Protection from Software Publishers Ripping You Off

Nobody likes to get ripped off. When it comes to software licensing, it seems to happen all the time. The Campaign for Clear Licensing (CCL) also agrees. That’s why the not-for-profit's goal is to take on unfair licensing practices while simultaneously educating businesses on what shady licensing practices we need to be on the lookout for.

One of the primary arguments the CCL maintains is that licensing models are overly complex with the purpose of intentionally confusing the end-customer. The concept behind the deception is two-fold. First, they hope to snare new customers into spending more money than they truly need on licensing because they misunderstand what they truly need. The second tactic is to gain additional profit from existing customers. Here, software company’s conduct post-purchase audits to penalize misuse to squeeze additional revenue from their unwitting clients. For anyone that is involved in enterprise IT, licensing structures from even the biggest and most popular software publishers can indeed be complex to the point of absurdity.

It does make one pause and consider why a software vendor would want such confusing licensing terms. Clearly, it's not for the betterment of the customer.

Cloud computing and virtualization are two common areas where customers run afoul of license restrictions. In many cases, it ends up costing a significant amount of money to correct. Restrictions including who owns the data center can come into play. Many license agreements state that only the business entity that purchases the license has the right to use it on their own hardware. Thus, spinning up the software and attaching a license in a third-party maintained IaaS or PaaS data center may technically go against the license agreement.

Virtualization can also cause major issues with licensing. Some software is restricted to the number of times it can be “moved” from one server to the next. Other licenses are explicitly tied to the hardware it was purchased with and cannot be moved. These outdated models go against the flexibility and scalability of virtualized data centers.

License restrictions mean little if the publisher can never verify that you used the licenses inappropriately. This is where the software license audit comes into play. Easily the biggest license headache for software customers is that the vendor will conduct aggressive audits, determine that they have been improperly using their licenses in one way or another, and demand compensation. Often, the end customer was not intentionally misusing their licensing. Instead, it was a simple misunderstanding due to the complex nature of how the licenses are structured. But to the software publisher, that doesn’t really matter.

A more appropriate licensing approach would be to simplify and streamline licensing models so that IT departments better understand usage rights and ultimately reduce the risk that an audit will result in monetary penalties. Most enterprise IT leaders fully understand the desire for software publishers to actively protect intellectual property (IP) using audits. But if the publisher is seeking to trap customers into purchasing more then what they need -- or hit customers with penalties by willfully clouding licensing agreements -- this practice goes against what most consider "fair-play".

That’s why the CCL is not only pushing software publishers to simplify and better clarify license models, they are also seeking that publishers adhere to a code of conduct that outlines appropriate audit guidelines publishers should adhere to. The idea is to allow vendors their right to perform audits, but to also put limits in place that help protect customers from overly demanding requests and timelines.

Beyond simply waiting for the software industry to clean up their act, there are a few ways that customers can better protect themselves when purchasing software. For example, never trust the spoken word of your software sales representative. Some will say anything simply to “lock in” a deal. That includes lying about how you’re allowed to use their software. Unfortunately, this means you’re going to have to read the fine print. Even better, have an attorney that specializes in IT and licensing matters review the license for you. They can then explain the agreement in a way you can better understand.

The other key component in protecting your company from software publishers attempting to rip you off is to maintain detailed records of where your software is deployed, by whom and for what purpose. This documentation will go a long when if an audit were to ever occur. The publisher must make the case that their software was used in a way that went against the contract. By having documentation regarding business use, you won’t be wasting time turning over stones to figure out where the software has been deployed.