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Microsoft licence cops kick in TWICE as many customers' doors as rivals

30,000 companies face Redmond audit, says analyst

Internet Security Threat Report 2014

Microsoft audited far more customers on software licensing than its rivals managed during 2012 - and Redmond is expected to turn the screws further over the next two years.

Redmond’s compliance troops swooped on 51 per cent of enterprises and partners polled for the 2012 Software Pricing and Licensing Survey by IDC and sponsored by Flexera Software.

Microsoft audited nearly double the percentage that Oracle checked: Larry Ellison's company knocked on the door of a mere 27 per cent of the customers. IBM was third on 24 per cent, with SAP and Adobe trailing behind.

As a result of the audits, 45 per cent of the survey's respondents paid up to $100,000 to settle unlicensed use of software, while 19 per cent paid between $100,000 and $300,000 and 15 per cent $1m and $5m. Four per cent, the smallest group, paid more than $10m to the software companies.

Software Licensing Advisors, a Microsoft licensing expert, has warned users that they should expect more audits from Microsoft. The firm claims to have seen an internal Microsoft memo that states 30,000 companies will be audited in the next two years.

Software Licensing Advisors warned customers to be wary of demands for payment coming from Microsoft during that time. In an October blog post here, the firm alleges that sales teams are being given unreasonable targets to perform by management:

According to the consultant, Microsoft is calling the audits Software Asset Management (SAM) engagement. "But make no mistake. You’re on track for an audit, and over the course of that audit you may be asked to pay money to comply with licensing rules that are made up on-the-fly as we’ve experienced recently," Software Licensing Advisors wrote.

“We have encountered numerous cases where this pressure has led to desperate behaviors that challenge integrity at all levels. Microsoft will demand compliance payments for alleged breaches of user rights or contract language that, on deeper examination, is unfounded, in order to achieve untenable sales goals.”

The consultant claims it has encountered three cases where Microsoft sought more than it was entitled to on an audit, and claims that it "turned back" claims totaling $1m.

Software Licensing Advisors said Microsoft’s opaque and complex licensing makes it difficult for customers to decipher compliance.

The Register asked Microsoft to comment on the cases cited by Software Licensing Advisors and respond to its claims. Also, we asked Microsoft to confirm whether audits are being used to drive growth, whether targets are being set by Kevin Turner, and if the goal is for 30,000 companies to be audited during the the next two years.

Instead, a Microsoft spokesperson issued a short statement saying the company's Software Asset Management offering is not an audit "despite claims to the contrary from some software licensing analyst firms".

The spokesperson called Microsoft's Software Asset Management something to help companies achieve ROI and simplify their licensing management.

"Like most enterprise software vendors, Microsoft audits a small percentage of its customers annually," the spokesperson said.

The IDC 2012 Software Pricing and Licensing Survey drew responses from 334 individuals from enterprises, software vendors and device manufacturers, with 45 per cent drawn from the US, 33 per cent from Europe and 7 per cent from Australia. More than half had revenue of more than $1bn. You can read the report here (warning: it's a big PDF). ®

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