Recent years have seen an uptick in software audits, with more companies being asked to provide evidence of licensing compliance. This is largely due to the fact that organizations are now using more software than ever before, with an increasing number of employees working remotely.

Watchdog groups like the Business Software Alliance (BSA) and the Federation of Software Theft (FAST) serve the sole purpose of ensuring the protection of software vendors’ intellectual property. These groups and software vendors are dedicated to discovering and auditing non-compliant organizations every single day with little to no notice. According to Gartner, the likelihood of an assessment for a medium to a large firm over the next two years is predicted to be 40%, which is expected to rise by 20% annually.

But why do software vendors act in this manner? Simply put, the main motivator is money. Revenue from software sales fell when the American economy saw a downturn and software expenditures were slashed. Software vendors were forced to hunt for alternative income sources when these profits started to decline. Audit fines and penalties of several hundred thousand dollars to even millions of dollars appeared as lucrative options for these vendors.

According to the BSA, 25% of businesses that operate in the U.S. are non-compliant in some way, costing software vendors an estimated $6 billion in loss.

Enterprise Agreement customers also have the option to acquire Microsoft 365 Apps for enterprise Device SLs. In this scenario, a license is assigned to the device that will be used by many users who are not individually licensed for Microsoft 365 Apps for enterprise. These users do not even need an Azure Active Directory account, and anyone with access to the device is able to use the Microsoft 365 Apps on that device without any user-level activation taking place.

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SAP’s licensing has struggled to keep up with how customers have used the vendor’s technology in recent years.

Its per-user pricing model doesn’t account for the world of IoT, in which devices, applications and bots, not human workers, access the German software maker’s ERP systems, and do so much more often than staff would.

But customers had previously felt comfortable setting up such access, with SAP personnel aware of these connections without raising any issues, or any customers falling foul of licensing audits, according to the SAP User Group Executive Network (SUGEN), which represents customers.

However, after SAP sued high profile customers brewery Anheuser-Busch InBev and British firm Diageo, against whom it sought huge multi-million-dollar damages, for cases of indirect access, customers understandably grew worried.

Their cases typified indirect access use cases; Diageo enabled access to SAP’s ERP system via third-party software, Salesforce. The accusations against Anheuser are less clear, but SAP alleged that it accessed its systems directly and indirectly without appropriate licenses. Anheuser settled out of court with SAP in March.

SAP moved to address customer fears over indirect licensing by introducing a new policy in April to cover third-party access to its ERP and S/4 HANA systems, as well as taking steps to ensure the threat of audits isn’t used in sales negotiations.

The new pricing model for indirect access to SAP’s ERP applications, and its S/4 HANA suite of ERP tools, aims to bring SAP’s licensing into step with modern uses of technology – essentially, machine-to-machine interactions replacing a lot of human access to ERP systems.

After introducing some new licensing models some months previously, as of April SAP detailed a new licensing policy to account for IoT use.

Instead of following its per-user pricing model, this one differentiates between human access via SAP software and device or bot access to core ERP systems.

This new model charges for access on a per-transaction level (SAP calls it a ‘document’), where that transaction might be a POS transaction, an approved invoice or something else that requires accessing SAP’s ERP.

Due to a recent crackdown on unlicensed software, Finance needs to huddle with IT and make sure each and every piece of software being used by each and every employee has its own license.

Reason: Not doing so could cost you … to the tune of $150,000 per violation.

And the hunt is on for those who are violating, knowingly or unknowingly.

The Business Software Alliance (BSA) has ramped up enforcement efforts on behalf of software mega companies such as Apple, Adobe, Cisco, IBM, Microsoft, Oracle and Salesforce.

Here’s how to make sure you’re not exposed.