We are always talking on this blog about the BSA and the importance of software licensing compliance. Most people (you can substitute the word “people” with “company”) probably think that this is something that would never happen to them, shrug it off, and continue on as usual. Well, here is $50,000 reason to change your mind.
Nels Consulting Services Inc., a 65-person office in Canada, was investigated by the BSA in September of last year over pirated MS and Autodesk software. A few weeks ago, after a year-long probe (and legal fees) the company settled with the BSA for $50,028.
They have no idea how they “got” on the alliance’s radar, nor were they expecting it. They faced huge fines because they had thrown out receipts for their software that were older than 7 years old. They kept everything from the boxes to the CDs, but those don’t meet the requirements for a proof of purchase. Other violations came from employees installing unlicensed programs they had brought from home.
The Nels’ fine is relatively inexpensive compared to others the Alliance has levied.
Keep your receipts, and keep an eye on every piece of software being used by your employees. It should be part of your software asset management plan. And, if you don’t have one, you could be making a very expensive mistake.
I love the fact that good ol’ Larry is not afraid to say what he thinks and someone is finally calling it like they see it. And, he isn’t quaking about Open Source either.
Ecotec - Economic and Technical Crimes Suppression Division - in Thailand has been urged to crackdown on software piracy by the BSA. It’s not just here in the states that audits are on the rise, but overseas companies are feeling it too. The crackdown will begin this month, and the organization will offer rewards up to 500,000 baht for tips of unlicensed software use.
According to an IDC Study on the Economic Benefits of Reducing PC Software Piracy released in January “A 10 percentage point reduction in Thailand’s PC software piracy rate would generate 2,100 new jobs, an additional US$1 billion (approximately 34.5 billion baht) in economic growth and more than $55 million (approximately 1.898 billion baht) in additional annual tax revenue.” That’s money you had better believe they are going to want to claim in the coming year!
Between January and August this year, police raided 39 companies from numerous industries, including manufacturing, design, automotive component production, plastics and packaging.
BSA has infiltrated Canada, Malaysia and The UK recently as well proving software companies are very serious about piracy across the globe.
In the new age of bloggers and social media, how they thought they would keep this a secret is beyond me! A ZDNet reader sent in a tip after clicking on the link to purchase the product from Microsoft and got the following message:
“We appreciate your interest in SLP Services, however we are currently not taking any new orders at this time. Current customers will continue to have access to the service and support for the SLP Services product through our SLPSInfo@microsoft.com email alias and our MSDN site.”
According to Microsoft, the product doesn’t currently fit with their business strategy and they are evaluating where it does/will fit, and if it will stay. I wonder how long current customers will have access. If I were one, I wouldn’t hold my breath.
Even Microsoft is worried about getting their bills paid these days. The company, who negotiated a $40 million software licensing agreement with WaMu back in 2007, has asked to be kept informed of the company’s bankruptcy filing in an attempt to make good on the contracts.
Along with dozens of other vendors, Microsoft is hoping to get paid, but it’s likely they will not in this case. Even Microsoft is hurting - I even heard that Bill Gates himself has lost a few billion in this year!
Similar to investing in the financial markets, mitigating software licensing risk is about gathering information. Here are 5 quick guidelines that will help:
1- Create a repository where vendor information is stored. Make certain that this includes a comprehensive database of what software is currently installed and where; how many competitive vendors are currently being used and all the paper work.
2- Identify any unsupported software. Costs for emergency updates or repairs to unsupported software can be very high.
3- If a new multi-core based licensing is available (such as with Oracle), you can re-evaluate your IT environment and consider consolidating existing installations to better align licensing with applications.
4- Align your IT procurement to coincide with software adoption cycles. By determining existing software needs with the roll out of new applications throughout the enterprise, the purchase can be aligned with usage; thereby reducing risk of over or under licensing.
5- Self audit twice a year to ensure that licensing remains current and compliant.
Oracle is getting into the hardware game with Hewlett-Packard. Introduced at Oracle OpenWorld, The HP Oracle Database Machine and the HP Oracle Exadata Programmable Storage Server are an advanced database server and a programmable storage server, respectively).
Both products address the issue of speed, specifically data transfer rates. Traditionally, servers begin to slow its transfer rates as the database exceeds the 1 terabyte size. And, as more data is stored, the speed exponentially decreases until it comes to a near halt. Both new HP Oracle servers solve the issue by using Intel multi-core microprocessors next to each disk drive. The processors act as a “filter” by searching each drive simultaneously when there is a data query and only the specific information requested will be sent.
The HP Oracle Database Machine has a grid of eight database servers with 64 Intel processor cores and a grid of 14 Exadata servers with up to 168 Terabytes of combined data storage. It comes with a pre-configured Oracle Business Intelligence Enterprise Edition tools and Oracle Real Application Clusters. Remember: If you use the EE or Clusters, you need to license it for use. The Database Machine is priced at $4000 per terabyte of storage, plus the database license cost. So, in a full configuration, this translates to $1.5 million to $2 million in software licensing costs. By the way, a very important point, The HP Oracle Database Machine only works with Oracle databases.
The Exadata has two, 4-core microprocessors with up to 12 terabytes of storage capacity, InfiniBand connectivity and 1 GByte per second of data bandwidth per storage server.
It’s not surprise that HP is the partner of choice as the two companies have shared a long, comfortable relationship. HP will manufacture, deliver and service the actual hardware, while Oracle will be responsible for the sales and system support.
HP Integrity customers will receive advantageous pricing on their Oracle software. Oracle will also extend licensing support for HP Virtual Server Environment’s partitioning technologies.
During the procurement process - whether it’s Oracle or another software vendor - it’s not about the discount you negotiate, it’s about HOW and WHAT you purchase. If you don’t ask the right questions, you’ll spend more. And, that’s not Oracle’s problem. It’s yours.
The reason for enterprise software varies with each enterprise. Therefore, it’s no surprise that your software investment may be vastly different from the one your direct competitor just made. However, don’t rely on your Oracle sales guy to know and understand all the nuances of your business.
The basic questions you need to ask during the software evaluation process are the following:
What’s your business’ objective(s)?
Determine what needs you have that can be solved with software and which software module best supports your need?
How much of the software do we need to purchase now (versus a year or more from now)?
How will the software procurement affect current and future Oracle licensing?
Who will be responsible for the management of Oracle’s software assets as well as other installed enterprise software?
