be completely independent from the Federation Against Software Theft (Fast IIS), a policing body for software suppliers.

But it says it is having to work hard to explain the difference to businesses, which often confuse the two organisations.

"However much we tell people we are not the Federation Against Software Theft, there are still concerns that we are part of the federation or connected to them," said Matt Barnes, operations director. "Have we sorted this out? No, but we are trying to do that. We do talk to Fast IIS to make sure we are singing from the same hymn sheet."

It is possible, for example, that a company will call in consultants from Fast to help them deal with a legal letter from the federation. But no information passes between the two organisations.

"We have a mandate to develop software licensing education, but we work independently from the federation," said Barnes. "There is no way any information is passed between Fast and the federation. Whatever we uncover is totally confidential. It would undermine our company if it wasn't."

The Business Software Alliance has reported that the software industry lost $51bn to piracy in 2009.

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