The push to move to the cloud has been resulting in some bad behavior by software vendors who want to get their customers to switch to cloud versions of their products.
Martin Thompson is the founder of the ‘Campaign for Clear Licensing’ and founder and editor of the ITAM Review. According to Thompson, the ITAM Review is a community dedicated to three different job titles: IT asset managers, software asset managers, and software licensing specialists. Essentially, those are the people most likely to be responsible for managing the risk and cost of software and managing it throughout its lifecycle.
Thompson said that the campaign was set up as a result of the behavior of some software vendors, who were essentially getting companies to pay up based on audits and vague licensing terms. “We set up the campaign just to raise awareness of what the vendors were up to and help people navigate around it,” said Thompson.
“A lot of the large software vendors are trying to transition all of their customers to cloud,” said Thompson. “Cloud is their future. Cloud is their strategic direction. And one of the means of doing that is to audit them.”
The software vendors are using their right to audit, which is stated in their contracts, to find something wrong with the software. Then the vendors will use cloud as a resolution to fix that issue, he explained.
The two companies he highlighted as examples were Adobe and Oracle. According to Thompson, Adobe was one of the first companies to switch over to a cloud-based licensing model where licensing is done by user subscription rather than individual product keys. In order to do this successfully, the company is using telemetry to see what usage is going on with different user accounts. If a user is logged in in multiple locations, Adobe will be able to tell that they are abusing the license.
Adobe has turned on customer monitoring by default in its latest release of Adobe Creative Cloud. Those that are aware of the issue commented on the forum post that they were okay with this because of the fact that they can turn it off. While it can be turned off, many users will not even be aware that this change has occurred, therefore they will not know they need to turn it off.
“Obviously not every company is going to be happy with that,” said Thompson. “If you can think of government departments in the US, for example, they don’t want things transmitting off their network about what they’re up to.”
Another example is Oracle, which was targeting local European locations of global companies to try to audit them locally instead of going to the global headquarters. This has been perceived as a way for Oracle to easily catch subsidiaries because those local locations will be less prepared for an audit than the headquarters would be. Many companies use international licenses for their Oracle products so this could result in customers being double-billed by Oracle.
According to Thompson, Oracle’s salespeople are commissioned five times more for cloud revenue compared to perpetual revenue. “They’re very very focused on pushing Oracle Cloud at any cost because their shareholders need to be shown that they’re moving the customers to cloud. And they’re using audits to drive that behaviour,” he said.
Having good software asset management is a good way to protect against behaviour like this, said Thompson. It is important for customers to have good visibility into what they have and what they’ve signed, Thompson explained.
Part of having software asset management is only giving management access to those few who are properly trained in the company’s best software practices. “If you just let anybody push out Oracle and install Oracle, you can run up six-figure license compliance issues in a couple of minutes. You could spin up an instance of Oracle Database Enterprise Edition, for example, and switch on all of the options and packs and database optimization and compression and run up millions of dollars of risk, unrestricted,” Thompson explained.
A spokesperson for Oracle declined to comment for this article.
Without good software asset management practices, companies will be at risk of being bullied by software vendors as in the examples above.