Unlicensed software can become a huge liability for an organization. BSA recommends considering software asset management for efficiency and cost-effectiveness.  

Unlicensed software is the new entry into the club of security disasters. Indian organizations seemed to have trapped themselves into this menace. The numbers of a recent survey conducted by IDC for BSA reveal the depth of the problem.

The 'BSA Global Software Survey' revealed that the rate at which PC software was installed without proper licensing in India was 60 percent in 2013. The commercial value of that unlicensed software totaled over Rs 179 billion. At the same time, only 33 percent of companies in India have written policies in place for the use of properly licensed software.

Use of unlicensed software only increases the complexity of the IT environment, according to BSA. The international trade group works closely with various industry associations in India to increase awareness among enterprises on the benefits of using licensed software. Seemin Qadiri, Director, Compliance Solutions, BSA Global, speaks about why companies should consider implementing software asset management (SAM) programs that follow internationally-accepted guidelines.

Why is software asset management important for enterprises?

Software is now an operational instrument of the company. If you're not managing that well, it's equal to not managing your HR well. For example, two people using two different versions of the same software won't be able to collaborate effectively.

Our study reveals that an organization has on an average $220 (Rs 13,200) of unused software. So software is a like a leaking tap in many organizations. It becomes a huge cost center just because it's not managed well. So organization go through something like an ISO standard or Verafirm certification and are able to optimize their spending. Therefore, organizations are now asking for a uniform way to manage software.

One of the companies that implemented a discipline around SAM told us that they were able to reduce the cost on software by 25 percent, leading to substantial saving in maintenance expenses.

Software vendor audit is an even more complicated issue for CIOs to deal with. How is BSA addressing this concern?

A major frustration of the CIOs is that a lot of their time is taken up by on-demand audits. There are multiple software vendors and each one of them can exercise their right to audit at any point.

Even if you're doing everything right, you still have to invest time to show the auditor the same. So we are working with the software industry to see what satisfies a software vendor when it comes to the usage of software in an organization. This helps avoid multiple audits.

We work very closely with the software asset management standards body of ISO. They already had a standard, which we formalized into a certification. We use audit partners such as KPMG, PwC, E&Y, and Deloitte. So if an organization meets the criteria that we have laid out, it means that a participating publisher will not audit you. We offer a two year forbearance from vendor audits for certified organizations.

If we go by your survey, a lot of organizations are sitting on a pile of unlicensed software. Adopting SAM would thus mean a huge upfront cost in terms of renewing the licenses. Do you think they will be ready to do that?

There certainly is a hesitation, especially among the 'not so matured' organizations in terms of opening a Pandora's box by adopting SAM. A lot of them are not ready to confess that they use unlicensed software. But the fact is the vendor audits have increased and they are more sophisticated in detecting customers sitting on a pile of unlicensed software.

The risk associated with unlicensed software is that organization has to pay the multiplying penalties. But the more matured organizations are aware that the whole system can be made more effective by using SAM.

But what are some of the evident returns on this investment?

There is an upfront investment involved, but there is very high value generated over a period of time. SAM helps organizations to realize the hidden value lying in a software. That's a big cost saving opportunity. It also helps one in articulating requirements in a better way to software vendors, rather than buying expensive open-ended licenses. It also saves money on the maintenance.

In fact, our survey reveals that there is a growing awareness about the role of software. There is a greater consciousness around what a software can do to a business.