The typical enterprise has almost a 70 percent chance of not being in compliance with its software-license agreements, and it has a 60 percent chance of having unlicensed software deployed.
These findings, from a survey of more than 350 IT professionals conducted recently by King Research, aren’t just troubling; they could spell big trouble for corporations, as software companies hurt by falling sales due to software piracy seek other sources of revenue.
One avenue will be audits on software license compliance.
When a corporation fails its license-compliance audit, it must delete the unlicensed applications and reinstall new, licensed versions from the software company. It also must pay the vendor for the amount of time it used its software without a license.
According to the Business Software Alliance (BSA), a copyright enforcement and lobbying group for the software industry, the U.S. software industry lost $7.3 billion last year to software piracy, an increase of $400 million from 2006.
The BSA is stepping up its efforts to track licensing violations. In April, it announced that judgments were entered against three U.S. organizations for breach of software-licensing agreements.
One is Coraopolis, Penn. custom computer systems distributor MD of PC, which agreed to pay $36,000 to BSA in April as part of a settlement following a suit filed by BSA members Microsoft, McAfee, Symantec and Adobe in the federal district court in the Western District of Pennsylvania.
MD of PC sold unlicensed copies of software from BSA members, according to the suit.
Stainless-steel plumbing-fixture manufacturer Acorn Engineering Co. in City of Industry, Calif, agreed to pay $250,000 to BSA to settle claims that it had unlicensed copies of Adobe Systems (NASDAQ: ADBE), Autodesk (NASDAQ: ADSK) and Microsoft (NASDAQ: MSFT) software on its computers.
Acorn also agreed to delete all unlicensed copies of software installed on its computers, acquire any necessary replacement licenses and to implement stronger practices for managing software licenses.
Meanwhile, Miller Automotive, a group of automobile dealerships in Van Nuys, Calif., agreed to pay $107,998 to BSA to settle claims it had unlicensed copies of Microsoft and Adobe software on its computers.
Miller had to delete all unlicensed copies of software on its computers and to implement stronger software-license management.
More audits to come
Corporations can expect additional audits, especially as BSA offers rewards of up to $1 million to whistle-blowers.
“Attachmate had a big audit recently, and we’re expecting to see more examples of this as long as we’re in this recession,” Terrence Cosgrove, a Gartner (NYSE: IT) senior analyst, told InternetNews.com.
Many companies will not make the cut: 56 percent of the respondents to the King Research survey said they either track license assignments manually or don’t track them at all.
Kace Networks, a maker of Kbox system-management appliances, sponsored the study. The Kbox appliance’s module and configuration-management database integrates license compliance with usage metering and management.
“A lot of issues haven’t been resolved in terms of how people negotiate license agreements when it comes to virtual machines,” Kace CEO Rob Meinhardt told InternetNews.com.
License metering and management not only prevents corporations from being in breach of agreements but also helps save them money.
“You may find you have more licenses than you need, and you can remove those that are not used,” Meinhardt said.
Next page: Iteration confusion
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Iteration confusion
Gartner’s Cosgrove said ensuring software compliance is not as easy as it sounds. “When you buy a particular product, there could be 15 to 20 iterations of its name,” he explained. “You could have Microsoft Office with different product keys or different service packs, or different versions of Office.”
Microsoft bought Asset Metrix in 2006, and that provides a cloud service for software inventory.
The service tells customers the different naming conventions used for software, and customers can store that data in their database and compare its inventory against that, Cosgrove said.
The dominant player in this space is Bit9, which has more than 6 billion records in its Global Software Registry product, Tom Murphy, the company’s company chief marketing officer, told InternetNews.com.
Bit9’s software-discovery application, Bit9 Parity, finds out what’s installed on an enterprise’s laptops, desktops and servers, and white lists applications by running them against the Global Software Registry.
White listing is an approach in which an enterprise draws up a list of approved applications it will run, and everything else is not allowed in.
Another player in software-license compliance is LANDesk, which Avocent (NASDAQ: AVCT) bought two years ago.
Appliances are a problem in the larger enterprises LANDesk serves because “they limit users to their capabilities and reduce flexibility,” Robert Naegle, LANDesk’s vice president of marketing, told InternetNews.com.
LANDesk makes the Management Gateway appliance, a pizza box server that sits outside the corporate firewall and creates Secure Sockets Layer (SSL)-encrypted connections to core services.
This is for companies managing users’ mobile devices, Naegle said.
