Software licensing can be fiendishly complicated even for the smartest CIO, and the consequences of getting it wrong can be very painful.
"If you, as an end user, are faced with trying to manage complex licensing agreements that are not manageable, you're staring down the barrel of an enforced audit," said Mark Flynn, the newly-appointed CEO of the Campaign for Clear Licensing.
"For that end-user organisation, that is a lonely place to be, and for the individual responsible for it, it's quite career-limiting," he said.
Analyst firm Gartner estimates that more than $400bn was spent on software worldwide last year, with between five to six percent of the total generated by audits.
"That can be a fractious, unpleasant exercise, where vendors go after end-user organisations, saying you're incorrectly licensed and you owe us more money," Flynn said.
The Campaign for Clear Licensing is a subscription- and event-financed membership lobbying body that plans to expand, with US and German operations starting within the next six months. The UK is currently recruiting members.
"We believe end-user organisations need effective representation because everybody wants to be legal, everybody wants to invest in software. But often licensing agreements are incredibly complicated. You often need a law degree as an IT person or a buyer really to understand them."
Flynn said end-user organisations often come unstuck because they don't fully understand the licences and can't manage them because vendors fail to provide clear directions on how to measure their product's use.
"It's always a surprise when they find they're not compliant, they're under-licensed. Then they get the poisonous situation where they're having to find unbudgeted spend — that might be hundreds of thousands or even millions," he said.
An absence of organised pressure from users has allowed software vendors to continue with their current licensing practices, he said.
"Unfortunately, it's been a bit of a divide-and-conquer story, where there isn't a body that provides a collective representation of the end-user community. That's the way vendors and publishers want it because they can just, on a divide-and-conquer basis, do what they want in terms of having complex licensing agreements," Flynn said.
"That might be simply because they're a little bit lazy because there's no pressure on them to make their licensing agreements simpler because people want to adopt their software."
Flynn said the CCL wants a positive dialogue with the software publishers, which should be interested to hear what enterprise customers have to say as a collective group.
"These [software vendors] are huge organisations with financial muscle behind them. The muscle that we have is the collective membership that we represent. If we are the mouthpiece for that collective, then vendors have got listen to what the issues or grievances and changes are that their end users want," he said.
"If they don't, then end-user organisations can look for alternatives. What we are not is an aggressive organisation that is looking for conflict. But it's important that if we have the muscle, which is our members behind us, then they will sit up and listen because it will impact their revenues, short term and long term, if they're not seen to respond."
As well lobbying on behalf of the end-user community among vendors, the CCL will also try to bring good practice by one vendor to the attention of others. Exposing bad practice is a powerful approach that the campaign will try to keep in reserve.
"That's got to be a weapon that you keep in your kitbag until you have to use it because you want to engage and be a positive force for change with that vendor. But if they choose to ignore it, then we can use that as a lever and tell the world about the bad and sharp practice that that vendor is using," Flynn said.
The arrival of the cloud is adding another level of complexity to already problematic situation for end-user businesses and will be at the forefront of the campaign's activities, he said.
However, the underlying problem remains the convoluted nature of licensing arrangements, whether on-premise, in the cloud or hybrid.
Not only do companies find it hard to calculate the costs and manage that complexity, the vendors' aggressive approach to auditing is damaging communications between provider and customer.
"End-user organisations are very wary about reaching out for help and clarification because that simply sets the alarm bells going at the vendor, who says, 'This is an auditing opportunity because this organisation isn't in control of our software'," Flynn said.
"They don't see it as an opportunity to help that customer. They see it as a short-term revenue opportunity to sting that customer. It really is a Catch-22. The end user won't reach out because of the complex licensing."
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