COVID-19: Business continuity and software licensing risk

3 minute read  17.03.2020 Kit Lloyd

COVID-19 will test an organisation’s business continuity and could potentially expose software licensing risks.

 


Key takeouts


Large numbers of staff working remotely will expose software and services license risks in your organisation's business continuity plan.

Familiarise yourself with your software and services license agreements, how your people are working remotely, the devices they are using and the applications they are accessing, then monitor and maintain full records of software usage.

Seek written confirmation from your software or services provider that you are adequately licensed.

As the COVID-19 pandemic forces large numbers of employees to work remotely, organisations may be facing an unplanned financial risk: the potential to exceed their software and services license entitlements.

While most organisations have a business continuity plan (BCP), it is unlikely they expected to need software licenses in addition to those they currently use.

Tips to mitigate software license risk

To avoid a costly surprise from your software providers, things you need to check include:

  • Do you have enough licences (entitlements) to allow all employees to work remotely? (It's worth checking what was contemplated in the BCP.)
  • Do the licence terms require additional entitlements to be pre-purchased (and if so, what is the timing)?
  • Check the terms for any additional licenses acquired, for example, if there is a minimum subscription period, are there cancellation fees?
  • What are the licence restrictions? For example, can the licence be used on non-work issued devices and are all employment relationships covered?
  • Do the licence terms allow for a true-up of actual use versus anticipated use? Are you entitled to a rebate if excess licenses were purchased?
  • What penalties apply if it’s later claimed there were insufficient licences (licence pricing, back maintenance, punitive licence fees)?
  • What usage records are you required to maintain, and in what format (for example are you required to run a vendor supplied measurement tool at all times)?

Confirm you are adequately licensed

We recommend that you contact all your relevant software providers and obtain written confirmation that you are adequately licensed for the foreseeable scenario (as set out in your BCP plan).

Be wary if a software provider is reluctant to do this, and ask them to provide a copy of the applicable terms as they are likely to have changed since you originally purchased the software.

And when things return to normal, don’t be surprised if you receive a notice of an impending licence audit. If this does occur, please contact us.

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https://www.minterellison.com/articles/covid-19-business-continuity-and-software-licensing-risk

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