A “software licensing troll” is a term coined by Michael Corey and Dean Bolton, cofounder and chief architect of LicenseFortress, in collaboration with Art Beeman and Joel Muchmore of Beeman and Muchmore. We recognized it as the natural evolution of the “patent troll”—a concept that emerged in the 1990s.
A patent troll is a business or entity that acquires patents—often vague or overly broad—and uses infringement claims to secure legal judgments or out-of-court settlements for profit, leveraging the patent system far beyond its intended purpose.
During a fireside hangout on Google, President Barack Obama summed it up perfectly:
“These rogue figures and organizations fail to produce anything of value themselves. They’re just trying to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”
While several court rulings have made it more difficult for patent trolls to thrive, the problem persists. A Cornell Law Review article estimated that companies paid $29 billion in direct costs to patent trolls in 2011. In 2023, U.S. companies were still losing an estimated $60 billion annually to patent litigation, with a significant portion attributed to trolls.
Given the lure of easy money in today’s post-COVID world, it’s no surprise that the software licensing troll has emerged as a new paradigm of opportunity—and risk.
How Does a Software Licensing Troll Operate?
A software licensing troll aggressively enforces software license agreements—not to protect genuine intellectual property, but to extract large financial settlements through threats of audits and litigation. These trolls exploit ambiguous or overly broad license terms, using fear, complexity, and—let’s be clear— extortion to pressure organizations into paying up.
Why the Software Licensing Troll Is So Dangerous
Unlike a patent troll—which ultimately must go to court—a software licensing troll can, under standard license agreements, legally stop you from using a company’s software if you’re found materially out of compliance and fail to fix it.
Combining the right to audit with the power to cut off your access—without ever stepping in a courtroom—makes the software licensing troll far more dangerous than its predecessor. As Bolton puts it, “In the decade I’ve been helping customers with software compliance, I have yet to find a company that was 100% compliant.”
The odds aren’t in your favor: A 2019 Logicworks’ “State of Cloud Compliance” survey found that 77% of companies did not believe they could pass a compliance audit. Vendors know this—which is why software audits remain a reliable revenue stream, as Gartner and numerous industry reports confirm.
What Are the Odds You’ll Be Audited?
Data from “The Rising Cost of Software Compliance: 2025 Survey on Software Audits” shows the following:
- 62% of respondents were audited by a major vendor in the past year (up from 40% in 2023).
- For companies with more than 5,000 employees, the rate rises to 66%.
- 32% of organizations incurred liabilities exceeding $1 million—more than triple the figure from 2 years ago.
- Audit risks are especially high for Oracle customers; there’s a 42% chance of being audited within 3 years—and a 29% chance tied to Java usage alone. Microsoft customers face a 57% chance, while IBM customers have a 30% chance over the same period.
(You can click here to register for a free copy of the survey: dbta.com/Readers/Subscriber.aspx?Redirect=https://www.dbta.com/DBTA-Downloads/ResearchReports/The-Rising-Cost-of-Software-Compliance-2025-Survey-on-Software-Audits-13940.pdfs.)
Here’s what the survey doesn’t tell you: When major vendors miss revenue forecasts, they often accelerate both “soft” and “hard” audits to make up the shortfall.
Soft Audits vs. Hard Audits
A hard audit is a formal, contractual audit initiated under your license agreement. A soft audit is an informal “license verification” request that pressures you to prove compliance.
An alarming trend is vendors’ increasing use of soft audits, where they ask seemingly innocent questions to trick organizations into revealing more than they should. Once you’ve shared your usage data, you can’t take it back—it’s like giving the vendor free shots on goal. No one wants to play defense like that.
Are Big Vendors Trolls?
Vendors such as Oracle, Microsoft, and IBM do use audits aggressively to protect their IP and drive revenue, but they still want long-term relationships. The true troll is focused only on extraction—not on partnership.
Enter profit harvesting, the practice of maximizing short-term revenue with zero regard for customer loyalty. This ruthless approach, which has grown alongside the rise of the software troll, shows how private equity acquisitions often fuel the behavior—recouping investments quickly by weaponizing audits and enforcing draconian terms.
But is that necessarily bad? Companies must balance maximizing shareholder value with maintaining trust. In the end, it’s a question of perspective—but for customers, the risk is real.
Classic Troll Examples
Micro Focus and Quest are classic software licensing trolls. After private equity acquisitions, both aggressively weaponized audits to extract revenue. Micro Focus went further—replacing long-standing agreements with hidden “click-wrap” terms that unsuspecting employees accepted just by installing software. In one case, this tactic led to an $11 million claim by Micro Focus against Cox Communications.
In early 2023, Micro Focus was acquired by OpenText, Canada’s largest software company. Many now wonder if OpenText could become the next mega troll.