Understanding the full costs of a software vendor audit

An interesting article in a recent edition of PC World outlined the true costs of a software vendor audit. In this particular case Oracle was taking on Mars, the confectionery company, and focusing on their use of VMware virtualization software.

Documentation, documentation, documentation

Two salient facts were clearly highlighted by this. The first is the frightening amount of documentation that Mars produced in an attempt to give Oracle the information it wanted for the audit. In this case it was over 230,000 pages!

To produce this level of documentation must have cost Mars many man-hours, hours that would have been better spent on business-improving activities. This, despite the fact that the costs of the audit are supposed to be borne by Oracle themselves. It is no wonder that in the end Mars took Oracle to court to try and get them to scale back their audit activities and minimize disruption to their business.

The hidden costs of virtualization

The other important lesson from this event was Oracle’s focus on Mars use of VMware. The whole area of virtualization and software licensing is complex and frequently misunderstood. At Certero we have seen an increasing tendency for software vendors to focus on competitive virtualization technologies when they are auditing, and Mars’ experience is no surprise.

So many organizations virtualize all or part of their environment without fully researching and costing the implications on their software licensing. The impact can be quite extensive if not managed in the right way. Microsoft quite clearly states, in its listing of the benefits of its own Hyper-V virtualization technology, that reducing software licensing requirements is not one of them.

So, if we can offer any advice on this sorry tale, it is the old adage that prevention is better than cure. Make sure you have a Software Asset Management (SAM) program in place that gives you full visibility of your IT assets. And, if you are looking at virtualization, make sure you understand and fully cost the impact of this on your software licensing compliance. The costs may outweigh the benefits of introducing the technology in the first place if not managed properly.