Latest Unisphere Research Survey Reveals Software Audits are on the Rise

Entering the post-pandemic era, and faced with an uncertain economy, many software vendors have been looking for sources of additional revenue, and they have found it—through customer software audits. These software audits have become a big business, serviced by prominent accounting and consulting firms on behalf of vendors, and often incurring millions of dollars of extra charges to customers.

“Managing The Software Audit: 2022 Survey on Enterprise Software Licensing and Audit Trends,” sponsored by LicenseFortress and produced by Unisphere Research, revealed 69% of survey respondents reported having been audited within the past three years, and 79% reported having been subject to a software audit within past five years.

To better understand the scope of software audits, as well as the costs incurred, Unisphere Research, a division of Information Today, Inc., surveyed the readership of its flagship publication, Database Trends and Applications, which consisted of database managers, developers, CIOs, and IT directors. The survey, which sought views and experiences with software licensing and audits, was conducted in partnership with LicenseFortress. A total of 283 usable responses were received.

While at least half of smaller companies with fewer than 250 employees have largely been spared by audits over the past three years, mid-sized companies have been prime targets, even more so than the largest organizations with 1,000 or more employees.

Most audits were conducted by Microsoft, which wasn’t unexpected given the pervasiveness of Microsoft products across the enterprise spectrum, according to the report.

The length of audits, which are likely determined by their scope, run longer at larger companies. While 41% of smaller companies wrap up audits within a month, only 21% of the largest enterprises see this kind of speed—close to half say the process lasts beyond three months.

Among companies audited by their software vendors in the past three years, 64% were leveraged additional charges for non-compliance. A substantial portion, 35%, had to pay $100,000 or more to achieve compliance with the vendor, and 10% were leveraged $1 million or more in fees. At the high end, companies being audited by Oracle incurred the highest fees, with 15% required to pay $1 million or more in non-compliance fees.

Among those who were audited within the past three years, just over one-third, 34%, engaged a third-party service to assist with negotiating with the vendor. In just about all cases, the third-party firm was helpful in reducing the liability.

Among approaches deployed to prevent or manage issues with software compliance, the leading choice is working with an internal software asset management/IT asset management (SAM/ITAM) team. Respondents were also likely to rely on vendor resources to support their audit.

Software asset management is seen as critical to mitigating the impact of software audits by a significant share of respondents. Close to half, 44%, see SAM as essential to reducing the costs of their software, which is impacted by vendor audits. Another 41% cite the importance of SAM in avoiding compliance issues.

While many applications and data sets have moved to the cloud, respondents reported that there was no appreciable impact on their software compliance issues.

To read the full report, go here.