Harsh realities
Difficult as it may be to accept, the responsibility of owning valid software licences granting the right to install or make software available sits completely with the end user organisation, not with the software publisher or any other party.

Potential problems

If you assume that because software is running it is properly licensed then there is a good chance that non-compliance exists.

If anyone in control of software confuses activations keys with licences then the likelihood is that there will be unlicensed software on your estate.

If software is available, either installed or accessible by users then a licence is required whether it is used or not.

If the licence does not grant the right to install or make available the software in question, then that licence is not valid.

If your documentation does not meet the legal requirements for that licence's needs as regards proper proof then you don't have the licence.

If you purchase counterfeit software (by default the licence will not be legitimate either) whether deliberately or unwittingly you will have no recourse with the software publisher at any time, whatever the circumstances.

If your upgrade licence does not have a valid base licence, it isn't valid.

Basically, if the contractual requirements are broken in any way, the licence does not count - FULL STOP.

Does all this matter?
Yes, categorically yes and on two levels.

1) If your organisation is non-compliant and a publisher finds that out, you will have to purchase new licences immediately.  This can be very expensive and is nearly always required immediately meaning that it will be un-budgeted expenditure.

2) If your organisation does not own the right licences, then the likelihood is that your licence management is not what it should be and you are spending too much money on licences anyway.

The consequences?

We have seen countless examples where organisations do not own legitimate licences for one or more of the reasons above.

If you manage to avoid the shock of a sudden correction being required through a publisher audit, there are many things that can be done to improve the situation gradually.

What your organisation must do however is recognise that there are issues and deal with them.

For more information on what should be done, see our How to do SAM section.

A further sting
To add insult to injury, the publishers are within their contractual rights to charge retail price rather than any established discount when accounting for a shortfall in licensing, whatever the reason for the shortfall.

Some publishers in particular offer substantial discounts in normal circumstances, as high as 80% off list price.

But when in an audit situation, all discounts are off the table, so be very wary of any publisher action.

Conclusion
As you can see there are many reasons why licences can be classed as non-valid.

The good thing is that there are no other reasons why your licences are not of any use than those listed above.

If you understand the above you are half way to becoming compliant and saving money.

To find out how to achieve this blissful state in the quickest way possible, see our How to do SAM section.

We now move to discussing software asset management itself and the ins and outs of that market.