201707.14
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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…

201706.11
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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…

201705.03
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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…

201704.11
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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…

201703.15
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Customers Using Software Recently Acquired by IBM Should Proceed with Caution

In 2015, IBM acquired no fewer than 11 software and services companies.  Many software customers are surprised that after IBM purchases a company, IBM often significantly changes the license terms of the products.  For some customers that have purchased unlimited or site licensing with the prior software publishers, IBM’s changes can be surprising and expensive….

201702.20
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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…