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Perils of Software Audits

 
 
Lawrence D'Oliveiro
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      03-30-2010
Interesting reader story
<http://forums.channelregister.co.uk/forum/1/2010/03/28/microsoft_select_agreement_license/>:

Moving forward in time to the audit 5 or 6 years later, all our estate
had indeed been upgraded but we had no evidence of the originally
shipped licenses for those PCs - notwithstanding that those PCs were
obsolete, few if any still extant (and the manufacturer had stopped
making PCs in the intervening years and unable to assist). So all they
had was a pile of downgrade licenses and an estate of upgraded PCs. From
my perspective a downgrade license implies that there was a license to
downgrade from, especially as it probably dated back to the time when MS
were requiring that manufacturers buy a Win license for every PC shipped
regardless of whether the user wanted/needed windows. But the auditors
disagreed with that logic.

Moral: don’t expect software auditors to show common sense...


 
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peterwn
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      03-30-2010
On Mar 30, 8:41*pm, Lawrence D'Oliveiro <l...@geek-
central.gen.new_zealand> wrote:
> Interesting reader story
> <http://forums.channelregister.co.uk/forum/1/2010/03/28/microsoft_sele...>:
>
> * * Moving forward in time to the audit 5 or 6 years later, all our estate
> * * had indeed been upgraded but we had no evidence of the originally
> * * shipped licenses for those PCs - notwithstanding that those PCs were
> * * obsolete, few if any still extant (and the manufacturer had stopped
> * * making PCs in the intervening years and unable to assist). So all they
> * * had was a pile of downgrade licenses and an estate of upgraded PCs. From
> * * my perspective a downgrade license implies that there was a license to
> * * downgrade from, especially as it probably dated back to the time when MS
> * * were requiring that manufacturers buy a Win license for every PC shipped
> * * regardless of whether the user wanted/needed windows. But the auditors
> * * disagreed with that logic.
>
> Moral: dont expect software auditors to show common sense...


In the USA context, BSA (aka Micro$oft) auditors can get away with
extracting a significant financial penalty because they can make
things very financially painful if it went to court as they can forum
shop, use legal tactics to financially wear down the subject of the
audit etc.

In the NZ context, a disputes tribunal referee or district judge would
probably place a larger onus on the auditors to show that the software
on the balance of probabilities is unlicenced (ie an obviously pirated
version is used). Unless the auditors can show the licencing issue
was deliberate, hefty damages are unlikely.
 
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Lawrence D'Oliveiro
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      03-30-2010
In message <a6ca3de2-
e349-4ce3-9c81-85a185fab1d6@u22g2000...oglegroups.com>, peterwn wrote:

> In the NZ context, a disputes tribunal referee or district judge would
> probably place a larger onus on the auditors to show that the software
> on the balance of probabilities is unlicenced (ie an obviously pirated
> version is used). Unless the auditors can show the licencing issue
> was deliberate, hefty damages are unlikely.


I wonder, though. I think part of the conditions for getting a volume-
licensing deal is that you must agree to such audits. Are there laws in NZ
preventing you from contracting away your right to such impartial
judgements?
 
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peterwn
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      03-31-2010
On Mar 31, 9:51*am, Lawrence D'Oliveiro <l...@geek-
central.gen.new_zealand> wrote:
> In message <a6ca3de2-
>
> (E-Mail Removed)>, peterwn wrote:
> > In the NZ context, a disputes tribunal referee or district judge would
> > probably place a larger onus on the auditors to show that the software
> > on the balance of probabilities is unlicenced (ie an obviously pirated
> > version is used). *Unless the auditors can show the licencing issue
> > was deliberate, hefty damages are unlikely.

>
> I wonder, though. I think part of the conditions for getting a volume-
> licensing deal is that you must agree to such audits. Are there laws in NZ
> preventing you from contracting away your right to such impartial
> judgements?


The contracts may require audits, but contract law would stop the
imposition of 'penalties', even if the contract so allowed. The
contract could include 'liquidated damages' ie an acceptance of
provision for certain $ amount to be paid in response to various
events operating to the detriment of a party. Whether ticking a box
is sufficient to 'enliven' such a provision I am not sure. Generally
volume licencing deals would normally require a customer signature and
in most cases the contracting parties would be regarded as having
equal bargaining power, that is they need not buy off (say) Microsoft.
 
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Lawrence D'Oliveiro
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      04-01-2010
In message <797b456b-2518-45af-
(E-Mail Removed)>, peterwn wrote:

> The contracts may require audits, but contract law would stop the
> imposition of 'penalties', even if the contract so allowed.


I’m not sure these are technically “penalties”, they would be assessed as
“charges” for the software assuming it was not paid for, albeit calculated
in the most punitive way imaginable.
 
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