In this blog post, we are going to dive into the world of software license agreements. If you’re a tech enthusiast, software developer, or someone who is just curious about the legal aspects of software usage, you’ve come to the right place. So, let’s get started and unravel the secrets of a software license agreement.

With tight IT budgets getting tighter, many Oracle licensees with Unlimited Licensing Agreements (ULAs) are tempted to consider an exit plan to avoid the pinch of rising support costs. But, often too late, they may discover that their Oracle contract could prevent them from making the jump as seamlessly as they’d like.

Most enterprises want to avoid expending unnecessary time, effort, and resources on licensing issues, so they can focus on maximizing value and results. Unfortunately, Oracle’s enterprise license agreements, and, more specifically, ULAs, typically require consistent oversight and proper management to ensure successful outcomes.

Oracle has a reputation of aggressively ensuring compliance with licensing terms, which many organizations may struggle to remain current as they revamp implementations, undergo M&A activity, and shift environments. That’s why it’s tempting to opt for a ULA in hopes of avoiding the possibility of Oracle licensing audits.

Oracle ULAs may not always be “unlimited” in the traditional sense. In fact, many Oracle licensees may find that over the life of the ULA contract, their needs may have changed. Those changes can consist of software programs your organization didn’t intend or plan to use but may need today and software programs your organization thought they needed but no longer use or plan to use in the future.

As the world becomes accustomed to cloud computing, licensing has become a major pain point for businesses whose costs continue to rise while they don’t see a requisite rise in value, says Braintree Managing Director Heath Huxtable.

He adds that managing the regret of licensing, as he puts it, lies in choosing to work with consulting partners who sell value-added services as opposed to license resellers.

“Let’s be honest, licensing is a major bugbear for businesses and the money being spent is just becoming more and more. That doesn’t mean businesses want to shop around for the cheapest license to do the same thing. In our ongoing interactions with dozens of customers, it is clear that businesses want value for money. You see, built into the concept of cloud computing is the assumption that just because a service is available immediately that you will consume it – this isn’t the case,” Huxtable explains.

He draws the analogy of someone going to a workshop to learn about the power of something like Microsoft Excel. During the presentation, they will be shown the universe of what’s possible but in reality, they will only use a fraction of that.

“In reality, the user comes back down to consuming about 20-30% of the functional use of the product, yet they pay for the full product. This is what leads to frustration. This is why it is crucial for a partner to conduct a license audit when working with a new customer, to gain insights into exactly what has been bought and what is being used,” he says.

A New Jersey man pleaded guilty today in the Western District of Oklahoma to participating in a massive international scheme to make millions of dollars by selling pirated business telephone system software licenses. The entire scheme allegedly resulted in the sale of software licenses with a retail value of over $88 million.

According to court documents, Jason M. Hines, aka Joe Brown, aka Chad Johnson, aka Justin Albaum, 43, of Caldwell, conspired with co-defendants Brad Pearce and Dusti Pearce – who jointly used the identity “Terri Jenkins” – to commit wire fraud. The scheme involved generating and then selling unauthorized Avaya Direct International (ADI) software licenses, which were used to unlock features of a popular telephone system used by thousands of companies around the globe. The ADI software licensing system has since been decommissioned.

Avaya Holdings Corporation, a multinational business communications company headquartered in California, sold a product called IP Office, a telephone system used by many midsize and small businesses in the United States and abroad. To enable additional functionality of IP Office, such as voicemail or telephones, customers had to purchase software licenses – which Avaya generated – from an authorized Avaya distributor or reseller. Avaya used software license keys to control access to Avaya’s copyright-protected software and to ensure that only customers who paid for the software could use it. In addition, Avaya required that each software license on an IP Office system be associated with the system’s Avaya Secure Digital (SD) card – a small flash memory card with a unique serial number that plugged into the IP Office manager computer – which the end user had to keep in its possession to use the licenses.

Hines operated Direct Business Services International (DBSI), formerly known as Dedicated Business Systems International, a New Jersey-based business communications systems provider and a de-authorized Avaya reseller. He bought ADI software license keys from Brad and Dusti Pearce under his own name and also using an alias, Joe Brown, and then sold them to resellers and end users around the globe. Brad Pearce, a long-time customer service employee at Avaya, allegedly used his system administrator privileges to generate those keys without authorization, creating tens of thousands of them that he sold to Hines and other customers. Brad Pearce’s wife, Dusti Pearce, is alleged to have handled accounting for the illegal business. Hines was by far the Pearces’ largest customer, buying over 55% of the stolen licenses, and significantly influenced how the scheme operated. In fact, Hines was one of the biggest users of the ADI license system in the world. As a result, Hines reaped millions of dollars from the fraud.

Hines pleaded guilty to conspiracy to commit wire fraud. As part of the plea agreement, the United States has agreed not to advocate for more than five years in prison. The court has not yet set a sentencing date. Pursuant to the plea agreement, Hines must forfeit a money judgment of at least $2 million as well as make full restitution to his victims. A federal district court judge will determine any sentence after consideration of the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Robert J. Troester for the Western District of Oklahoma, and Special Agent in Charge Edward J. Gray of the FBI Oklahoma City Field Office made the announcement.

The FBI is investigating the case.

Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Julia E. Barry and William Farrior for the Western District of Oklahoma are prosecuting the case.

After announcing record revenues in Australia and the sacking of up to 200 staff in recent months, Microsoft has moved to snare a 9% increase in the cost of licencing their software.

The shock move comes as businesses struggle to manage costs and rising interest rates on loans and mortgages as well as manage a workforce who want to work remotely.

Inflation is only 6% in Australia with Microsoft accused of price gouging Australian business.

In a statement sent to ChannelNews, the big US software Company who had profits last year of $132.4 million in Australia on revenues of $6.3 billion claims that from 1st September 2023, Microsoft will increase Australian dollar prices by 9% for both Cloud & On-Premises licenses to align with global pricing.

This covers services such as Microsoft Office, Project Manager or the likes of Dynamics 365 as well as a host of other Microsoft software services.

Microsoft resellers including the likes of Telstra and Brennan IT are telling customers who use Microsoft services that if their licenses are under an annual commitment, current pricing will remain the same throughout this period (regardless of whether you are billed monthly or paid upfront).

The price increase of 9% will be applied at the renewal of the commitment period.

If a license is not under an annual commitment (i.e., month to month with no committed term), the 9% increase will be applied from 1st September 2023.

There are several license types that will be affected, including NCE & Legacy CSP Cloud Services, as well as Open Value, Open Value Subscription and other On-Prem licenses claims Brennan IT.

Microsoft PR has not commented on the move or issued a press release.

A new report has uncovered the alarming figure that businesses are wasting every year on unused software licenses.

Surveying six million customers spanning nine industries across 12 regions. Nexthink (opens in new tab) looked at over 30 popular software tools and uncovered that 50% of all licenses were not being used.

The cost for the unused licenses alone was said to be putting a $45 million drain on the companies every single month, which each year adds up to almost $537 million worth of wasted software.