The importance of analyzing your license entitlements

In a constant changing era of technology, software licensing is becoming more and more important for most organizations. So, you purchased the licenses, they are in use, but at some point, you may start wondering:

• What will happen if we get audited by the software publisher?
• Are you aware of the contractual rights and obligations associated to these licenses?
• Do you know how many users are allowed to use them? How do you keep track of them?
• What documents are needed?

These questions probably sound quite familiar. So, where to start?

To help you create a more structured image of your licensing environment, the first step is to take a look at your license entitlements. As a standard definition, a software entitlement means the right to use a certain product, in a certain way, for a certain period of time, based on the terms and conditions from the agreement you signed with a software publisher.

In this article, we will present you a clear view of the software entitlement analysis, how it’s done and why is it important for you to make it a basic element in your compliance position.

What is the software entitlement analysis?

A software entitlement analysis covers the products purchased and the rights granted for their usage. This is performed through a contract analysis, which forms the basis for a report that shows the data needed for a complete and accurate compliance position.

It all starts with the actual contractual documents: you should have proof of your entitlements – ordering documents, agreements and amendments, support renewals, “license overview” from the publisher or downloaded from their licensing portals, if available. These documents are processed and analyzed, looking into the type of licenses, the metrics, quantities, terms, minimums, limitations/restrictions. Alongside that, in order to understand what you are entitled to use and under what conditions, the analysis includes also the software license related terms and conditions, such as general conditions, product conditions and usage conditions.

Do you think it’s easy? Maybe it is… for a contract analyst, but sometimes it takes a lot of time and research even for an experienced analyst. If you try to do it by yourself, you might encounter some challenges: most of the times, you will notice that the terms and conditions are spread over various documents and online resources, depending on the publisher, which can complicate the situation even more. Not to mention that each publisher has its own specific licensing rules.

Why is this important for you?

The entitlement analysis is the first and most important step in your compliance position because it shows exactly what software was purchased, the rights granted for the usage of your licenses and also defines the research question for the usage data collection. Once you have a clear overview of your entitlements and their usage conditions, you can take the next steps in order to establish your compliance position.

Maybe you tried to keep track of your license entitlements manually in an excel file listing the products, quantities and metrics, thinking that you can try to do Software Asset Management without a full entitlement analysis. Unfortunately, this is a very simplified method that will only give you a superficial report because the information is incomplete and does not reflect the actual usage conditions of your licenses.

Having a consolidated view of your licenses is a major advantage when you are facing a software audit or try to setup a SAM tool because it helps you to manage risks and remain compliant. It’s a great way also for your internal software management department to track your licenses and keep them constantly updated.