Software compliance costing businesses more: Flexera

Australian businesses are paying in excess of AU$1 million in unbudgeted fees as a result of being found for using software beyond licencing agreements.

Ninety-eight percent of Australian organisations are out of compliance with their licence agreements, putting CFOs on notice for accidental software pirates and unbudgeted fees from frequent vendor software licence audits, according to a new survey from Flexera Software.

Prepared jointly with IDC, the software pricing and licensing survey showed that over the last 18-24 months, 84 percent of Australian enterprises were audited by their software vendors — 60 percent by Microsoft — and in the same period 69 percent were audited twice or more.

Within that same timeframe, 51 percent report having been audited by IBM, 23 percent by Oracle, 17 percent by SAP, 16 percent by Adobe, and 14 percent by Symantec.

On a global scale, the survey showed only 63 percent of enterprises were audited globally in the last 18-24 months, and only 37 percent globally were audited twice or more.

Flexera Software APAC VP Tom Canning said the intensity levels of software audits are clearly much higher in Australia in comparison to the rest of the world.

"In one way it's surprising, but in another way you look at the Australian market and it's quite contained because you know who the major top companies are here, and they're mainly based in Melbourne and Sydney, it's easier to focus that kind activity here," he said.

As a result of these software licence audits, the survey showed 87 percent were handed bills — 65 percent of which were in excess of AU$1 million. Additionally, 29 percent said their bills were AU$5 million or more.

Canning said a majority of these cases however, particularly in Australia, are accidental software pirates where businesses are using software they have not paid for unintentionally, and is on the rise.

He continued saying that increasingly fluid IT environments created through a mix of mobility, virtualisation, cloud, and BYOD is making it difficult for organisations to manage their software inventory, and this is the cause of a lot of the accidental software pirates.

"It's really about getting caught with technicality, where you've used virtualisation on this type of hardware and need to buy licenses again, or you weren't suppose to use that software in the datacentre," he said.

"This technicality is what drives people crazy because if I bought 1000 licenses and I deploy 1500, then it's no big deal I should've bought them, but when it's the technicality of how it's deployed, then that doesn't sit very well with CIOs."

Canning advises organisations that to avoid future bills, they should check over their contractual agreements with vendors to ensure they're able to do "the things they want to do in the right way", and are compliant. At the same time, he said it's necessary to have an accurate software inventory view, which has now become "quite complex" because of all the multiple devices and virtual services, so it'd require organisations to "gather data from a lot source and then consolidate that data".

This study closely aligns to findings by the Business Software Alliance, which found  software piracy settlements reached an all-time high in 2013, with 16 cases settled for damage payments because they were found to be using BSA members' software without licences.