April 07, 2020

New Focus on Software Audits as a Result of Covid-19


As the Covid-19 virus continues to wreak havoc, governments around the world are urging companies to organise remote working for their staff – wherever possible.

While this is a positive development for public health and economic considerations, companies should be aware that migrating all employees to home working could create additional challenges in software license compliance. As it turns out, remote access is the easiest way to quickly become non-compliant with many software vendors.

Of course, everything depends on the specific licensing terms in place for each software product. But very often software legitimately licensed on a server, still requires that every user or device accessing this software product is also properly licensed with an appropriate user or device license.

This may not create an issue if all staff is able to work on properly licensed devices, such as company laptops. However, businesses who normally have their staff in an office working on desktop PCs, or accessing network file shares and intranet applications, or running applications that connect to an on-premises database, may not already be set up to have all or most of their staff working remotely. As a result, many of their staff are now remotely accessing corporate software assets via personally owned devices such as home PCs, tablets and smartphones.

The issue at hand is the result of the hybrid IT world we are currently living in. Partly based on cloud concepts where everything is on the internet and easily accessed from all kinds of devices, and partly based on traditional business networks with servers, locally installed software and desktop PCs. The licensing model for these two types of environments is different. And as a result, companies who license applications on a per-user cloud subscription are now much better placed to continue working throughout the Corona crisis than those with perpetual per-device licenses.

Software vendors are aware of the issues surrounding remote working and it is to be expected that they will be particularly diligent in auditing this area. In order to prepare for this, companies should perform an inventory of all their installed and remotely accessed software.

There are a number of Software Asset Management (SAM) tools available to partially automate the inventory process. But most inventory tools do not account for remote access , nor do they perform adequate analysis of virtual scenarios. As a result, companies will almost certainly require additional work to obtain an accurate and comprehensive usage assessment.

Once you have an accurate inventory of all applicable software, devices, and users accessing that software you’ll need to match this technical landscape with the contractual landscape in place. If you cannot demonstrate that everything has been properly licensed and purchased, you are at risk to be out of compliance and subject to additional license purchases and/or penalties.

Clearly when the dust settles software vendors are going to look, where possible, to exercise their audit rights against potentially delinquent customers to make up for the new business they seem likely to struggle to win during the pandemic.

If you have particular concerns in this area, please do not hesitate to contact us as we can help you in assessing whether the contractual landscape matches up with the technical landscape.


If you wish to receive periodic updates on this or other topics related to the pandemic, you can be added to our COVID-19 “Special Interest” mailing list by subscribing here. For any other legal questions related to this pandemic, please contact the Firm’s COVID-19 Core Response Team at FW-SIG-COVID-19-Core-Response-Team@mayerbrown.com.

The post New Focus on Software Audits as a Result of Covid-19 appeared first on COVID-19 Response Blog.

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