201702.14
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Settlement Structuring for IBM Audits

Software-compliance audits initiated by IBM can be extremely burdensome and time-consuming and can force companies to face challenges that are somewhat unique among major-publisher audits. For one example, a significant component of IBM’s business model is the acquisition of other software vendors and the integration of those vendors into IBM’s product portfolio, which can complicate…

201607.11
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Can a Software Publisher Force You to Audit Your Customers?

Many software-solution vendors utilize third-party infrastructure or application programs as frameworks for embedded solutions that they sell to their customers and install on their customers’ computers. Licenses for those third-party products typically can be acquired by a vendor and passed to its customers pursuant to the terms of an Independent Software Vendor (ISV) or Original…

201607.11
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Be Wary of Certain ISV and Embedded Software Agreements

It is common for software solution providers to use third-party products to support the functionalities those providers have developed for their solutions. For example, a network-monitoring solution may incorporate IBM Cognos functionality, or an accounting solution may incorporate a Microsoft SQL Server database. Increasingly, in today’s market, those solutions are hosted over the Internet, and…

201604.11
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Are Artificial-Intelligence Software Audits Around the Corner?

Recent weeks have seen a number of news reports and announcements indicating that the Next Big Thing for audits – financial audits, at least, for the time being – is the use of artificial intelligence technologies to facilitate the analysis of large volumes of data in the context of audit-related activities. KPMG’s recent announcement was particularly noteworthy from my…

201601.07
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IBM’s Audit Rights Take a Turn for the Worse

The software-audit language contained in IBM’s standard license agreements never has been anything that anyone would mistake for customer-focused or even very fair contract terms. However, in August 2014, IBM released a new version of its Passport Advantage Agreement (PAA) that applied immediately to all new business that now is in the process of being…

201601.06
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Don’t Short-Sheet the Internal Analysis in an IBM Audit

One of the most critical steps of any business faces in any software audit is conducting an internal analysis of deployments to entitlements, preferably before any audit data is shared with the auditors. That internal review serves several purposes, including (1) identifying deployments for which a company’s license documentation may be lacking, thereby giving the…

201601.06
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Beware of IBM’s “Blue Washing”

Fans of Star Trek likely are familiar with the dreaded Borg – an alien race of cyborgs that survives and swells its ranks primarily by conquering other races and then absorbing them into the collective through brainwashing and physically altering them with Borg-y bionic body parts. Their creepy, trademark greeting to new races is always:…

201601.06
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IBM’s Standard Audit Clause is a Time Bomb

It is standard practice for software vendors to include clauses in their license agreements giving the vendors the right to invoke audits or some other mechanisms to ensure that the licensed products are used in a way that is consistent with agreed licensing restrictions. Most software consumers would agree – perhaps grudgingly – that such…