Late last month, shockwaves were sent through the SAP customer base as a UK court ruled in favor of SAP and against the mega spirits supplier Diageo in an indirect licensing case. The court determined that Diageo was violating SAP’s licensing T&Cs when they were connecting a 3rd-party app to their SAP ERP for a myriad of business process life cycles. In their claim, SAP is asking for £60m in unpaid fees. Yes, £60m! Pending appeal, the court will make a decision on the actual amount to be paid within the month. As a fellow SAP customer, my company is now in a hurry to audit all the systems that are connecting to our SAP ERP to verify compliance, regardless of the fact that we conduct a license “True Up” with SAP every year.

 

This case reminds me of a licensing change that Microsoft made for SQL Server back in 2011, aka “The Money Grab." Microsoft decided to change enterprise agreement licensing in late 2011 for SQL servers from per-processor to per-core. This left many companies, mine included, scrambling to reduce, consolidate, or eliminate SQL servers ahead of their enterprise agreement renewal with Microsoft, usually with only a couple of months’ notice.

 

A common, and humorous, comparison that I often come across is that Lincoln’s historic Gettysburg Address clocks in at a shade over two minutes, yet the standard EULA for any software these days is more than three pages. Who has the time or patience to read that? Now ask yourself, how many software packages and applications do you have running across your enterprise? Do you, or someone else at your company, know the terms and conditions of the licensing for these software packages? Better yet, are they being regularly audited for compliance and/or usage reviewed to minimize spend? Don’t fear. There are many firms out there ready to provide their services when it comes to software license audits, but for a hefty sum.

 

It's difficult to predict the next “Money Grab” and who it will come from. I predict that as more companies go all in with the cloud, it will come from there. Think about it: IAAS equals cheap space and cheap processing for hungry consumers.

 

How do you react when it is too late and the vendor is knocking on your door? How do you remain proactive, stay organized, and prevent sprawl? Do you have all your T&Cs on file?