Stay safe by keeping your Proof of License
The importance of the so called Proof of License (PoL) documentation is widespread and, if in some cases keeping the proof of a license could spare you from losing a few bucks, in others it could save hundreds of thousands of dollars in legal fees and fines, as in the case of a software audit.
The “Proof of License” concept can be translated in a process of keeping track of certain types of documentation and ensuring that all software is genuine, has been purchased legitimately, is correctly licensed and is eligible for all upgrades and support its users are planning to use.
We, as a license management company, want to help you understand why it’s in your best interest to keep all proofs of license on an ongoing basis and which documents are required for different types of vendors, in a series of articles that we invite you to read.
What can be considered Proof of License?
Whether you buy a personal computer with software installed on it or you purchase hundreds of software licenses for a company, you will always receive a document from the vendor– be it a sticker, a receipt or an agreement – that certifies the fact that you own a valid license obtained legally.
This document, regardless its size or complexity, is a Proof of License.
Usually, documentation containing the name and version of the software, the date of purchase, the price and the name of the company can be accepted as proof of a valid license.
Nevertheless, software licensing is a very complex domain and every software publisher has its own rules. As such, what is considered valid as Proof of License may vary from one publisher to another.
A strong understanding of what consists of real “proof” will, in many cases, make a difference during a software audit. Nevertheless, the end user is not always made aware of what is needed to prove legal possession of software.
Why maintain Proof of License?
Keeping your proof of licenses is beneficial to your company for many reasons.
To begin with, all software compliance audits demand the end user to be responsible for keeping track of the licenses obtained. If a software publisher has evidence that you are using software for which you cannot provide the evidence that a license has been bought, you might be facing considerable penalties. In addition, the unlicensed software is not eligible for product upgrades and technical support either, diminishing the value of software to your organization.
Finally, PoL ensures that your company is using only legal software and is not at risk of malware, viruses or data loss, as it could be in the case of unauthorized software use.
Time to prove ownership of software licenses
If you have software installed on your network, there will be some situations when you will have to provide Proof of License:
during a software audit
The first step to be taken after receiving an official audit letter is to conduct an analysis of the software installed on your network. Once all the software on the network is identified, you must provide proof that all the necessary licenses are obtained and that these licenses have been obtained legally. Collecting entitlement information to prove ownership of software licenses is typically a difficult and time-consuming task. Maintaining your Proof of Licenses in an organized manner is therefore of great value to any enterprise.
when setting up a software asset management (SAM) process
One of the main roles of a software asset manager is to administer, understand and maintain new licenses and to monitor the usage of existing applications to ensure they are being used effectively and legally. In order to setup such a process, a SAM team must first determine the software entitlements of a company.
when asking for technical support or product upgrade
The technical support staff of a publisher may ask for the existence of a Proof of License before reinstalling software on a computer that has been reimaged or rebuilt or when you ask for an upgrade.
Risks for not having Proof of License
Not having Proof of License available (and thus not being able to prove that the software was legally obtained and installed) can result in financial penalties and legal costs, damaged reputation, ineligibility for technical support or upgrades which can result in lost opportunities for your business.
Additionally, not having an evidence of the PoL makes it difficult to track any piracy and illegal software on your computers. Intentionally or not, employees might download and install illegal software without reporting it, a fact that can trigger serious issues from viruses, malware, financial penalties to even criminal or civil penalties for copyright infringement.
This article is the introduction to a series intended to provide you with a high-level overview of the documentation different software vendors accept as Proof of License. In the following articles, we will talk about how Oracle, Microsoft, SAP and IBM define Proof of License documents.
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.