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Document Your Software License Compliance Philosophy

By September 25, 2011Article

If you sell software licenses, has your management taken the time to document your company view on software license compliance? If not, it may be time. Your views on compliance and the associated mechanism you choose to enforce compliance will affect top and bottom-line revenue as well as your customer experience.
The software market is certainly maturing and evolving when it comes to understanding richer and more nuanced views on software license compliance and enforcement. In fact, if you talk to different individuals within a single company, it’s enlightening to discover that many of them have slightly different views on compliance and enforcement, and they often describe their individual views in such a way that they make it sound like it’s the corporate position.
Within a single company, I hear such diverse positions as:

“We trust our customers and need to stay out of their way. Our enforcement behavior should just consist of providing some usage reporting that the customers and our sales force can use to have a conversation about pricing.”
“We can’t let our customers use software they aren’t entitled to use! If they don’t have a license to use software, then we should have an enforcement mechanism that shouldn’t let them use the software until they pay us!”
“We can just suddenly shut down a customer if they’re using our software and need additional capacity. For enforcement, we should have license technology that allows them to use some “over-draft” for a while, and then we should shut them down after providing plenty of messages.”

It’s good to hear such diverse views, because a single software company can sell to a variety of customers in different markets where the customer behavior toward license compliance varies. Just like products can be targeted to different market segments, so too can enforcement be adjusted to meet market needs.
However, such comments as the ones above underscore a more fundamental need. With such potential diversity of positions existing within a company, software vendors should take the time to write down their corporate compliance philosophy. This is a business exercise that should involve senior management, as both the customer experience and revenue are affected. By writing down the corporate philosophy, everyone can be clear on what the company believes about compliance, even if the philosophy acknowledges diversity of markets.
Such an exercise will be quite beneficial in terms of internal and external messaging about compliance, and as a way to guide investments in the selection and deployment of enforcement technology so that the corporate perspective is reflected.
Want to see a sample of a compliance philosophy? If so, let us know and we can send you a sample.
Cris Wendt is the Principal Strategy Consultant at Flexera Software.

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