Flexera Software Study Reveals Organizations Are Unprepared for Software License Compliance Risks Arising from Virtualization

Data suggests companies are not properly managing licenses of virtualized application despite rise in vendor software audits

Schaumburg, IL - Jun 11, 2013 - As the server virtualization, desktop virtualization and application virtualization trends continues to take firm root within organizations globally, a new Flexera Software Survey, prepared jointly with IDC, has found 43% of organizations do not have sufficient processes and automation in place to manage their virtual licenses, placing them in substantial risk of falling out of compliance with their software licenses.

"While server, desktop and application virtualization provide tremendous operational efficiencies to organizations, each vendor has unique, evolving and frequently opaque licensing rules around virtualization. If sufficient measures are not taken to manage and optimize those virtualized licenses, companies may be vulnerable to substantial 'true-up' penalties if they are audited by their software vendors," said Amy Konary, Research Vice President - Software Licensing & Provisioning, IDC. "In one instance, I am aware of a global enterprise that saved $4 million in hardware through virtualization, but it cost them $52 million in a resulting software license compliance issue."

Growth in Virtualization & Audits Suggests Noncompliance Windfall for Producers

The survey points to both the increasing penetration of virtualization within organizations, and the increasing frequency of vendor software license audits, underscoring the vulnerabilities enterprises will face if they do not take additional steps to more strategically manage and optimize their virtualized applications. According to the survey, 56% of enterprises (up from 51% in 2011) report that 41% or more of their applications have been virtualized using server virtualization, and 24% say that between 10-25% of their apps are delivered though desktop virtualization (VDI).

The survey also reveals that application producers see virtualization as a new revenue opportunity. 50% of producers indicated that over the next 18-24 months they will be changing their licensing models to accommodate virtualization. When the producers were asked why they change licensing models, the overwhelming majority - 69% -- said it was to generate more revenue.

Where will some of that additional revenue come from? According to the survey, 17% of producers currently rely upon trust-based licensing coupled with vendor-compliance audits. Looking into the future 18-24 months, this method of licensing and enforcement is expected to increase by 11% - suggesting an acceleration of the audit trend.

"Our customers have been reporting a major uptick in the frequency of vendor compliance audits, underscoring the strategic importance of continual compliance, and continual license optimization in reducing financial risk," said Jim Ryan, Chief Operating Officer of Flexera Software. "When organizations have the best practices and solutions in place to optimize their virtual licenses, they will know ahead of time the impact that virtualizing their applications will have - allowing them to minimize their virtualization costs, and risk."

Click here to access the complete survey results.


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Flexera is reimagining the way software is bought, sold, managed and secured. We view the software industry as a supply chain, and make the business of buying and selling software and technology asset data more profitable, secure, and effective. Our Monetization and Security solutions help software sellers transform their business models, grow recurring revenues and minimize open source risk. Our Vulnerability and Software Asset Management (SAM) solutions strip waste and unpredictability out of procuring software, helping companies buy only the software and cloud services they need, manage what they have, and reduce compliance and security risk. The Flexera  RightScale multicloud management and cloud cost optimization solutions enable enterprises to drive top-line revenue while optimizing cloud usage to reduce risk and costs. Powering these solutions and the entire software supply chain, Flexera has built the world’s largest and most comprehensive repository of market intelligence on technology assets. In business for 30+ years, our 1300+ employees are passionate about helping our 80,000+ customers generate millions in ROI every year. Visit us at www.flexera.com.

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