When talking about cost risk in software, many deplore the compliance problem being escalated by ever more complex licensing rules invented by the big vendors. In early days, you only had to count your users and look at the total you had licensed.

Experienced CIOs ask the question how to best circumvent the issue and to define a strategy that goes right to the point: the vendor’s hunger for revenue. They know that multi-billion software giants need to feed a huge crowd of sales staff and come up with creative ideas how to ask for more money. While there is not much new problems solved by software, auditing has become particularly popular after the 2008 economic melt-down and is effecting all companies who do not define a strong methodoly to resist to such ideas.

We have found three components to get to the highest savings:

1. Put new emphasis on the procurement effectiveness for better pricing to shield the baseline
   Get away from price-holds to price-dropping, from maintenance cap to maintenance freeze or decrease, from transfer injunctions to free resale of unused software. Besides such paradigms when looking at the terms, also optimize the real price by context-oriented benchmarking. Some providers, like License12, are even offering such capabilities via the web.
2. Track your entitlements over time and be rigorous about license migrations for perpetual licenses
   Re-naming and re-bundling has become a standard vendor practice. What happens with the entitlements that were associated with the old products, are we sure we do not loose them? Looking closely, you often find no better functionality in the re-named items but it breaks your monitoring capabilities. Who in all honesty wants to keep track with such details? But it is not only for marketing, it is for printing money, because by re-naming you are more likely to buy more and re-license entitlements you already hold, e.g. by changing the metrics. When the vendor offers you to migrate existing licenses, be very careful about the return!
3. Tackle the vendor compliance verification methodology
   Noone will question the vendor’s legitimate right to protect their intellectual property. But do vendors explain their intent when selling licenses at 10 different metrics in one transaction? What is the cost of ownership to keep tracking such licenses and is it fair to prescribe the monitoring vendor-based audit programs? And how about the confidentiality that may be at risk when running un-documented audit scripts? Who is auditing the auditors?
   

Cost-conscious CIOs should prepare their organizations to address these three tasks and to educate themselves in order to perform effectively with respect to the intense climate generated by software audits and their resolutions.