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Getting outside help for software audits

Asia's awareness of compliance is on the rise with more companies seeking independent license audits, industry observers say.

SINGAPORE--Some companies in Asia are making sure they comply with licensing laws in their respective countries, by turning to external professionals to audit their software assets, industry observers say.

A Singapore-based brand protection and investigation services company TecBiz FRisMan noted that it has been getting more enquiries from businesses about its software asset management (SAM) services. The IT services company, which has offices in Kuala Lumpur, Bangkok and Taipei, develops and executes license compliance programs for software vendors, and certifies their customers on their compliance with licensing terms and conditions.

Kelvin Low, director of TecBiz, told ZDNet Asia: "We're seeing an increasing trend of people enquiring [about SAM] and footing their own bill to do it."

Part of the consulting service involves manually checking that customers' workstations contain legal software licenses, as well as making sure that these licenses comply with the licenses' terms and conditions, he said.

Low noted that in Southeast Asia, TecBiz is witnessing a growing trend of businesses recognizing the importance of software compliance. Large local companies as well as the local offices of multinationals form the bulk of these companies, he said.

One of TecBiz's clients, Golden Village (GV), is Singapore's largest cinema exhibitor. The company engaged TecBiz in late March to help manage its Microsoft Windows licenses under the Microsoft LicenseCare program. The initiative is a license management program under the Microsoft license compliance unit, and carried out by TecBiz which had designed the program.

On-site work began in April and ended within the same month.

Roger Lim, GV's IT manager, told ZDNet Asia that the company had prioritized licensing management even before the Singapore government imposed stricter rules to protect intellectual property rights. Before using TecBiz's services, it also conducted regular manual checks on its 100-plus workstations to make sure the company carried legitimate software licenses.

After the amended copyright law came into effect in January last year, Lim said GV decided to automate its entire SAM process. He added that the company felt that not complying with the law would be far more detrimental to its public image, than the cost incurred for the audit.

Low added that while many ISVs (Independent Software Vendors) offer software asset tracking tools, some enterprises prefer engaging and being certified by independent third-party service providers.

According to Low, TecBiz bases its certifications on industry-accepted best practices, incorporating standards such as ISO (International Standards Organization) 17991 and the Sarbanes-Oxley Act. The company's ISV (independent software vendor) partners include Adobe, Business Objects, Corel, and Microsoft.

Roland Chan, director of marketing at Business Software Alliance (BSA) Asia-Pacific, said that the organization has also observed that companies in Asia are becoming increasingly aware of the importance of software licensing compliance. But he could not comment on whether more are seeking external consultants to audit their software assets.

The BSA is an antipiracy trade group supported by over 20 software companies including Microsoft and Adobe Systems.

In Singapore, the BSA has seen a steady increase in attendance at SAM seminars it jointly runs with the IPOS (Intellectual Property Office of Singapore), he said, adding that participation numbers have steadily increased over the years, with over 1,500 attendees packing SAM seminars Singapore last year.

Chan said: "We can't comment on whether companies are engaging more external consultants, but we do advocate that companies conduct a software audit--be it a manual audit, or with the aid of software tools."

"We think with greater awareness of the need to audit their software assets, more companies will turn to audit tools and external consultants, in addition to [conducting] manual audits to ensure licensing compliance."

As GV's Lim highlighted, getting caught with unlicensed software can be a costly affair. BSA's Chan noted that a Singapore company arraigned for using unlicensed software reportedly suffered a "downtime loss" of about S$100,000 (US$62,500)--the result of going through weeks of police investigations.

"It also missed out on opportunities to bid in [customer] projects because of the negative fallout from the court hearing," he noted.

And sometimes, even law-abiding companies can get it wrong.

TecBiz's Low noted that, from the audit, it was clear that GV had previously "put in diligent efforts" for its licensing compliance efforts. However, his team found some "technical non-compliance to certain terms and conditions" of the licenses.

TecBiz then created a license cataloging system for GV, which allowed Lim and his team to manage the company's Microsoft Windows licenses electronically, both online and offline.

According to Low, Microsoft offers certain rebates to customers who take on the LicenseCare scheme. After taking the discounts into consideration, consultancy fees charged by TecBiz range from S$1,000 (US$625) for 10 machines to S$30,000 (US$18,750) for 400 machines, he said.

Meanwhile, GV's Lim said that although the SAM exercise in April involved only Microsoft licenses, he is encouraged by the experience to incorporate SAM for other brands of software, such as Adobe.