Global bean-counting behemoth PWC tells vendors: Now would be a great time to audit your customers You know how it is: the economy is in meltdown; half the company is working from home and the other half is furloughed. What is there to look forward to? Software audits, that's what. Yes, audits are among the advice global accountancy and consultancy PWC has delivered to a software industry beleaguered by the economic impacts …
> All staff working from home, other households not allowed in someone else’s house in the UK. Good luck with that...
<phone rings> Hello, yes... you'd like to do an audit? .. That's fine. I'm working from home at the moment, do you mind coming round to my house? You don't? That's great. By the way, one of my tarantulas escaped his cage last week and I still haven't found him, but don't worry, the pit bulls usually start growling if they see it.
I remember those days well. After one exhausting call I vowed never to buy (or use) any microsoft program if I could find an alternative. As a small business owner I could mandate what we used, what the servers ran, and train the users. It was a bit tricky in the early days, but we did it.
...they act as a 3rd party auditor for several of the major vendors, especially Microsoft and VMware. This is just as much about generating revenue for them as it is for the vendors. That said, if you know your contracts, there is usually a way round it. Most vendors will have a statement in the audit clause of a contract about not unreasonably impacting on your business so, at a time like this, it's very easy to argue that an audit now would be an unreasonable impact; especially when most of the techs will be focusing on keeping the lights on during the pandemic. Here's a blog post about this very issue I wrote a couple of months back...
https://cortexconsulting.co.uk/blog/f/how-to-respond-to-a-vendor-audit---global-pandemic-version
The time to watch out is post-pandemic - lots of vendors have made free stuff available to help customers execute business continuity plans (Microsoft, Zoom, Citrix to name some of the more prominent ones) and they will be looking to collect on that when businesses are back up and running fully.
I worked for a global "household name" organisation with many thousands of users of an operating system and some office software. A 3rd party auditor was employed to see if we had exceeded the specified number of users. We were warned that such audits had always found in favour or the software company and the proposal was that the problem would go away if we chose to pay an annual fee at a cost designated in the £millions. That would get us and unlimited corporate license rather than one with a numerical allocation at a much lower annual cost. We declined. The audit found we were not in breach, in fact the guys doing the work congratulated us on our approach to license management, the best they'd seen. I was very pleased as that scheme was put in place at my instigation, I'd never trusted the warm words of reassurance when we signed up to the license.
However the auditors were working on commission so their bosses sent the team back with orders not to come back empty-handed.
The original audit had concerned itself with the office software licenses, now the focus moved to the OS.
Some PCs, now several years old, had been delivered with a newer version of OS than was our standard at the time. In order to comply with the license terms we'd had to pay an "upgrade fee" to permit us to downgrade to the older version. Yes I know that sounds incredible, but true, we'd argued at the time but the software company was very keen to get people to move to the newer version. We wanted consistency across the fleet and of course had thousands of PCs for which we would definitely need to pay the version upgrade fee should we undertake that fleet-wide upgrade.
That meant we held physical downgrade licenses to the older version. We had subsequently upgraded our entire fleet but hadn't considered it necessary to re-license the downgraded PCs as we were only reinstating the licenses the PCs were shipped with. The original licenses had been OEM licenses that came with no formal documentation. At that time any manufacturers that shipped PCs without OS licenses were given such a hard time by the software provider that they had no rational choice but to ship everything with a license.
The auditor's stance was "fine we've seen the downgrade licenses but you can't show us evidence of the original licences you downgraded from". The PC manufacturer was no longer in business so unable to provide "proof" of the original licenses. Paperwork from those original PC orders might have itemised the included OEM license. That would require digging through years-old files which, even if the documents could be found, might not adequately clarify the issue. The outcome: we were unable to prove those, now rather aged PCs had valid OS licenses.
Some top-level horse trading ensued. Our bosses didn't want to fall out with the auditors and cooperation with the audit, as required by the license terms, was costing us a lot of management time.
We agreed to the technical violation and resolved the issue by a one-off payment in the region of GBP100,000 A trivial amount relative to my employers annual profits. It did leave a feeling of grievance toward the software author and a brief review of whether alternative software might be worthy of consideration. The intermediary in the supply chain who had encouraged us to sign up to the office software license fell out of favour.
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