Software Asset Management (SAM) Blog

The Business Software Alliance (BSA) has announced that it intends to invest in both enforcement and education activities in the second half of 2009. In addition to continuing with its regional licensing ‘clamp downs’ (which have concentrated on Glasgow and Manchester recently), the vendor-funded watchdog will also push a program it calls ‘SAM Advantage’.

This program will be trialled initially in Canada, the US and Australia before being imported to the UK before the end of 2009.

While many will appreciate the BSA’s efforts to complement its enforcement activities with preventatitve training, it is also possible that the latest program will be seen as uneccessary additional noise in an increasingly crowded SAM market. Many other vendors and SAM specialists already offer training - and while choice is undoubtedly a good thing, too many voices offering different approaches could lead to confusion (and therefore a lack of adoption) among end user organizations.

I found this article in Reseller News (New Zealand) very interesting. And while I agreed with many of the writer’s points, I thought the article would have benefitted from an exploration into the different types of ‘piracy’ that exist. Although I’m sure between us all we could come up with many more examples, three top-level ‘categories’ immediately spring to mind:

1. the individual user at home downloading through P2P (often rip-offs of legitimate software)

2. the organization buying applications at ‘too good to be true’ prices (often counterfeit)

3. the organization installing more copies of software than they have legally purchased

Personally, I don’t see how the BSA / Microsoft claims of US$55 million in lost revenues (in New Zealand alone - the global claim is closer to US$48 billion) are going to be recouped by addressing point 1 (and maybe even point 2) above – the fact is that the vast majority of home users, student and general skinflints can probably ‘live without’ the latest versions of Office etc. But I do believe that many organizations continue to use more software than they are legally entitled to – not because they are flagrantly disregarding licensing laws, but because they simply don’t have a handle on their software use. In many (probably most - it depends on who’s figures you trust) cases, organizations lack the necessary policies and technologies to ensure that all applications deployed on the network are accurately licensed.

In my view, this is where the vendors are truly losing money.

The interesting thing with software licensing, however, is that there are two sides to the coin (as it were). Our own research found that most organizations actually pay more than they need to for software – typically over-spending by as much as 20 percent per year because they do things like:

1. buy applications they don’t need (there might already be redundant copies on the network, for example)

2. buy applications through more expensive channels (buying off the shelf, instead of through volume licensing, perhaps)

3. fail to cancel or renegotiate maintenance and support contracts based on current application usage (we’ve seen examples of companies still paying maintenance on applications that were retired from use three years ago - evidence that IT and Finance often don’t talk to each other)

As such, software management is interesting mix of ‘swings and roundabouts’. On the one hand, vendors are undeniably losing revenues they are rightly owed – but on the other the end user organizations are already paying over the odds! The key, in my view, is to proactively establish what the organization needs in the first place and then manage it carefully to ensure that a) it’s delivering real value to the business and b) that the organization is paying a fair price for what it is actually using. The onus isn’t on the vendors alone, end user organizations need to take control of their own destiny. It’s what we like to call Software Asset Management (SAM).

Depending on your point of view, the Business Software Alliance’s recent likening of illegal software users to the increasingly-active Somali pirates has either earned the watchdog a lot of valuable column inches or seriously affected their credibility in the market.

It was perhaps inevitable that the comparison was going to attracts accusations of bad taste (or simple downright over-exageration) from the media, including the UK’s national newspaper, The Guardian and IT gossip site, The Register.

But it raises a fundamental question - what is the best way to describe the illegal use (some would call it theft, some not) of digital materials?

In the context of software licensing, compliance and - in its broader sense - Software Asset Management (SAM), the main cause of illegal use (within organizations, at least) is not so much a conscious decision to deliberately ‘pirate’ software applications so much as a systematic failure to manage software properly.

Richard Stallman, the founder of the Free Software Network reportedly prefers terms such as “unauthorized copying” or “prohibited copying” - and while these are undoubtedly accurate, they lack the impact of “piracy”. Stephen Dubner, author of Freakonomics, prefers “Dobbery” as an abbreviation for digital robbery.

Despite the inability to agree on a single term, or even the criticism levelled at the BSA for its attempts to equate digital piracy with recent events off the African Horn, the fact is that software vendors are still losing huge sums of legitimate revenue because organizations are not paying for all the software they use.

For as long as that is happening, there will be piracy / dobbery / prohibited copying / unauthorized copying [choose your own favorite!] to be clamped-down on by the vendors and watchdogs.

Of course, the aternate view on things is to lift the argument away from purely looking at under-licensing and start to focus on the positives that SAM can deliver to organizations… Research conducted in the UK last year found that organizations were, in fact, over-spending on purchasing and maintaining software by an average of 20 percent.

Maybe the way to get executives serious about managing their software investments is not to accuse them of being ‘pirates’ but instead ‘money wasters’?

The Business Software Alliance (BSA) has announced its latest licensing whistle blowing campaign, taking place in Tampa, Florida. The organization, which is funded by the world’s largest software vendors placed 72 adverts on Tampa radio stations offering rewards of up to $1 million for individuals who reported software piracy.

The scheme, titled “Know it, Report it, Reward it” is expected to lead to a number of Florida-based companies being investigated, with potentially-large penalties for organizations found to be using more software than they are legally entitled to.