Defence spies single software auditor

The Department of Defence will change the way it negotiates and tracks software licenses when it appoints a single outsourced service provider to handle the work.

The department's Hardware Software Branch — part of the Chief Technology Officer Division — last week tendered for a single service provider to manage licensing compliance and "contract management of large complex software contracts that require active management".

It listed these as major suites including IBM, Oracle, SAP, Adobe, HP, Objective and Compuware.

In addition to keeping track of licenses, the single service provider is expected to oversee Defence's central hardware and software asset repository — IBM's smart cloud control desk — and to "lead negotiation for all software contracts" to deliver "best value for money outcomes".

A Defence spokesperson told iTnews the proposal is part of an ongoing software asset management (SAM) program, rather than being driven by any specific issue or challenge with license compliance.

"This project is part of the ongoing SAM program and seeks to change the sourcing/delivery model for this program," the spokesperson said.

"Defence currently sources a range of SAM services from various providers, utilising a managed service and individual contract engagements.

"Defence seeks through this tender process to transition these services to a single provider through a managed service delivery model."

Defence had been embroiled in court action over a software licensing dispute with vendor Attachmate in 2011.

The spokesperson did not directly address a question from iTnews on whether the case or other court action had necessitated changes to the way Defence handled its software asset management.

However, the spokesperson did say that active contract management of large vendor suites had been "a requirement/deliverable of and in line with the Defence SAM Program" for a number of years, and was not driven by the threat of audit.

The Department of Defence will maintain a governance oversight role in its new sourcing arrangement.

It is hoping to negotiate the new arrangement from later this month or early June.

Combating audits

Compliance audits by software vendors have become more frequent in recent years, and the trend is continuing, according to Gartner research director Guriq Sedha, a Sydney-based expert in IT asset management.

"We see more vendors auditing their customers more often," he said.

Sedha sees several possible challenges in dealing with software licensing.

"One is that during the sales cycle, depending on the budget a business unit has, sales people .... allow a little bit of flexibility here and there in terms of how the software is implemented. However, that flexibility is never captured in the contracts," he said.

"The client thinks if they've bought software A, B and C then they can run their processes as they have explained to the sales people.

"[But] in comes the compliance team two years down the track, and they find if you're running the processes like that you need products D, E and F as well or there is a different number of licenses you need or different metric of license you need.

"That changes the equation significantly from a financial perspective for the client unexpectedly".

Compliance was also made tricky by changing terms and conditions over the life of a software contract.

Sedha said most software contracts referred to "user license policies" hosted on the vendor's website, which could be altered over the course of the contract.

"That means you have these fluid terms and conditions which are floating around and can be changed at any time in a manner that you didn't expect as a client," he said.