Software licensing and how it affects your business

Software licensing and how it affects your business

If you run a business you will at some point need to buy software.

It’s important to purchase the correct license and software for your business needs and by doing so, it will keep you on the right side of the law. Reviewing different licensing options may even help save you money. Multi-user license packs can often be obtained at a lower cost than buying individually.

It’s interesting to read some of the information which comes with the licence you are buying. For example Microsoft in most cases simply rent that license to you. As a business owner always try to understand what is allowed in terms of the agreement e.g. how many computers the software allows for and what uses they are for.

Consider any software license and/or copyright restrictions. Is it an outright purchase, or rental? How long does the license last? Does the license restrict  what the software can be used for?

Also look out for things such as product-activation, which requires you to verify you are running an authentic copy of the software before you can carry on using it.

It is very important to understand software licensing for anyone who uses it, but especially for businesses. The implications of not having the correct number of licenses could end up costing a substantial sum.

Microsoft or the Business Software Alliance (BSA), may contact the business and request a software audit. Microsoft performs two types of audits: Software Assessment Management (SAM) and Legal Contracts and Compliance (LLC).

For Microsoft’s Volume Licensing customers, it’s not a question of if they’ll be audited, but rather, when it will occur. The terms of the VL Agreements grant Microsoft the right to perform an audit once each year with thirty days’ notice. MS has implemented a policy whereby Select, Open, and EA customers should expect an audit at least once every three years. This may take the form of a self-assessment or an onsite audit. If the audit reveals unlicensed usage of 5% or more than they have licensed, the customer will be required to pay the retail price for all unlicensed products plus the cost of the audit.

Another aspect of managing software is that it benefits the company in more ways than responding to an audit. It’s not uncommon for companies to discover that they have paid (or are paying) for more licenses than they need. This may be a result of having fewer employees than originally anticipated, reduction in business, changes in technology, decommissioned equipment, or a number of factors.

By knowing exactly what a company has licensed and how it is being used, companies may be able to save money during their next true-up or license renewal. Since this can be a daunting task and the rules governing software licensing are very complex and always evolving, many companies may hire third-party licensing consultants to assist them in the process. These experts can not only assist the company in becoming compliant, but they may also ensure that the company is using the most cost-effective licensing model for their business needs.

Contact us on 01444 871200 for a friendly chat about how we can help provide all your software (& hardware) needs at an affordable cost:

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