Microsoft Licensing: A Cautionary Tale
- By Scott Bekker
have long dreaded tax audits and safety audits since the inspections can cost
an organization precious time and money. IT managers have an added source of
audit anxiety – the software license audit.
Microsoft recently surprised the municipal
government of Virginia Beach, Va. with a random audit, which resulted in the
municipality sending Redmond a $129,000 check.
August, Virginia Beach received a letter from Microsoft, requesting a routine
inventory of licenses and installed software at the city’s offices. The City of
Virginia Beach employs 5,900 people and uses 3,900 Windows computers. The 60
days Redmond gave the city presented both an organizational and technical
challenge for the city’s IT department.
hardest part for us was coming up with proof-of-ownership documentation,” says
David Sullivan, chief information officer for Virginia Beach. Sullivan says
that, until recently, software and other equipment was acquired on a
departmental level, with little centralized management. In some cases, point
solutions were purchased with petty cash at retail outlets, although Dell is the city’s approved supplier.
audit, Sullivan began the task of centralizing the purchase and management of
the city’s computers, ensuring that software licenses were accessible and
accounted for. Sullivan says that the audit reinforced the need for standard
policies regarding licenses. “We needed better management and knowledge of what
software was installed,” he says.
The bulk of
Virginia Beach’s 3,900 PCs run Windows 95, with a few Windows 98 and Windows NT
workstations. Workstations use the WordPerfect suite for productivity
applications. Although the city uses NetWare for most of its file-and-print
services, it also uses Windows 2000 servers, particularly for SQL Server
Client Access Licenses (CAL) presented a significant problem. Sullivan
estimates that about a third of the payment made to Microsoft is for SQL Server
CALs. “The CALs are very difficult to administer,” he says, noting it was
difficult to determine exactly how many user accessed the city’s three SQL
and his team were also required to audit the operating systems on desktop
machines. For this task, the city repurposed Check2000, a Year 2000 assessment
program from Greenwich Mean Time Ltd.
and User Technology Associates, to crawl
the network and determine the installed software. Sullivan said he has selected
Asset Insight by Tangram Enterprise Solutions
for future centralized software assessments.
says that machines like laptops that are not consistently attached to the
network had to be inventoried by hand, making the task a little more tedious.
After the inventory was completed, Sullivan and his team found that several
machines had Windows installed, but did not have licenses to account for the
installation. Sullivan says he is sure that a fair number of machines were
already paid for, but the city paid Redmond to avoid further problems.
says, however, that a license audit is something difficult for administrators
to plan for. “Microsoft frequently changes their licensing agreements and is
not required to notify us,” he says. After consulting with colleagues at other
organizations, Sullivan believes his experience is not unusual – “Clearly
Microsoft is stepping it up,” he says, “You need to read your Microsoft
The news of
the audit reached the Linux-friendly slashdot.org message board, and Sullivan
became intrigued by the suggestions some of the posters made, including using
free-license, open-source software.
says that Virginia Beach uses commercial software written for purposes beyond
the reach of amateur programmers, like a SQL front-end for police
administration. If the city decided to go open-source, it would have to hire a
programmer to accomplish what packaged software does cheaply – a practice the
city ended when it closed the doors on its mainframe era. ”When you have a buy
strategy, the market pretty much dictates what you want to do,” he says. – Christopher McConnell
Scott Bekker is editor in chief of Redmond Channel Partner magazine.