Perils of Software Audits

Discussion in 'NZ Computing' started by Lawrence D'Oliveiro, Mar 30, 2010.

  1. 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...
     
    Lawrence D'Oliveiro, Mar 30, 2010
    #1
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  2. Lawrence D'Oliveiro

    peterwn Guest

    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: don’t 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.
     
    peterwn, Mar 30, 2010
    #2
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  3. In message <a6ca3de2-
    >, 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?
     
    Lawrence D'Oliveiro, Mar 30, 2010
    #3
  4. Lawrence D'Oliveiro

    peterwn Guest

    On Mar 31, 9:51 am, Lawrence D'Oliveiro <l...@geek-
    central.gen.new_zealand> wrote:
    > In message <a6ca3de2-
    >
    > >, 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.
     
    peterwn, Mar 31, 2010
    #4
  5. In message <797b456b-2518-45af-
    >, 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 “penaltiesâ€, they would be assessed as
    “charges†for the software assuming it was not paid for, albeit calculated
    in the most punitive way imaginable.
     
    Lawrence D'Oliveiro, Apr 1, 2010
    #5
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