As I learned at my last job, software licensing can become a real nightmare if not managed effectively. With the company’s user population growing, it became more apparent that software licenses needed to be organized and tracked. The company owned several different versions of Microsoft Windows and Microsoft Office, along with various third-party applications. To make matters even more complicated, some licenses were OEM licenses, while others were purchased under an Open License Agreement. An effective method of tracking and maintaining software licenses was imperative to keep us legal.

To develop such a method, you first need a plan that breaks the auditing process into manageable steps. Without such preparation, the project can become overwhelming—especially if you’re working alone, as I was. To help you get started, read about the six-steps that I used to bring my company into compliance.

Step one: Pick a license tracking method
Before you begin, you’ll need to choose an effective way to track your licenses. If you’re a database wizard and have the time to create your own tracking application, go for it. If you support a small office, a spreadsheet might be sufficient. These options can save your company the cost of a specialized license-tracking application. Unfortunately, I had neither the time nor skill to develop an in-house application, and our company had too many desktops for a spreadsheet. We decided to purchase a third-party program called AuditWizard by Layton Technology, Inc.

Step two: Perform a software audit
Although some third-party software-auditing products can audit desktops through the network, I recommend performing a manual audit. This process will allow you to become familiar with the different software programs and their license agreements. Be sure to take notes and obtain the EULAs for every program. Realize there may be times when you must call a software manufacturer to explain their EULA.

For example, a group from my company asked me to install an application on two different computers. The EULA states that the software may only be installed on one computer. And the software requires a hardware key so that it will run. In theory, you could install the software on ten machines and still the software would only work on one computer. The hardware key would simply have to be moved from computer to computer. The group insisted this was how they have always worked. In this situation, I called the software manufacturer and explained the situation, citing the pertinent parts of the EULA that were in question. After some debate, the software manufacturer ended up rewriting the EULA to allow our group to continue working on multiple computers.

Performing a manual audit will also give you the opportunity to speak with employees who may be curious about what the purpose of your audit is and why it is important.

Step three: Catalog all existing licenses
Using your new list of operating systems and applications, find out how many licenses of each one your company owns. This will be critical for the next step.

Step four: Organize the data you’ve gathered
Once your audit is complete and you’ve cataloged all existing licenses, you can gather the data together and decide what steps you should take to ensure that your company stays legal. Depending on how disorganized your company’s licenses are, you may begin to feel overwhelmed at this point—I did.

To make the process more manageable, I recommend tackling one application at a time. Start with your operating systems. If you have several, pick one. Establish the number of licenses that are in use and compare that with the number of licenses you have purchased in the past. Make any purchases necessary and move on to the next operating system or application. This is a tedious but essential process.

Step five: Maintain your license database
Even in a small company, it’s easy to get behind. When you purchase software, make the necessary changes to your database immediately—do not wait.

Step six: Review your company’s software licensing policy
When performing your audit, review your company’s current software licensing policy. At a minimum, your policy should contain the following points:

  • The company will operate only software for which valid license agreements exist (i.e, licensed software) in its computers.
  • The company will operate and otherwise treat licensed software in accordance with the terms and conditions of all relevant license agreements.
  • No unauthorized software is to be used on company computers.
  • No company software is to be used on unauthorized computers.
  • No unauthorized copies are to be made of company software.
  • No company hardware or software is to be taken from the company premises without management approval.

One final suggestion—choose a single license vendor
If your company has several license vendors, attempt to narrow it down to just one. A good vendor will have a staff proficient in the licensing schemes of common software manufacturers, such as Microsoft. A good vendor will also be able to easily track previous software purchases and send you reports, which you can use to compare with your own records from time to time. This is especially helpful when you have other employees in the company who like to circumvent you and your IT department for software purchases.

Once you’ve chosen your vendor, talk with them about the different licensing options. Many software manufacturers have developed licensing strategies that are simple and easy to understand, and can even save your company money.