IT managers under pressure to audit software

Adding to the oft-referenced list of things IT managers cannot avoid, including death, taxes and system crashes, software makers and industry watchdogs have identified yet another duty not to be overlooked – software audits.

In an effort to reduce the amount of unlicensed, or pirated, software running on corporate desktops and servers, the Business Software Alliance (BSA) and software vendor Microsoft Corp. are taking steps to encourage small and medium-sized companies to better manage the programs that end up on their computer systems.

“The bedrock of all this is: Do an audit,” said Anne Kelley, a senior attorney with Microsoft who specializes in anti-piracy efforts.

The BSA, an industry trade group representing some of the world’s largest software vendors, has been increasing its efforts to get corporations to investigate the software running on their computers and identify products that are not covered by an adequate license. On Monday it launched its latest “software truce” campaign to allow businesses to self audit their systems and report violations without facing penalties. Its Web site is filled with tips and tools for managing software.

“We really are about trying to get business to simply add software management to their corporate checklist,” said Bob Kruger, vice-president of enforcement for the BSA. “Many companies are used to paying their taxes, and obeying EPA (Environmental Protection Agency) and OSHA (Occupational Safety and Health Administration) laws. We’re saying, ‘make sure you’ve got a system in place to manage software.’ ”

Properly maintaining corporate computers is an important part of an IT manager’s duties. With the fluctuation of employees and the added complexity of installing new computers at branch offices that can be spread around the world, rogue versions of software often find their way onto a desktop or server. Likewise, some companies may be paying for more versions of a software product than they actually use.

Microsoft and the BSA say they can offer tools and assistance to help IT mangers create the policies and procedures necessary to stay within the law and within their budgets. Software audit tools, for example, are available for free download from the BSA and Microsoft’s Web sites. “The audit tool is really designed to tell you what software programs you have installed on you computers,” Kruger said. “In addition, you’ve also got to go to your file cabinet and make sure you have licenses.”

In addition to awareness programs from trade groups like the BSA, Microsoft’s legal department continually sends out letters to its business customers asking them to conduct internal software audits. While those in the industry say it is a key part in reducing the billions of dollars lost every year to software piracy, some businesses haven’t reacted well to what they see as Microsoft’s invasive attempts to police its own customers.

“Being in the software business, I have no problem with licenses and no problem with paying for licenses,” said Bill Campbell, president of software consulting and services firm Celestial Systems Inc. of Mercer Island, Wash., who has received such letters from Microsoft at his company. “But I think that this is a real heavy-handed approach.”

Microsoft’s Kelley noted that IT managers within small and medium-sized companies often need to be nudged into initiating good software management practices. “We understand that the IT manager is stretched, especially in medium-sized businesses,” she said. “At the same time, they are in a unique position to determine whether a company is following the law or not.”

The law in these cases is that companies must have a license for every piece of software that runs on their computers.

“On the one hand Microsoft is certainly within its rights to make sure customers are using licensed software and not pirated versions,” said Dan Kusnetzky, an analyst with International Data Corp. “But I’ve heard from some companies that they feel Microsoft is not doing this to make sure customers are licensing-compliant, but to find ways to get more money out of small businesses.”

Microsoft’s recent licensing tactics have been partially to blame for this sentiment, analysts said. The company plans to do away with its popular “version upgrade” licensing option, which allowed customers to buy a license for a product such as Microsoft Office or the Windows operating system and pay a lower cost when upgrading to a new version. Instead, Microsoft is rolling out a revised policy called Software Assurance, where customers pay for a three-year license that keeps them up to date with the latest versions of software available. The company extended the deadline last week for when customers of its Open and Select licensing programs will be forced to switch to the new program.

This shift, combined with further plans to change the way it sells software to customers, will increase the cost some companies spend on Microsoft products by as much as 94 per cent, according to research from Gartner Inc.

Responding to other complaints that conducting audits could add significant costs to most companies, the BSA’s Kruger argued that audits will actually save companies money in the long run because IT managers will learn to better manage the software on their computers. Companies will often purchase more licenses than they are actually using, he said, and can save money by having an accurate inventory of what products they are paying for.

The audit will also benefit businesses with too few licenses. The BSA, which says it investigates on average three new businesses in the United States each day for possible illegal use of software, contends that getting caught with pirated software is much more expensive than purchasing licenses in the first place. The trade group, whose members include Adobe Systems Inc., Symantec Corp. and Microsoft, says each infringement can cost a company as much as $150,000 in penalties.

On Tuesday, the BSA said it had ended a dispute with New York-based eye-glass company Tura LLP, which agreed to pay $50,000 to settle claims relating to unlicensed copies of Microsoft and Symantec software programs installed on its computers.

“The law requires that people deploy software that is licensed,” Microsoft’s Kelley said. “If we can draw attention to the issue then we’re really helping customers.”

Microsoft Canada, in Mississauga, Ont., can be reached at The BSA, based in Washington, D.C., can be reached at

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