The Growing Risk of Software Audits

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The need to conform to software regulations is becoming a necessity for many businesses as the increase in software vendor audits is making it extremely risky not to. Larger organizations have always been a common target for software audits, however, now they are not the only ones in the spotlight. The Business Software Alliance is now targeting businesses of all sizes, which most recently resulted in the planting of a £10,000 penalty on a Lancashire-based building services engineering company for using unlicensed software. The increasing rates of software audits could be seen as a side effect of piracy rates rising in tough economic times, therefore, resulting in software vendors toughening up their stance on piracy in order to claw back valuable revenue.

growing risk software audits

To larger more established businesses, software audits are common practice and certain protocols will be in place to prohibit illegal use of software. Although, further research into the topic by the BSA has suggested that almost one in three small UK-based businesses have infringed the law through software mismanagement, giving the government all the more reason to audit small to medium sized businesses. The research was conducted in partnership with IDC and Ipsos Public Affairs, and around 15,000 computer users from a total of 33 countries were surveyed.

Despite the rise in software piracy, it’s still common practice that a business will initially purchase software legitimately with every intention of using the software within their rights. However, abiding by the guidelines & licence of that software is essential to avoiding misuse, and the BSA’s findings have shown that almost 78% of SME’s feel they need to be educated in order to do so.

The threat of a software audit is also increasing, so much so that software vendor audits are up 4% in the last year and rising. You would assume that with this increasing threat, processes would be put in place to deter decision makers from turning a blind eye and straying from the legal boundaries. This is far from the reality and many SME’s just ignore the matter; an unwise decision when considering the financial complications which can arise from this.

In order to protect your business from a software audit which could result in a hefty fine, implementing a comprehensive software asset management program is recommended. Investing in SAM can help any sized firm control their costs and optimize software licences across the entire organization. This helps a business identify what software a business is currently licensed for, where it is running and whether the licenses are expiring or have expired. Any established SAM solution should also improve software compliance and highlight areas of risk and overspend, effectively saving you money and making your organization run more efficiently.

SAM can often be looked upon as an expense, which can cause hesitation when deciding whether to implement it, but when looking at the potential savings from over licensing and the potential financial penalties they could face from misuse, it can often be a necessity within organizations. This is even more evident when considering the growth in cloud technology in the business sector.

Cloud computing is being adopted by many large and growing companies due to the efficiency which it creates once implemented. One of the main advantages of cloud computing is the ability to make certain software and operating systems available to employees anywhere with an internet connection. This means mass distribution of a program on many devices, which may be conflicting with licensing which the company currently has, resulting in misuse and piracy. With record levels of devices requiring licenses, this emphasizes the need to operate a comprehensive license management program, as taking control of your licenses is increasingly difficult and takes up time that could be better spent.

The growth in software audits is, quite simply, due to the lack of practical enforcement measures on the digital copyright laws. It’s all well and good critiquing and improving IP laws, but if the practical assessment of these laws isn’t improved, then the effectiveness of the laws will be blunted. This blunting of the law may be one of the driving factors behind the growing increase of copyright piracy and is evidenced when considering that 57% openly admitted to theft of software. However, what must be recognized is that with an increase in crime follows the increase in measures – it won’t be long till they’re knocking on your door. Obama is known to be leading the crackdown on intellectual property and said, when questioned on the increasing software piracy rates, “We cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy”.

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About the Author


Karl Young

Karl is a Content & Online PR Executive working on behalf of License Dashboard USA. Graduating with honors in Marketing and Advertising Management, Karl runs his own blog and enjoys creative writing.


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