Most organizations are accidental software pirates

Software piracy

A majority of enterprises are using software that they've unintentionally failed to pay for according to a new report by Flexera Software prepared in conjunction with IDC.

The report reveals, among other things, that 85 percent of organizations are out of compliance with their software license agreements. In addition 63 percent were audited by their software vendors in the last 18-24 months (58 percent by Microsoft, the most aggressive auditor), and 56 percent were handed bills to regularize their licenses.

"Software license audits are a legitimate way for vendors to ensure they're getting paid for their software that’s actually being used. However, CFOs can be unaware of software contract provisions permitting these audits, which can result in an unexpected budget shock when IT staff present them with a true-up bill," says Amy Konary, research vice president -- software licensing and provisioning at IDC. "The cost of these true-ups can be significant, so CFOs should take the necessary steps to reduce their risk by implementing software license management processes and technologies to help ensure continual compliance".

All of the big software vendors use audits as a means of capturing extra revenue from non-compliant customers, but the report suggests that some are more aggressive than others. Microsoft is the most active with 58 percent having been audited by the company in the last year. Over the same period 29 percent report having been audited by Adobe, 23 percent by IBM, 21 percent by Oracle, 12 percent by SAP and 8 percent by Symantec.

Of the accidental pirates, 42 percent say that more than 10 percent of their software spend is associated with applications that are out of compliance.

"Software vendor audits are a fact of life today, as are the large checks CFOs are writing to their vendors to pay unbudgeted true-up fees," says Jim Ryan, Flexera Software’s Chief Operation Officer. "Best practice processes and technology are being implemented by prudent organizations to help ensure continual software license compliance. With these reasonable measures now so readily available, IT managers should no longer have to present their CFOs with six-, seven- or eight-figure true-up bills".

The report is available to download from the Flexera website and you can see an overview of the findings in the infographic below.

Piracy infographic

Image Credit: Feng Yu / Shutterstock

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