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Software compliance audits involve licensing, deployment considerations

Attorney David Sullivan of Crowe & Dunley discusses ways to handle software companies’ compliance audits.
by Paula Burkes Modified: August 27, 2014 at 9:00 pm •  Published: August 26, 2014
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Q&A with David Sullivan

Compliance audits may involve licensing, deployment usages

Q: How are software companies using compliance audits as revenue sources?

A: Often, the software licensors simply need to ensure that they are being fully and fairly compensated for the licensed software. In other cases, software companies use compliance audits to encourage customers to migrate to new or updated software as an alternative to purchasing additional quantities of the originally licensed software.

Q: What are best practices in preparing for, conducting and resolving a compliance audit?

A: It’s important to negotiate for reasonable audit provisions when the software is originally licensed. Once the software is installed, it’s important to continually monitor your usage of the software to ensure you stay within your licensed capacity.

Q: What techniques can IT departments use to minimize exposure during an audit?

A: We recommend our clients form an audit response team that includes members from asset management, legal and procurement groups. We also recommend that you limit communication with the vendor until an initial internal review of the situation has been conducted. It’s important to keep in mind that internal communications may not be protected by attorney-client privilege and may be discoverable in subsequent litigation. That’s why it’s important to engage the company’s legal department or outside legal counsel as soon as possible after the audit request is received.

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by Paula Burkes
Reporter
A 1981 journalism graduate of Oklahoma State University, Paula Burkes has more than 30 years experience writing and editing award-winning material for newspapers and healthcare, educational and telecommunications institutions in Tulsa, Oklahoma...
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