Software license audits are up!
Already in 2020, several software vendors devised their own medicine to fight the crisis. However their medicine came with side effects. The Register reported in “Apologies for the wait, we’re overwhelmed. Yes, this is the hospital. You need to what?! Do a software license audit?” some of their practices with existing healthcare customers:
“According to research from the IT Asset Management Forum, vendors have sought an uptick in revenue via audits of hospitals. In the study, 46% of organizations said they had experienced an increase in audit requests during the pandemic.”
If you are unfamiliar with the underlying intent and economic cycle of ‘audits’, the ITAM Forum provides an explanation:
“Audits are a common route for software publishers to increase revenue. So this behavior may be unsurprising during a recession as vendors face their own financial challenges. However, interrogating customers for even more money during their struggles in an international health and economic crisis does not demonstrate a spirit of partnership. Nor does it align with most vendors’ messaging to promote the overall good of our communities.”
Indeed, we do remember those exceptionally generous, extended free trial periods. These were created by the same vendors to keep your “Teams up and running“. That however, was the narrative in the early days of the crisis.
The usual suspects
The article in The Register reveals the culprits: Oracle, Microsoft, SAP, IBM. The usual suspects. Once again, these statistics underline the persistence of their business model and culture. Because no longer audits are about comparing the number of licenses used versus bought. To illustrate this: already more than a decade ago Gartner started a thriving consulting practice: “How to deal with the big four?“. They packaged part of their advice in an interactive workshop format. It should not come as a surprise that audits are the ‘popular’ item on the workshop agenda. Because they provide the participants an opportunity to clear their throats and to join in a lively discussion with their fellow sufferers.
So, what can we expect going forward? Again, the ITAM Forum explains:
“Software publishers are stepping up recruitment into their license management and audit teams for 2021. The repercussions of the pandemic slowly filter through the economy and to publishers’ sales numbers and share prices. Therefore everyone should anticipate more desperate behavior from certain publishers.”
Culture eats cloud for breakfast
Leopards never change their spots. Expectations that the pay-per-use characteristics of their cloud offerings will wash away their spots, will prove illusory. Rather the opposite, according to independent Microsoft-research firm Directions On Microsoft: “Moving to Microsoft’s cloud doesn’t eliminate compliance worries. It enforces them“.
But why; Microsoft’s sales numbers and share price are not suffering!? Nor is anyone expecting this to happen. Nonetheless, this conclusion makes perfect sense. The license based business models are extremely addictive. Simply because they are incredibly favorable to everyone involved. To the sales staff, channel partners, the executives and to the investors. Already, there are signs that the cloud is inspiring the design of new ‘fish traps’. Not long ago The Economist asked around and found some significant lines. You can read about these in our blog post about Microsoft’s punitive policies for its cloud.
It is feasible to avoid these side effects
Fortunately, there is an alternative. When you shift to the cloud, this is also the appropriate moment to consider how you can avoid such costly side effects in the future. After all, this transition is the time for making new architectural choices. It is the best moment to take into account the vendor’s ‘DNA’ that you are likely to find in its cloud offering (again). Moreover, you should dig deep enough to obtain a detailed understanding how you can avoid new aggressive license tactics. For certain vendors they are part of cloud service bundles, terms and dependencies already.
Are you interested to discover how we can help you minimize these side effects? Get in touch and send us a message.
is assisting our customers to maximise the benefits of cloud adoption. With his background as a consultant and with 12 years as a CIO in large enterprise, he bridges the worlds of the boardroom and technology and helps implement cloud solutions at scale.
