The words “license audit” are guaranteed to strike fear into the heart of any Oracle customer today. At best, going through the audit process is a hassle. At worst, it can result in an unexpected hit to the IT budget – even if you’ve been trying in good faith to play by the vendor’s rules.
Across the globe, CIOs are working to optimize IT budgets and reduce the burden of costly annual vendor maintenance fees. They want to focus on driving innovation and growth into their businesses. But like death and taxes, vendor audits are inescapable – typically occurring at least once every three to four years for Oracle. If your organization is not prepared, an audit could divert thousands, if not millions of dollars away from critical projects. Proving that you are in compliance and clearing up any problems can just be expensive and a drain on resources.
In today’s market, where new licensing revenue can be harder and harder to find, software vendors are likely hungry to find their next meal. Don’t throw chum in the water by being unprepared or uninformed about your software license rights and obligations. It’s wise to understand your risks in a vendor license audit and guard against them.
Many industry analysts estimate that a software licensee can expect an Oracle or other major vendor audit every three to five years. These vendor audits are costly, not just with potential non-compliance findings, but with demands on internal resources to support audit inquiries or vendor scripting requirements.
According to a study conducted by the ITAM Review, the average software audit takes more than seven months and consumes nearly 200 hours of IT department time. That is time that could have been spent creating efficiencies or innovation.
But vendor audits are not going away. Audits are proven to drive license sales revenue for vendors and can provide the vendor with leverage when they want to push a client to adopt emerging revenue streams like cloud product lines. Therefore, software licensees need to prepare themselves for the inevitable audit and, through this diligence, mitigate the risk of a license compliance finding and excessive demands on internal resources.
Many organizations think they are compliant with vendor license agreements and yet most of these organizations don’t fully understand the many licensing pitfalls that can ensnare even the most diligent of asset management teams.
So how does an organization implement a license compliance strategy that will successfully mitigate the risk of compliance findings in future vendor audits? Unfortunately, there is no silver bullet to eliminate all license compliance risk, but here are some best practices to reduce risk:
Assign a resource to manage licensed assets and asset consumption by internal teams. Require internal staff to submit change requests before modifying system configurations or software usage, including use of software option packs. SAM tools are a great resource for managing license inventories and even measuring license usage. However, these tools still require experienced license analysts to correctly manage license compliance positions.
The foundation of any Asset Management program is the complete accounting of license assets owned by an organization. Review vendor ordering documents and support quotes to identify current licensed assets. Maintain a record of licensed assets in a centralized location for easy reference.
Document all Oracle software implementations to accurately track where licenses are in use. All environments (Production, Test, Development) should be documented and make note of hardware CPU allocations to allow for accurate license usage counts. Some SAM tools offer a version of an Oracle Server Worksheet as part of their offering.
Evaluate the usage of all Oracle products and compare findings to the Oracle Server Worksheet and existing quantities of licensed assets. An accurate measurement and allocation of license usage can be challenging. Many licensees will need assistance from a qualified and independent license compliance firm to correctly assess their license compliance position.
Vendor licensing policies are often complex and can change with emerging technologies, and this makes it difficult for licensees to stay informed. The key is to be well-educated on the Oracle audit process, licensing concepts, and Software Asset Management strategies to better prepare internal resources and mitigate the organization’s risk in the event of a vendor audit.
Don’t wait until the jaws of an Oracle audit are closing on you — start your research today.
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