Quest Software audits: Freeware licenses

quest software

If you’re following our Quest – most common compliance issues seen article series you know already that the relaunch of Quest software was followed by a large number of software audits, which are still ongoing today. As a rule, they are carried out by one of the four major audit firms (such as KPMG and Deloitte) or by Quest Software itself.

In our article series we explained the most common compliance issues seen, based on our daily interactions with different end users across the world, whom we supply with audit support services, compliance review services and/or SAM Managed Services. This article focuses on the ins and outs of freeware licenses for Quest software.

What is a Freeware license for Quest software?

There is no generally accepted license that defines the concept of freeware with total precision, and every publisher sets its own rules. In general, however, freeware can be said to be software (usually proprietary) distributed to end users at no monetary cost. The Dell Software Group (which included Quest Software) defines its right to make use of freeware licenses in its Product Guide, as referred to in its End User License Agreement. Although the use of freeware is not subject to a license or support fee, users are required to follow the terms and conditions of freeware licenses to avoid compliance issues.

The following general terms are applicable for all freeware licenses provided by Quest:

  • Users may use Quest freeware for personal or internal business purposes.
  • The freeware license applies for a period of 90 days after the initial download.
  • Quest may change the scope of use or impose restrictions at any time at its sole discretion.

The following specific terms apply to all freeware licenses provided by Quest for Toad for DB2, Toad for Oracle and Toad for SQL Server.

  • The freeware version may be used by no more than five individuals within your organization. If you wish the program to be used by more than five people, you must purchase the corresponding commercial version of Toad.
  • You will not receive hard-copy documentation, technical support, telephone assistance, enhancements or updates to the freeware. If Quest releases a commercial version of the freeware, the parties shall agree upon the fees and terms for its use in a separate signed agreement.

Although the above text may look rather simple and obvious, the devil is, as so often, in the detail.

  • The fact that the software may only be used for personal or internal business is typically quite often well understood by users.
  • The time limitation of the freeware license poses a problem for some users. A typical comment is: “Why do I need to pay a commercial license now when this was a freeware license before?” Users often forget that Quest Software determines the applicable terms and conditions at its sole discretion. That means Quest can change a freeware license to a commercial license from one day to the next. If a freeware license is found during the course of an audit to be used beyond the end of the freeware period, a normal license will logically be charged, including back fees for support and maintenance applicable from the date on which the freeware license expired.
  • Another common issue for many companies that is uncovered by audits is the limit to the number of individuals who may use the software under a freeware license. How does one avoid three people at the US branch using the product at the same time as five people at the Indian branch, say?

It is important to keep in mind that the word “you” in the specific terms above applies to the organization (the legal entity) that obtained licenses. Many companies consist of several different legal entities, however, and each such entity may have acquired its own Quest software licenses over time. A problem can thus arise during an audit if an organization is seen as a single customer. It is important to clear this up in advance to clarify how many legal entities are entitled to acquire a freeware license under the agreed contractual terms and conditions.

There is a high risk of non-compliance with freeware licenses for Quest software, especially due to the fact that organizations often have more than five individuals using a Toad program under a given freeware license. Quest Software is therefore performing numerous software compliance audits in EMEA and NAMER either independently or through firms such as KPMG and Deloitte.

Rather than waiting for a Quest audit, we strongly recommend that you carry out an internal Quest audit at your earliest convenience to identify whether you are compliant or not. Remember that the question is not whether you will be audited but when.

If you need in-depth knowledge and support in carrying out such an audit, don’t hesitate to contact us.

Since 2015, Roxana is a Software Entitlement Specialist focused on educating clients on licensing issues with Oracle, SAP and Microsoft. In her role, she works with customers to assist them in understanding and improving their software environment by reviewing their software license agreements and provide them advice regarding legal and financial risks. With a legal background, she also helps customers identify legal weaknesses in their contracts and optimize them.