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Managed licences may slip through the net

By Miya Knights

Firms involved in offshore outsourcing urged to check licences carefully

Outsourcing software maintenance without clarifying licensing could leave companies unknowingly infringing copyright law.

The corporate services division of the Federation Against Software Theft (Fast) believes that companies which have outsourced IT services in good faith may risk liability with software suppliers.

Assuming that the right to use software is automatically passed on to the service provider, or covered by a standard outsourcing contract, could lead to a heavy fine for the outsourcing customer hoping to save money.

Chris Minchin, corporate services advisor manager at Fast, told "Every software publisher has their own view on how [the transfer of licences between an organisation and its service provider] should work."

He explained that software vendors would prefer organisations to notify them in advance of any change in users for licences, and that in some cases the transfer can be as easy as completing a simple form or paying a small fee.

Minchin also pointed out an added danger when outsourcing IT functions offshore to Asia, for example, where "you can pick up licences for a third cheaper".

In this scenario companies must make sure that they are paying for licences from the right region.

Even if licences are in order at the time of handover, it is up to the company that owns the licences to ensure that renewals or purchases are kept up to date and appropriate to the region in which they operate.

"Take an audit so you know what you are outsourcing beforehand," advised Minchin. "Once you've done that, check whether any licences involved in the transfer need to be passed over to the outsourcer."

First published March 5, 2004

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