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Channel warned on licensing

Channel warned on licensing

A financial services firm has warned the IT channel to improve the reporting of software licenses. In a recent study on the selfreporting economy, KPMG claimed most software and storage licensing agreements were based on trust. It estimated these were worth upwards of $US300 billion globally.

According to the findings of its study, up to 70 per cent of self-reported statements were incorrect. KPMG attributed the failings to misunderstandings, mistakes and occasional fraud. The firm suggested many suppliers were afraid to push stricter auditing reports for fear of damaging customer relationships.

The growth of virtualisation and a trend towards more complicated software licensing agreements meant matters would only get worse, KPMG information, communications and entertainment partner, Julie Fahey, said. Emerging issues that could affect customer relationships include increased digital delivery of software and stricter contract compliance. "In the world of people going to enterprise licensing and using outsourcers, suppliers are losing transparency in terms of their direct relationship with the customer and the way in which the customer's IT is being used," she said. "This has a direct impact on how they are complying with their licensing agreements."

Fahey said suppliers were ultimately responsible for managing usage, as well as keeping customers abreast of licensing terms and conditions. She advised resellers to hit customers with an early and professional breakdown of processes.

"If you have an ongoing relationship with a customer, showing a clear understanding of what that contract means and what review processes will be needed is a very important message," she said.

"Doing a compliance audit down the track can be disruptive to a customer relationship if it's not included as part of the services management agreement. It is important suppliers have that discussion upfront and agree on what processes will come in when."


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