Failing to keep track of your software licenses is no excuse for violating them. Before you get caught, consider software asset management tools. You might find some surprising results.

It's the kind of scene that sends midmarket CIOs ducking for cover: Jenny Blank, flanked by U.S. marshals, marches toward the reception desk demanding to see the CIO. Blank, director of enforcement at the Business Software Alliance (BSA), is about to levy a huge fine on the company for software licensing violations. Moments before enduring an embarrassing public episode akin to getting a traffic ticket on a busy highway -- not to mention an imminent flogging by the CEO and CFO -- the hapless CIO often wonders why he didn't invest in software asset management earlier.

Though the BSA catches more and more companies in violation of their software licensing agreements, many CIOs are taken by surprise. Regulatory compliance and an explosion of software within midmarket companies have made managing software so complex that keeping track of all these licenses' finer points can fall through the cracks.

Last year, companies in the U.S. and Canada paid more than $14 million in fines -- $1 million more than in 2003 -- after BSA audits at hundreds of businesses found that unlicensed software was being used by employees galore. For the overworked CIO charged with managing this morass, some midmarket companies have found success with software asset management (SAM) tools -- basically, software that watches software.

At the low end, SAM products start with freebies available for download from the BSA Web site; they allow a CIO to conduct a self-audit of software licenses. High-end applications track software usage, down to which application functions are being used more frequently than others. With this information, IT departments can zero in on modifications they need to make to better reflect business needs.

New York-based architectural firm Perkins Eastman, for instance, uses a SAM product from Seattle, Wash.-based Express Metrix LLC to keep track of software used by the firm's 600 architects in offices nationwide. The SAM software not only tracks licenses but also enforces them. "If you only have 10 licenses and 11 people wanted to run the program, that 11th person is blocked," says Emily Baker, a desktop and software support specialist at Perkins Eastman.

This was first published in January 2006

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