The UK Competition and Markets Authority (CMA) has launched a strategic market status (SMS) investigation into Microsoft’s software licensing practices.

The probe, which the regulator touted in late March, aims to establish whether the tech giant’s position in the market has a negative impact on competition and consumer flexibility.

In a statement announcing the move, the CMA said the probe will primarily focus on business software products used by organisations across the country, including:

• Productivity software
• Personal computer and server operating systems
• Database management systems
• Security software

Microsoft business products, which include Windows, Word, Excel, Teams, and Copilot, are used by hundreds of thousands of firms and public sector organizations across the country, the CMA noted, with more than 15 million commercial users.

The regulator highlighted concerns that UK customers “may not always be able to effectively combine software from Microsoft with that of other providers”. This, it said, could limit their ability to access preferred products at competitive prices.

“The CMA’s investigation will examine whether Microsoft has SMS in business software and consider whether it can use that position to limit customer choice,” the CMA said.

“It will assess whether bundling of products, limits in interoperability or default settings can prevent customers switching and weaken the competitive constraints Microsoft faces from rivals.”

Notably, the CMA said its decision to launch the probe comes in the wake of a previous investigation into the UK cloud services market.

The regulator’s lengthy probe found the dominance of hyperscalers including Microsoft and Amazon Web Services (AWS) had a negative impact on competition in the UK market.

Microsoft has repeatedly faced scrutiny over its software licensing practices. Slack, for example, filed an EU complaint in 2020 amid claims the company had engaged in anticompetitive behavior with Teams bundling practices.

EU-based trade group, Cloud Infrastructure Services Providers in Europe (CISPE), filed a similar complaint in 2022, alleging that Microsoft imposed higher charges for customers running software on rival cloud platforms.

Microsoft and CISPE agreed to a settlement in mid-2025, which was met with criticism by other industry groups.

CMA seeks business feedback

This latest probe into Microsoft practices must be completed within nine months, according to the regulator. A decision on whether to designate the tech giant with strategic market status is expected by February 2027.

In the meantime, the CMA said plans to gauge the thoughts of businesses across the country using Microsoft products, as well as challenger companies, over whether product choices may be limited.

This includes concerns surrounding product bundling, lack of interoperability, and default settings used by the company.

“Our aim is to understand how these markets are developing, Microsoft’s position within them and to consider what, if any, targeted action may be needed to ensure UK organizations can benefit from choice, innovation and competitive prices,” said Sarah Cardell, chief executive of the CMA.

A spokesperson for Microsoft told ITPro: "We are committed to working quickly and constructively with the CMA to facilitate its review of the business software market."

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An alliance of European cloud providers has won concessions from Microsoft over its software licensing practices that could settle a long-running battle.

As part of the deal, Cloud Infrastructure Services Providers in Europe (CISPE) said members will now be allowed to offer Microsoft software to customers on a pay-as-you-go basis via the CSP-Hoster (CSP-H) program, with stronger privacy for customers of European cloud providers.

This, it said, will make pricing conditions for products including Windows Server and SQL Server more comparable to those of Microsoft’s own cloud platform, Azure.

“The agreement we reached with Microsoft marks a significant breakthrough in our long-standing efforts to ensure a level playing field,” said Francisco Mingorance, secretary general of CISPE.

“For enterprise customers, the new programs directly address previous concerns of CISPE members and empowers European enterprises to choose among a wide range of cloud solutions that meet their sovereignty, compliance, and economic needs.”

Meanwhile, Microsoft 365 Local will allow deployment on local cloud infrastructure, taking a further step toward digital sovereignty for European customers.

The deal applies to current CISPE members and eligible European cloud providers who join CISPE in the coming months. Microsoft has said it may expand access after a one-year review of the program's effectiveness.

Notably, the deal doesn’t apply to hyperscale cloud providers designated by Microsoft as ‘Listed Providers’. This, CISPE said, will help support competition and innovation across the European digital ecosystem by strengthening regional providers.

What’s the story behind the Microsoft-CISPE dispute?

The conflict between Microsoft and CISPE stretches back several years, with the latter having filed a formal complaint with the European Commission in 2022 amid claims the tech giant imposes higher charges for customers running its software on rival clouds.

In May this year, the European Cloud Competition Observatory (ECCO), charged with providing independent oversight on a deal, issued a report describing Microsoft's offering as 'disappointing' and giving the company an Amber rating.

Ryan Triplette, executive director of the Coalition for Fair Software Licensing, suggested the agreement still leaves questions unanswered.

"Every stalling tactic has just bought Microsoft more time to lock in customers with restrictive and anti-competitive licensing practices," he said.

"This is more smoke and mirrors from Microsoft: offer weak concessions in an attempt to avoid regulatory scrutiny and disingenuously pretend these actions promote European competition," Triplette added.

"Meanwhile, Microsoft continues to line its pockets at the expense of customer choice around the world.”

Notably, the deal lacks two provisions that CISPE had been calling for. First and foremost, it doesn't allow for Windows 10/11 VDI multi-session on European-owned multi-tenant infrastructure.

Similarly, it doesn’t remove the need to use Entra ID to activate Azure Active Directory and Microsoft 365 to allow full replacement and interoperability.

MORE FROM ITPRO

• Microsoft’s EU data boundary project crosses the finish line
• What the new Microsoft Sovereign Cloud push means for European customers
• Software licensing is becoming a minefield for IT leaders

Organizations are spending a fortune on fixing software license non-compliance, prompting some IT leaders to embrace open source alternatives.

Java platform Azul and the ITAM Forum said that 27% of enterprises now spend more than $500,000 each year dealing with the issue.

Oracle Java is a top concern, with 73% having undergone an Oracle Java audit within the past three years and nearly eight-in-ten saying they have migrated, or intend to migrate, to open source Java alternatives to try and manage the risk and cost.

Just under two-thirds reckoned that open source Java alternatives could save them at least 40% compared with Oracle Java licensing costs.

“The data reveals a concerning trend where the increasing complexity of vendor licensing and pricing has turned routine upkeep into recurring six-figure compliance exercises,” said Scott Sellers, co-founder and CEO of Azul.

"When 73% of enterprises have been audited and one in four now spends more than $500,000 a year cleaning up license issues, the cost of merely staying compliant with software licensing and pricing is unsustainable."

Hybrid cloud architectures and an increasing inventory of applications are making it harder than ever to maintain compliance and visibility across teams, while organisations are struggling to track usage consistently, both on-premises and in the cloud.

More than a third of survey respondents said that compliance, including the management of excessive licensing, was the top issue facing their organization.

A quarter complained that complex software configurations make tracking application usage more difficult, particularly across teams or between on-premises and cloud platforms.

Other challenges around managing software licensing and compliance included difficulty in aligning teams, including IT, software development, legal, and procurement, cited by 27%.

Similarly, resource constraints, escalating prices, and compliance with evolving licensing rules or vendor policy updates are all key pain points for enterprises.

Audit challenges are causing headaches

Notably, the study found three-quarters of organizations are handling audits internally, but cite challenges with coordination, collaboration, and organization when it comes to tracking software inventory.

More than a quarter struggle to maintain accurate software usage records, while 23% said it's hard to understand complex licensing terms and conditions, with the same number struggling to provide accurate licensing compliance metrics.

Just over eight-in-ten organizations carry out licensing audits at least twice a year, with 25% conducting audits continuously.

Meanwhile, a quarter report frequent financial penalties and legal actions against them.

“The results highlight a fundamental mismatch between the complexity of modern software licensing and the resources organisations rely on to effectively manage software compliance,” said Martin Thompson, founder of the ITAM Forum.

“ITAM and SAM professionals are becoming increasingly vital as organizations recognize that poor license management can result in significant financial penalties and operational disruptions. They must have the resources and executive buy-in to ensure compliance and successful license management.”

MORE FROM ITPRO

• Improving software licensing is the key to cracking hyperscaler cloud market dominance
• Restrictive software licensing means UK public sector bodies are overpaying millions each year
• Could 'fair source' software be the key to solving open source licensing disputes?

A system administrator at software firm Avaya has been indicted following his involvement in a fraud scheme that saw pirated licenses worth $88 million sold to co-conspirators over the course of several years. 

US courts said on Friday that Brad Pearce conspired with New Jersey-based businessman Jason Hines in what officials described as a “massive international scheme” to profit from the sale of pirated telephone system software licenses. 

Pearce, who officials said was a “long-time customer service employee” at the software firm, abused his sysadmin privileges to generate keys for IP Office software licenses. 

IP Office is a telephone system used by hundreds of small businesses across the United States and abroad. To access the system, users were required to purchase access keys from an authorized Avaya distributor or reseller. 

“Brad Pearce, a long-time customer service employee at Avaya, allegedly used his system administrator privileges to generate those keys without authorization, creating tens of thousands of them that he sold to Hines and other customers,” the Department of Justice said in a statement on Friday. 

According to earlier court documents on the case, Pearce was alleged to have abused sysadmin privileges to use former Avaya employee accounts to generate additional license keys. 

Thereafter, the licenses were purchased by Hanes’ company, Direct Business Services International (DBSI) - a New Jersey-based business communications systems provider and, up until recently, an authorized Avaya reseller. 

The scheme, which lasted several years, resulted in the sale of software licenses with a retail value of over £88 million. 

Officials added that Hines’ business was “by far” the largest customer in the pirated license scheme, purchasing over 55% of the total stolen. 

Hines pleaded guilty to conspiracy to commit wire fraud, officials said last week. 

As part of a plea agreement, the Department of Justice said it had agreed “not to advocate” for a prison sentence of more than five years. 

In addition, Hines must forfeit “at least” $2 million as part of the deal and make full restitution to his victims. 

For their involvement in the scheme, Brad and Dusti Pearce were charged with conspiracy to commit money laundering, as well as a charge of money laundering.

Pearce’s involvement in the conspiracy marks the second case this year in which a company employee has actively defrauded their employer, or colluded with outside individuals to do so. 

In May, a UK-based IT worker was convicted of unauthorized computer access and blackmail after hijacking a ransomware attack on his employer. 

Ashley Liles was found to have attempted to blackmail his employer, Oxford Biomedica, into paying a ransom in the wake of a 2018 security breach. 

Liles hijacked the ransomware attack and posed as the culprits in order to blackmail company executives into paying a ransom. 

A group of experts has stated that open source software (OSS) can be used to cut costs and boost UK GDP, but the potential won't be realised unless C-suites are better educated.

Leading industry figures from Red Hat, Deutsche Bank, and OpenUK believe that executives don't have an adequate enough understanding of OSS to realise the economic benefits of adopting it throughout their organisations.

The consensus among experts, speaking at an industry roundtable, was that OSS has underpinned businesses' competitiveness during the pandemic, but the ongoing misunderstanding at the top could lead to businesses sustaining undue costs and risks.

Businesses would benefit from understanding the true cost of adopting open source, while acknowledging the vast value that careful investment in these solutions carry.

“This year, the UK got in January to 3 million GitHub users, so we're hundreds of thousands ahead of the next country in Europe,” said Amanda Brock, CEO at OpenUK.

“So for the UK economy in particular, we're going to see GDP driven by open source. And that's going to be an interesting conversation at C-suite. How we get them to understand that, obviously, more things like this will really help but we do really need to work on that C-suite understanding.”

Joanna Hodgson, UK country leader at Red Hat, noted that a recent IDC report [PDF] found businesses could cut operational costs by up to 35% through Red Hat’s subscription services.

“I don't like this but every single survey that is done, every report, and if anyone can find one that doesn't say this please let me have it, [but] all say that their single biggest reason people use open source is cost saving,” said Brock.

“Now some of that could be misunderstanding because there is a cost to using it... whether you're doing it through an enterprise provider or doing it yourself, the implementation, the management, the understanding, the making sure it's done.”

Exploiting open source

The panellists noted that some companies incorrectly assume adopting open source software will incur no cost, as it is available through a free licence, and are then surprised by the costs associated with maintaining software, checking it is secure, and supporting the open source community.

With many large companies now heavily involved in open source, there is also an imbalance of funding for solutions such as Kubernetes while smaller projects have relied on dedicated developers working in their spare time.

Peter Thomas, distinguished engineer and head of cloud DevOps engineering at Deutsche Bank, said there is a belief in the industry that organisations can simply extract value from the open source community without contributing in return.

“There are vulnerabilities found every day. Things like that need constant support. And this is perhaps where their sort of cost comes in, it doesn't go from a high cost to zero, it goes from a high cost to a lower cost. It’s not zero, it's reasonable, and you need these processes that are in place.”

Implementation concerns

Regulated sectors such as telecommunications and banking have long been averse to integrating open source software into their stacks, due in large part to its perceived high-risk profile.

The panellists noted that 'new' can be scary when it comes to personal liability, particularly in the wake of highly-publicised vulnerabilities such as Log4Shell.

“I think banking is unique, financial services unique, especially in the UK,” said Monica Sasso, financial services EMEA chief technologist at Red Hat.

“When it comes to the liability piece and the regulatory piece, because you have the senior manager's regime where the bankers are guilty until proven innocent, there's no other industry to my knowledge that's like that.”

Need for support

Open source leaders have called for government funding to shore up maintenance costs of vital packages, and Brock has called for a “government mission” similar to public sector support of the national grid.

While more government funding has been suggested, enthusiasts have responded to legislative forays into the community by the US, UK, and EU with suspicion.

The DCMS’ consultation on how the UK government can support cyber security highlighted the open source as in need of guidelines to bolster security while boosting innovation.

“The open source software community is an important source of innovation, with contributions bringing new ideas, flexibility and agility to the tech sector,” the paper stated.

“Placing additional burden on open source developers could restrict this innovation, yet the open source community faces challenges in the development and maintenance of secure code, which takes time, tools and skills and could require further support.”

Brock added that White House proposals to put the liability on commercial distributors of open source software rather than developers have been watched hopefully. But in spite of its economic potential and regulatory backing, it is clear that existential tensions remain over the precise future of the community.

Open source software can be found in a huge number of businesses' stacks. Whether it’s to save on expensive software, to fix a problem that a devoted hobbyist has a solution for, or because of its lively developer community, open source solutions run throughout the tech sector.

However, in recent years security concerns have damaged the perception of open source software and vulnerabilities like Log4Shell left some IT leaders with headaches they aren’t keen to repeat. As the market expands, some open source developers find themselves under more pressure than ever before and questions have been raised around the duty of larger firms to help support the community they rely on.

In this episode, Jane and Rory speak to Keumars Afifi-Sabet, features editor at IT Pro and our specialist covering open source, to discuss the challenges facing the open source community and ask whether it will survive in its current form.

Highlights

“There are lots of open source software out there that might only have one or two maintainers working on them. And maybe one day they decide they don't want to do it anymore, and they start a new project. But by this point, thousands of companies might be using it. So you get into a position where who's maintaining this piece of software?”

“Because there's been this history of animosity from corporations like Google, like Amazon, AWS, towards the open source ecosystem, maintainers are inherently a little bit untrustworthy of this involvement and the growing influence of curation.”

“As Amanda Brock put it, who is the CEO of OpenUK, for open source either the community wins in the next five years, or it loses, and everything collapses.”

Read the full transcript here.

Footnotes

• What is open source?
• Existential tensions put open source on path to crisis point
• What is the Log4Shell vulnerability?
• Open source in open rebellion - can Google bring peace to the developer community?
• Microsoft Azure CTO hails 'most loved' Rust as the successor to C and C++
• Open source leaders call for permanent government funding package
• Linux Foundation unveils ‘World of Open Source’ research initiative
• Google unveils new Assured Open Source Software service
• Meta passes PyTorch ownership to Linux Foundation in a bid to improve transparency
• Daphne's Catflap
  

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Open source is hot right now – as OpenUK CEO Amanda Brock likes to say. But the ecosystem is, and has always been, in a delicate position.

In 2023 and beyond, open source faces a set of existential challenges that could undermine its viability. These range from the three regulatory regimes being devised in London, Brussels, and Washington, to a widening funding gap that may slide into financial starvation.

“We’re either going to win or we’re going to lose,” Brock tells IT Pro, when asked how she sees the community, and the ecosystem, evolving in the next five years. “We talk right now about open source being ‘hot right now’ and ‘having won’, but I think we’re at a teeter-totter.”

Sitting across from Google’s VP of infrastructure, Eric Brewer, she explains it can go one of two ways. Either the efforts they’re both pouring into education, as consumption accelerates, especially around user curation, will be a success, or things can swing “really hard” the other way. It’s especially true for large enterprises and the public sector. “[They could] turn around and say this open source is rubbish – it didn’t work – I’m going to stop using it.”

Brewer holds an optimistic outlook – as does Brock – and mass abandonment of open source remains a "nuclear" possibility, as Rust Foundation CEO, Rebecca Rumbul, puts it.

The increasing unease over government intervention, the role of corporations, restricting the use of software, and the lack of sustainable funding, however, all means we’re undeniably at an inflection point for open source.

Chipping away at what it means to be open source

Among the main anxieties rumbling throughout State of Open Con 2023, hosted by Brock’s organisation, was the very definition of open source and how to apply it. For instance, is a project still open source if it’s not open to everyone?

One particularly tense session, which focused on ethics in open source, saw two experts at loggerheads. PJ Hagerty, developer advocate and senior staff engineer at Spotify, clashed with the head of policy and innovation at Open-Xchange, Vittorio Bertola, who believed any restrictions on usage meant the project was no longer open source – and shouldn’t be referred to as open source. Hagerty, meanwhile, had no qualms about restricting usage on ethical grounds, with plenty of viable reasons why developers may want to do so. Some developers may not want their packages being used by law enforcement agencies, for example, while the AWS-Elastic controversy showed why “guardrails” were necessary.

Brock shares this concern that small but significant developments “start to chip away” at open source. “You sometimes see people creating licenses that aren’t open source licenses, for example, and holding them out to be open source, where they start to restrict things like commercial usage,” she says. “And the awful war in Ukraine – things like protestware around conflict, where people don’t want their code being used in other countries. It’s not a financial restriction, it’s a restriction by geography or people; these kinds of things chip away.”

Smothering open source with legislative support

Ahead of State of Open Con 2023, the department formerly known as DCMS published a consultation asking for views on how the UK government can play a role in security. Hot on the agenda is boosting security, particularly in light of incidents such as Log4Shell. The UK’s intervention follows the White House’s executive order on open source last year, as well as the EU’s forthcoming Cyber Resilience Act.

Both Brewer and Brock are encouraged by the language and intent of the DCMS paper – and how the UK might effectively, albeit belatedly, adopt a supportive role in the ecosystem. Brewer also remarks on constructive dialogue with the White House. There is, however, discomfort over how the EU’s legislation is shaping up, with confusion over some of the language used. For Rumbul, however, three regulatory regimes coming into force at once pose a material risk – particularly due to possible misalignment and confusion.

“You’ve got three different regulators – they’re all looking at open source, they’re using slightly different language, they’re focusing on slightly different areas, and they’re talking about slightly different solutions,” she outlines. “That, in itself – forgetting regulation alone if it’s poorly written could be a risk – the fact there’s this fragmentation even amongst three territories that should be pretty aligned – that’s going to be a risk for open source.

“Whether we like it or not, regulations can happen, we’re going to have to figure out how to work with them. If they’re poorly defined, or they’re pernicious in any way, even if they don’t mean to be, what we’re going to see is workarounds being used or unintended consequences.”

The trust deficit between communities and corporations

Putting the risk of government intervention to one side, ongoing tensions over the role of corporations in the open source community have not been assuaged – particularly where financing, and profiteering, are involved. Indeed, in light of the AWS-Elastic fallout, plus other examples, there’s still a ‘David and Goliath’ type of friction in the community.

“That power imbalance has always been a little bit uncomfortable between open source and proprietary – or between open source individuals and large companies,” Rumbul explains. “It’s worth remembering there’s a lot of mistrust sometimes in maintainer communities about big corporates, because [they] have been quite aggressive and disingenuous in the past.”

Although enterprises are “doing much better”, many still aren’t putting enough money into projects they’re effectively profiting from. With many more entities today – be it corporations, the public sector, or individuals – using open source software, too, some mistruths are gaining traction. “Open source isn’t free,” Brewer lamented in a public Q&A session, with Brock insistent open source consumers shouldn’t see adoption as a way to cut costs.

Brewer also touches upon the rise of curation, which plays a key role in the ecosystem. Curators often reside within corporations, and work to fix vulnerable code in software, much of which might, or might not be, well-maintained in the first place. Google, for example, launched a software-vetting initiative last year under the Assured Open Source Software brand. Often paid roles, curators have become hugely influential in software supply chain security, with Google predicting four in five enterprises will use curated software packages by 2025. Maintainers, however, who are largely unpaid and contribute code to projects due to an inherent passion, are weary of the growing influence of curators, largely due to the trust deficit between the community and large corporations.

“I hope we’ll see curation work, and I hope it’s something maintainers embrace and don’t feel threatened by,” Brewer pleas. “Actually, it can be great for maintainers, especially if it takes away some of the mundane work maintainers have to do. I think a good curator, for example, should be writing test cases and maintainers would benefit from [that].”

He sees the prevalence of a gap between a sense of purism – the “freedom and beauty of open source” as he puts it – and software that works with certain properties and most of the consumers. Although change is a “little bit scary”, getting curators and maintainers to cooperate could be mutually beneficial. “That gap exists, and it’s fundamental, and we have to bridge it. I think curation is by far the most likely way to do it.”

Funding the future of open source

Despite many for-profit entities playing a role in funding communities, meanwhile, others go against that ethos. Some for-profits, for instance, are beginning to put unfair expectations on largely unpaid maintainers to fix buggy or vulnerable code they use – to a deadline they set. Another cohort, that does fund projects, believes their donations award them priority status when putting in feature or fix requests. Governments, meanwhile, are becoming increasingly significant consumers of open source software – but have so far contributed nothing.

Everyone agrees the status quo isn’t working, and a long-term sustainable funding and maintenance model must be found, but nobody can agree on what this looks like or how to get there. To illustrate the issue, foundations like Rumbul’s can play a small role in maintaining their own communities – but they can’t do this effectively without certainty over funding, despite pulling in more than $2 million in donations per year. Currently, for example, she can only hire staff on one-year contracts, because this future income is not certain.

What about the proposals that are out there? Everyone is in agreement that governments must step in with cash, to some extent, while Brock also proposes a ‘United Nations’ for open source, comprising independent and government-funded curators, that allocate funding fairly and across the entire ecosystem. Rumbul favours a model akin to that of the Information Commissioner’s Office (ICO), in which member organisations pay subscription fees. Another developer suggested a Raspberry Pi-esque model. Companies like Data Bricks, Brewer says, perform curation and efforts like this should be encouraged and supported.

While there are, indeed, many reasons to be optimistic about open source, the frictions that have long existed aren’t close to being resolved and the ecosystem’s future is far from guaranteed.

Businesses in today's age need to do more with less. As usual, budgets shrink when a recession begins to take hold, which puts pressure on IT teams. Investing in tech has been high on the agenda, but organisations must now scale back, whether it's in slashing office costs, getting energy bills down, or reducing software costs.

Businesses can achieve more by working smarter, not harder. This means being strategic in the way they operate and making sure they're using their resources in the most effective way possible. Reducing software costs is feasible, but businesses must take care to make these savings in a responsible way, and try not to compromise on core business functionality.

Identify the biggest points of expenditure

The rapid shift to hybrid working dramatically increased IT spending. This, tied with economic concerns, has meant IT teams and the c-suite are under immense pressure to reduce costs without hindering digital transformation efforts, according to Helena Nimmo, CIO at Endava.

“There will be conversations about consolidations of systems, aligning IT with hybrid working and translating the value of the digital work done over the past couple of years into operational cost reductions. Even with the current increased rate of inflation,” she says.

Software spend takes up a significant portion of all IT spend, and with the SaaS model, it's near impossible to turn on and off. The cost of a SaaS application has many services wrapped into a single charge, and it is good to understand what these items are, says Nimmo.

"For example," she explains, "your contract might stipulate a certain storage quota and, once you are over it, you pay over the odds for the difference. Finding a way to stay within the quota for cost avoidance, or even reduce it for cost reduction, can be a piece of forensic work at the time of contract renewal, but is definitely worth it."

Guiding principles to reducing software costs

Beyond budget pressures, the ongoing supply chain challenges are reducing the supply of devices and components, pushing costs up. It can be difficult to identify where IT teams can cut costs without impacting productivity and satisfaction, says John Atkinson, director of sales engineering, UK and Ireland at Riverbed.

“The increasing prevalence of SaaS and hybrid cloud infrastructure make it challenging to monitor IT asset performance and usage, leading to bloated software, network and cloud spend,” he says.

“As a result, IT teams struggle to create a consistent, high-quality user experience. License tracking and other cost saving measures often fall by the wayside as many teams lack the tools to adequately monitor their infrastructure’s performance.”

One of the most important principles is to create an IT strategy that provides commonality and direction. Aligning the use of applications across the business, ensuring they are fit for purpose and making full use of their capabilities will realise the best cost efficiencies, according to Matthew Garrett, principal consultant at Entec Si.

"In larger companies, it's often the case that different applications are used across teams to do the same job," he says. "Aligning these applications and encouraging staff to adopt the same applications already in use in the business, rather than procuring new ones that get the same results, should reduce some of the spending on software,"

Searching across the business for greater efficiencies

For businesses looking to cut costs without losing out on functionality or compromising on quality, IT decision makers first need to understand how to make best use of their existing applications.

Through application rationalisation, Garrett says, businesses using multiple applications – for example, multiple document management systems – can to help relieve some costs. However, care must be taken not to compromise the integrity of core business operations.

“Rethinking the delivery of traditional infrastructure solutions and looking to use cloud-based options could also provide significant cost savings for larger businesses," he says. "A good example of this would be the use of a zero trust security model and tools to remove the need for a traditional WAN.

“For larger businesses with multiple offices, removing the need for traditional WAN can reduce costs, whilst moving to a cloud-based solution will increase user experience, security and connectivity to applications from locations outside of the office.”

Organisations should always strive to maximise the value of their software before cutting spending, agrees Simon Blunn, SVP and general manager EMEA at WalkMe. He advises asking employees whether they require any additional assistance or tools to get the most out of the software in front of them.

“A proper approach to digital adoption can help forestall aggressive cost cuts by making sure the technology organisations have invested in is being used to its full potential," he says. "Similarly, if users are able to fully utilise workplace software, the efficiencies gained will offset software costs through increased productivity."

Making new software arrangements

With the cloud and SaaS in ascendency, funding models for business software have changed. Greg Ouillon, EMEA CTO at New Relic, says that consumption-based pricing models are the future of SaaS and the best way for organisations to manage IT spend.

“In short, customers only pay for what they use," he explains. "This is critical during times where departments must justify every penny they spend. Traditional models forced teams to lock into multi-year contracts. For many, this resulted in under usage and wasted budget, or overuse and penalties."

Cloud models may have promised more flexibility around cost, but some products have not followed through on that initial promise, according to Tom Bridge, principal product manager at JumpCloud. “Look at products where you can see what you pay for on a per user basis, and what deals you can do by taking more of a bundled approach as well,” he advises.

A US senator is reportedly drafting a bill which could change the way that the federal government buys software, potentially impacting the way big tech companies sell their services to the public sector in the country.

According to Bloomberg, Gary Peters, a Michigan Democrat, is drafting the bill, which would force agencies to buy unlimited software licences instead of ones for a specific number of employees. These enterprise licences, which provide software for an unlimited number of users, can help save money by avoiding paying additional costs when software is overused.

The bill would ensure that government buyers would have to review all of their software, including rules on how it can be used on computers, servers, or cloud providers. Peters, who is the chair of the Senate Homeland Security and Governmental Affairs Committee, is still reportedly finalising the bill.

The US Government Accountability Office (GAO) found in 2014 that most agencies didn’t have adequate policies for managing software licences. GAO found that federal agencies weren’t adequately managing their software licences as they didn’t generally follow leading practices in that area.

Two years later, Congress passed a law, the Megabyte Act of 2016, requiring agencies to manage their software licences better and track their purchases. The new bill aims to build on this by also making plans to adopt government-wide licences for popular software as a way to further reduce costs and use its purchasing power to promote interoperability. It also demands agencies to underline any limitations in software licences and think of ways to minimise any restrictions.

The US federal government budgeted around US$92.2 billion for information technology spending in fiscal 2021, according to GAO. Its 24 government agencies negotiate contracts independently of each other.

Licencing rules have been a contentious issue between cloud companies in the past. In 2019, executives from AWS and Google Cloud hit out at Microsoft for changing how it charges customers for using its software on other public clouds. Some accused the tech giant of trying to lock customers into a single vendor with a complicated pricing structure.

This was followed by a leading competition law expert highlighting unfair and anti-competitive licencing practices enforced by major tech firms on customers globally in October 2021. Microsoft and Oracle were the primary targets of the report, which accused Microsoft of enforcing unfair licencing costs and charging customers more to use its products on third-party cloud platforms. The report also accused Oracle of enforcing licencing restrictions which led to a 10x increase in price when using Oracle software in a third-party cloud platform compared to running it on the cloud giant’s Infrastructure.

Popular toolkit Akka, which to date has been available as an open source solution, is set for a licence change that will see it become a paid product.

Akka, developed by Lightbend, is used for the creation of apps for the Java Virtual Machine (JVM). It has been implemented by a wide range of companies, including BP, PayPal, Verizon, Epic Games and Shopify.

Since its inception in 2009, Akka has been available on the open source Apache licence, but Lightbend has now announced that from v2.7 (due in October) it will fall under the Business Source License (BSL), marking a departure from a totally free model that relied on donations.

Under the new plans, the standard licence will be available for $1,995 per core annually, whereas the enterprise licence will be available at a steeper $2,995 across the same period. Lightbend has indicated that the change was necessary in order to maintain funding at the levels necessary to support the firm's plans for growth.

“In recent years an increasing number of those organisations have elected to self-support without either contributing back to the community or by investing in annual subscriptions,” Lightbend stated in a blog post.

“We have an ambitious roadmap for the future of Akka and require a way to fund and sustain that development.”

Any company that uses Akka in its production process will be affected by the licence change, but those with annual revenues of less than $25 million will be given the licence at no extra cost. Moreover, after three years under BSL, it'll revert back to the Apache licence.

Additionally, developers currently using Akka will be able to continue using the toolkit, but Lightbend will cease security updates and bug fixes for all current versions going forward. Those using the framework for open source projects have been urged to contact Lightbend directly, to discuss options.

Reaction throughout the developer community has been one of general disappointment, but talk has already turned to alternatives to Akka on Twitter.

Open source software has long been used by companies and enthusiasts alike, and carries a range of benefits such as the potential it offers for crowd-sourced solutions to development problems. But recent concerns over the Log4Shell vulnerability have led to serious discussion over the security viability of open source in the long-term.

This Spring, Google revealed a new Assured Open Source Software service to protect the supply of open source software in the Google Cloud ecosystem, and to provide developers with the same packages as Google itself uses.

Enterprise cloud and storage company Nutanix has been accused of violating its open source licence by object storage platform MinIO.

MinIO said Nutanix failed to provide IP guarantees and source identification to its users, flouting a core principle of the open source model.

“Nutanix has been in continued violation of the Apache v2 and we believe they may also be in violation of the GNU AGPL v3 versions of MinIO,” the company said.

Garima Kapoor, co-founder and COO at MinIO, clarified the accusations further in a post on Linkedin, adding that “Nutanix has failed to convey MinIO’s original license headers and the text of the license, as well as the included patent and copyright licenses.

“Stripping off license headers on purpose to pass innovation from a start-up and showcasing it as their own is a willful infringement and more important against business ethics,” she added.

As a result, MinIO has revoked Nutanix’s licence or sublicence under Apache v2 and GNU AGPL v3,” it said in a blog post.

MinIO also claimed that it had been in discussions with Nutanix for three years, trying to resolve the compliance issues in good faith, however the company “has not made meaningful progress”.

The company said open source licences are critical for helping users understand from where their software originates, while also helping to improve security through transparency.

“It also guarantees basic freedoms of use and distribution,” said MinIO.

“We are disappointed to have to call out Nutanix, but we must protect MinIO users and ensure they understand the rights they are owed by Nutanix,” it added.

Nutanix told IT Pro that the company recognises "the value of the open source communities and take our participation and stewardship very seriously".

"With respect to some recent allegations in a blog that we may have used software in possible violation of an open source license in our Objects product, please note that Nutanix stands behind our products, including any open source that we incorporate into them, and commits to indemnifying our customers against intellectual property claims arising out of the use of our products, should the need ever arise.

"We will be reaching out to engage with the blog’s author promptly and will continue to update the community here," it added.

MinIO alleges that Nutanix has been distributing its object storage technology throughout the Nutanix Objects stack since its introduction in 2018, but has not disclosed this to its users.

Updated earlier this month, the documentation for Nutanix Objects does not mention MinIO and accessing the details of the product’s associated open source licencing requires a Nutanix customer login.

What MinIO's investigation found

MinIO published its step-by-step method of discovering the evidence to support its allegations.

1. The company created a Nutanix Object Store from its UI
2. Entered an SSH to MSP command:
   nutanix@PCVM:~$ mspctl cluster ssh [cluster_name]
3. Attached to the object controller pod using the command:
   kubectl exec -it object-controller-0 -- bash

MinIO said its object storage binary was found in the Nutanix object controller pod and can be seen in the screenshot above.

“Nutanix just put a wrapper around a modified version of the MinIO binary inside their object storage platform,” MinIO said. “Nutanix also did not disclose the usage of MinIO in their Open Source Disclosures or EULA to their customers.

“Ultimately, this is about innovation,” it added. “MinIO continues to innovate in the space and we have worked tirelessly to create the best object store on the market. We are proud to defend that work.”

MinIO advised Nutanix Objects customers to assess their exposure to legal and security risks since they may not be on the latest version of MinIO Object Storage software and may not be receiving adequate IP licences from Nutanix.

In the world of business technology, Microsoft has been a firm fixture for decades, and its flagship operating system forms the backbone of many organisations’ IT strategies. Windows remains the dominant platform used by most companies for their desktop and laptop fleets, and as such, the question of how best to manage their Windows deployments is one that many IT leaders have to grapple with.

Keeping business devices up to date with the latest Windows versions is a key part of maintaining a strong security posture, but this must also be balanced with other concerns like potential compatibility issues, as well as the planning and organisation involved in performing any large-scale migration.

Microsoft is currently in the process of rolling out Windows 11, an all-new version of its OS software, and as deployment gears up, we checked in with our panellists to find out more about their plans for upgrading to the latest version, as well as their tips for planning a smooth migration, and what influences their choice of desktop platform.

Clash of the titans

Unsurprisingly, all our panellists reported running Windows devices within their organisations. While Windows retains the largest market share in terms of business devices, the gulf between it and its competition isn’t as vast as it once was. Apple has been particularly successful in establishing a foothold with developers and engineers, and almost all our panellists reported their software developers had a preference for macOS devices.

Moonpig, for example, gives all its staff the choice between Mac or Windows machines, and CTO Peter Donlon reports that although most of the business is split, the majority of his technical staff have opted for the former.

“When you think about the amount of effort you put into hiring great people and then you pay them good salaries, why would you force them to use a tool that's suboptimal for them? For a lot of our engineers, it's a lot more efficient and comfortable to work on a Unix-based operating system,” he says. “Equally, for people in the finance team, they very well might be more comfortable and experienced with using Windows. I feel it's the job of IT to enable everyone in the business to do their best work and as such the right choices of equipment are a key part of that.”

Tempcover’s staff have a similar choice, CTO Marc Pell says, but in contrast to Moonpig, most are on Windows. Having access to a macOS device, however, is “necessary for certain app development”, Pell notes.

For Guide Dogs CIO Gerard McGovern, meanwhile, the issue is a little less clear-cut. He’s a personal user of both platforms, but points out that, for larger organisations, Microsoft has a couple of key advantages that makes Windows a more compelling option.

“I agree to a point,” he says. “For engineers, et cetera, there are clear advantages and that's why they use Macs. Personal preference is nice to be able to cater for, but Macs are more expensive and the business level support is not great, so when you have 2,000 people, those differences add up.”

Unlike Tempcover, Moonpig and Guide Dogs, Kreston Reeves does not offer its staff a choice of platforms. Instead, workers are supplied with a Windows-based HP laptop, with centralised compute resource provided by Citrix’s desktop virtualisation software, but as director of IT Chris Madden explains, this lack of choice is driven by necessity.

“We are an accountancy practice,” he says, “and some of our key software has to run on-premises as no cloud versions are available. Some examples are tax production software, practice management software dealing with time and fees, et cetera.”

“There are no real alternatives,” he adds. “Occasionally there may be an option to move to a vendor who has a cloud product, however that is arduous and involves re-training hundreds of people. That hidden training cost is quite a barrier to change. We also go for a best-of-breed approach on our specialist software so a move away may well be seen by my colleagues as a step backwards.”

Ironing out the kinks

This also governs how quickly Kreston Reeves can update its endpoints, as the software it relies on may not be upgraded to be compatible with newer operating systems for some time after their initial rollout. Waiting until the newer version is a little more mature also reduces the likelihood of bugs and instability, which is attractive for organisations with a lower risk tolerance.

For those with less reliance on specialist software tools, the decision to upgrade their fleets can be approached with more flexibility. McGovern, for example, is planning to have the majority of his users migrated to Windows 11 by February next year. Although Guide Dogs has some software that requires Windows 10 - such as programmes used in its breeding centre - McGovern says he isn’t going to let this delay the rollout.

“We are relatively simple in our requirements,” he says; “90% of our users just use Office and web apps. We've been doing testing and there are some specialist tools we have that aren't compatible, so we’ll be pausing those.”

Moonpig has also been running a pilot programme to assess any compatibility issues with Microsoft’s newest refresh, and notes that there have been one or two hiccups that may prove to be a small barrier, most notably with security products like VPN and endpoint protection solutions. However, the company prefers to keep its machines as up-to-date as possible, and Donlon says that he expects the migration to be taken care of relatively quickly.

“If the compatibility issues are resolved quickly, it could be within a month or so,” he says. “I can't imagine it being more than a few months. Ultimately our requirements are fairly simple as 99% of the software our colleagues use is SaaS. It's just making sure it's secure.”

When Tempcover does decide to migrate, Pell predicts a smooth transition, largely down to the fact that neither hardware nor software compatibility will be an issue.

“There are a couple of programs that need a Windows machine, but we have Parallels to thank in these cases,” he explains. “With Microsoft’s Mac support with tools like Visual Studio Code, we can work on the app (which is built in React Native) with ease.”

If it seems like our panellists’ migration plans for Windows 11 are somewhat lacking in urgency, that’s because they were in universal agreement that it’s distinctly lacking in must-have features. Although the need for continuing security updates means they’ll need to upgrade sooner or later, there’s very little about Windows 11 our panellists found overly compelling.

“To be honest, I’ve not found any new features worth calling out in day-to-day use, apart from the time prediction on installing Windows Updates which is a nice touch”, Pell says. “We’ll migrate users at some point next year, but we’re in no particular hurry. I wouldn’t be surprised if, in a number of cases, the upgrade coincides with a hardware refresh too - again because I’m yet to see the justification for the effort.

“We may also provide a guide and permission to perform the upgrade to staff who are comfortable to do so. We have a heavily IT-literate staff so this is a possibility with a light touch from a support perspective.”

Similarly, Madden says that he hasn’t identified any USPs for Windows 11, aside from some “low-level automation functionalities” which will be rendered somewhat redundant by Kreston Reeves’ likely deployment of Microsoft’s own Power Automate platform.

“For us, it's a better UI/UX, especially on the assistive side,” McGovern says. “The contrast options are better, there’s more audible alerts, and tweaks to magnification and text to voice.”

He adds that the overall UI is better than its predecessor, but even McGovern notes that the new OS is “more of a Windows 10 Service Pack”.

Slow and steady

With this in mind, it’s easy to see why IT leaders might want to delay the planning and execution of an OS migration, which can be a stressful endeavour if not managed correctly. Donlon’s main strategy is to gather continual feedback from test users to identify any potential issues, and McGovern follows a similar approach.

“Appoint a good project manager, build the team, engage with end users, test in small numbers, roll out gradually, learn from mistakes, feedback into process, cross your fingers and hopefully, you should be all done.”

Unlike with other software rollouts, however, user education and training isn’t a priority for our panellists when it comes to new operating systems. As Donlon points out, the gradual rate of change - particularly given the lack of new features in Windows 11 - means there’s not much to adjust to.

“In my opinion,” he says, “OS updates tend to be very incremental these days so there's not that much to learn from version to version. We do have a fairly tech-savvy organisation though, so I can appreciate that it might be different for others.”

“I would agree,” Pell adds; “it’s familiar enough not to cause staff any disruption, I would think.”

Fundamentally, desktop devices remain the bedrock upon which business IT is built, and how one manages the software that powers them will vary depending on an organisation’s priorities. Madden, for example, needs to keep a close eye on software compatibility, while Moonpig’s and Tempcover’s reliance on cloud and SaaS-based tools mean that for both Pell and Donlon, it’s more an issue of personal preference. McGovern, on the other hand, takes a more practical view.

“Whilst software is cloud based, for us the standard OS route is about providing a consistent experience,” he explains. “We can ship a laptop out and someone logs in and everything is set up. It will automatically download settings, documents etc and automatically work on a corporate Wi-Fi, VPN et cetera.”

“Our philosophy is to allow people to access from anywhere, on any device so we support nearly every scenario, but there is a difference when it's a corporate bought and supplied device. And, as well, whilst cloud apps are good, people still mostly prefer the ‘real’ Office and Teams apps.”

A leading expert on competition law has published a report illustrating the "unfair" and "anti-competitive" licensing practices enforced by major tech firms on customers globally.

Microsoft and Oracle are the primary targets of the report, which details the alleged long-running anti-competitive practices used by major firms in the software and cloud services industries.

Professor Frédéric Jenny's research on cloud infrastructure service providers in Europe (CISPE) has been distributed to MEPs, the European Commission (EC) and the European Council as they debate and vote on the Digital Markets Act (DMA).

“Our research has shown that the position of certain large cloud infrastructure providers in the adjacent markets, notably Microsoft and Oracle, has enabled them to engage in potentially anti-competitive strategies to exclude other cloud infrastructure providers from the market,” the report authored by Jenny reads. “Moreover, these strategies have been an engine of growth for those integrated cloud service providers.”

The DMA is a legislative proposal brought forward by the EC to stamp out unfair and anti-competitive practices exhibited by digital platforms, typically those with dominant market positions looking to increase their share in adjacent markets.

It has been proposed following the recent high-profile US antitrust cases brought to the likes of Facebook and Google, but Jenny's report takes aim at two other tech giants in particular.

Among other industry-wide unfair practices, the report accused Microsoft of enforcing unfair licensing costs and charging customers more to use Office and Server software on third-party cloud platforms, citing the case brought to Microsoft by the Danish Cloud Community and the European Commission in 2018. In this case, Microsoft raised the price for software subscriptions but left them untouched for customers using said software within its own cloud environments, Azure and Windows 365.

The report also accused Oracle of enforcing licensing restrictions which lead to a 10x increase in price when using Oracle software in a third-party cloud platform compared to running it on Oracle Infrastructure as a Service (IaaS). Oracle has also been criticised for enforcing technical and billing requirements on a per-CPU basis.

“If Oracle software is used in Oracle IaaS then companies are only require to pay for the number of actual CPUs used while it used on third-part IaaS equipment, the company is required to pay for a licence for each CPU that could be used to run the software, whether or not it actually is,” the report said.

The researcher also conducted a series of interviews with cloud customers to gather further evidence against the unfair practices in the sector. These revealed additional practices such as limits to interoperability involving technical limitations such as enforcing proprietary languages to make migration more difficult, and switching costs which may be significant both in monetary and time-duration terms, the report notes.

Exclusionary licensing practices were also highlighted in the report with one case study reporting that Microsoft imposed an ‘after-the-fact’ change to its licensing policy after the customer decided to switch to Amazon Web Services (AWS). This saw the customer forced to pay for individual Office licenses on each computing instance, raising the annual cost tens of millions.

These examples of exclusionary licensing can also be found in third-party interfacing - accessing a service through a third-party application. SAP’s Indirect Access was cited as an example of this, whereby users incurred additional surcharges for accessing the SAP ecosystem through a third-party application, effectively creating an active log of ‘indirect usages of SAP software.

Other notable unfair practices include: artificially limiting data portability to make it expensive if not impossible to use competing cloud infrastructure and the removal of Bring Your Own Licence (BYOL) deals whereby customers are forced to pay again to use software they already own on competing cloud infrastructure.

“This independent study by Professor Jenny, a recognised economist, objectifies the observations made consistently by Cigref members over many years," said Henri d’Agrain, Secretary General of Cigref, the French CIO Association.

"It provides a factual assessment of the economic consequences of the unfair practices that Cigref regularly denounces. It is important to regulate these practices, which are mainly carried out by non-European providers. These practices constitute an illegitimate drain on the European economy and contribute to stifling the digital innovation of European players through killing acquisitions.”

Alban Schmutz, Chairman of CISPE, concluded: “We’d heard from our members, and from their customers, that certain legacy software providers were limiting choice in cloud infrastructure through unfair license terms. We commissioned Professor Jenny to make a study of these practices and their impact, to support the Principle of Fair Software Licensing we crafted with Cigref. The Study clearly demonstrates the need for the Principles, and for the DMA to include them within its provisions. This is a significant issue which requires legislation as well as voluntary adoption of our Principles to ensure compliance and a better deal for European businesses and consumers.”

IT Pro contacted Microsoft for comment but it did not respond at the time of publication. Oracle declined to comment on the matter.

When people think of licence management, often they focus on ensuring they’re using legitimate copies of Windows and Office. Unfortunately, that only covers what former US defence chief Donald Rumsfeld memorably referred to as the “known knowns”. The sticky part of licence management is getting to grips with the “unknown unknowns”. People do strange things with computers, and even on a well-managed network you can find little fan clubs keeping old applications and variant releases alive, without giving the slightest thought to licensing.

Take activation, for example. For some, it’s a clear indication that an application is legitimate and there’s no need to worry, but activation alone doesn’t prove anything. Software can deactivate itself for all sorts of reasons: Some apps have time limits, some won’t start unless they can contact their licence server, some will only run in a particular region (and only reveal the fact once you’ve landed for your overseas business trip) and so forth.

Then there’s the issue of software that happily activates itself but still isn’t legal, owing to some contravention of the small print. For example, you might have a valid licence, but not the right one for professional use or for the hardware on which you’re running the software. According to the absolute letter of some software licences, you could be in violation by simply restoring an installation of the software from a backup. Being advised to contact your insurer for a new software licence is not unusual – shameful, but not unusual.

A simpler life in cloud and open source?

If your line-of-business apps are hosted on the cloud, licencing is less likely to be an issue, but it’s still not a sure thing. Arguably, the administrative burden goes up because it’s on you to ensure you’re not overpaying for oversized server instances and excessive bandwidth; the cost of getting such things wrong can be not only steep but also recurrent.

In the face of these challenges, it’s easy to think that a move to using open source software would be an easy solution. In reality, however, this type of software is licensed too – and some seemingly free packages are supplied under terms that are at least as awkward as those accompanying commercial software. By all means, rely on the open-source agreements you’ve got, but make sure you understand what might be expected of you the day that the compliance team drops by to give you a checkup.

Handling legacy systems

For many established businesses, some of their systems were set up years ago, making it harder to determine if old apps they’re running are appropriately licenced. Indeed, a typical office computer often has a service life longer than the required (or actual) document retention period. In many cases, however, licences are bought through a reseller, which should be able to provide a purchase history. It also makes sense to start keeping your own records, if you’re not doing so already. Check the end user licence agreements for anything running on your network too – and before you invest in new software, consider seeking a legal opinion on the licence.

Finally, don’t rely on the software publisher to give you the heads up that a licence contract is coming to an end. If you’re buying your code directly from the developer, you might reasonably expect some old-school customer service, and an understanding approach to any licence issues. But in the ruthless corporate world of software-as-asset, you’re unlikely to get any warning ahead of a brusque letter from your local compliance agency. Your best bet is to ensure your house is in order before things get hairy.

Microsoft has suggested it will launch its Office productivity suite of apps and services in the form of a refreshed ‘perpetual licence’ edition, two years after the launch of Office 2019.

Expected to be sold at a standalone cost to customers on Windows and Mac, this variety of Microsoft Office will bring the apps and services that compromise the Microsoft 365 suite to enterprises that don’t wish to buy a subscription.

The perpetual licence, touted to launch in the second half of 2021, may come as welcome news to businesses not yet fully enticed by the nature of cloud services.

Office 2019, launched for Windows 10 devices two years ago, was released with a reduced extended support period against that offered in previous offline editions, namely Office 2016.

Although Microsoft offered five years of mainstream support, lasting through to 2023, the firm would only offer an additional two years of extended support, with updates ending on 14 October 2025. This was in order for the Office 2019 end-of-life cycle to align with Office 2016.

The announcement of another standalone Office suite, likely to be named Office 2022 based on historical naming conventions, suggests Microsoft has backed away from intentions to phase out this form of software launch. The firm had previously hinted it would abandon standalone releases and instead encourage its customers to opt for subscription-based services, honed by the launch of Microsoft 365 earlier this year.

"Software that is more than a decade old, and hasn't benefited from this innovation, is difficult to secure and inherently less productive,” Barnardo Caldas, general manager for Windows and Jared Spataro, general manager for Office said in a joint blog post to mark the launch of Office 2019, for instance. “As the pace of change accelerates, it has become imperative to move our software to a more modern cadence."

The firm announced the expected launch of a new ‘perpetual licnece’ for Microsoft Office alongside updates on Exchange Server as part of its Microsoft Ignite 2020 event.

The apps and services that will be available with this edition of Microsoft Office are also yet to be confirmed, although Office 2019 launched with a host of services, many of which are likely to be bundled into the release again.

These included Word, Excel, PowerPoint, Outlook, Publisher, Visio, Access, and Project at launch, as well as Exchange Server, Skype for Business Server, SharePoint Server, Project Server and Office Online Server released later down the line.

Microsoft has said it would share additional details around the official names, pricing and availability of this edition of Microsoft Office in the near future.

Members of an online forum have developed a tool that could be used to bypass eligibility checks for Windows 7 extended support and receive free updates after the OS reaches end-of-life.

Only a handful of Windows 7 users can continue to receive updates from Microsoft through its paid-for Extended Support Updates (ESU) programme after 14 January, through to January 2023.

This scheme was first introduced for enterprise customers in August and later extended to SMB users after Microsoft identified “challenges in today’s economy”.

The ESU programme is not available to all businesses, however. Users on tech support platform My Digital Life have therefore developed a prototype tool that could theoretically allow ineligible businesses to continue to receive free updates beyond 14 January.

Before ESU patches are beamed to eligible machines, Windows 7 performs a check to determine whether or not users can receive these updates. This involves the installation and activation of an ESU license key. The created tool bypasses this eligibility check, which is only performed during installation, so users would, in theory, continue to receive Windows 7 updates for free through the ESU scheme without paying an ESU subscription.

The bypass was tested on the Windows 7 update KB4528069, a dummy update which was issued to users in November so they could verify whether or not they were eligible for extended support after 14 January.

Although the tool has worked on the test patch, its creators urged My Digital Life forum members to consider this as a prototype, and not a fully-fledged workaround, as things may change by February 2020.

Microsoft will be keen to ensure there aren’t any ways to undermine the ESU scheme once Windows 7 reaches end-of-life due to the sums it’s charging eligible businesses, and an ultimate desire to shift machines to Windows 10.

The firm is likely to change the way the eligibility check is performed given how simple it’s been proven to bypass.

It's certainly not a tool that Microsoft is likely to condone, but it does demonstrate the extent to which Windows 7 is still popular as users are trying to retain undisrupted access to the legacy OS.

Businesses have just weeks to upgrade their devices running Windows 7 and Windows XP or face restrictions on accessing critical security updates.

Microsoft has reversed its stance on a controversial self-service scheme that would have let employees within an organisation bypass their IT departments to buy licenses for three Office 365 products.

Earlier this week the firm announced that its self-service purchase scheme for Power Platform products would roll out from 19 November. This would allow users to pick up licenses for Power BI, PowerApps and Flow using just their Azure Active Directory (AD) login details and own payment details, without having to consult with their IT departments.

Microsoft's initial rationale was that the self-service scheme follows a model for modern working habits, in which employees crave more autonomy over choosing which tools and services they use.

However, news of the scheme sparked widespread anger among the IT community, with many arguing it would undermine official procurement policies and potentially cause chaos with company budgets.

Principally, though, it meant IT administrators would lose control over who could purchase and install Office 365 software, with critics claiming it would worsen the issue of shadow IT, already a major business headache.

Customer feedback posted beneath Microsoft's original FAQ was almost exclusively negative, with many questioning Microsoft's thinking.

Customer feedback to Microsoft's self-service scheme was almost exclusively negative

Microsoft issued an update yesterday, in light of the response, suggesting it would now provide IT admins with a way of turning off self-service purchasing within their organisation via PowerShell. Details behind the exact mechanism, however, weren't offered, and the self-service scheme is otherwise still going ahead.

The rollout date, however, has also been pushed back from 19 November to 14 January 2020 in order to give businesses more time to prepare for the changes, the company added.

Microsoft maintains that the scheme will create a greater sense of independence for employees, and meet a "demand from both users and organisations to allow users to buy subscriptions on their own".

"In today's world, end users and departments are increasingly seeking out and buying technology solutions on their own," the firm said in its updated FAQ.

"We've received numerous requests from these customers to enable self-service purchase of Power Platform products. We're responding to this customer need while also balancing the needs of IT administrators, who often at times lose visibility and control when individuals within their organisation adopt third-party solutions without their knowledge."

Microsoft will still launch self-service purchasing from 14 January in the US, starting with Power BI. These changes, however, mean IT admins can restrict users within their organisations from participating, effectively undermining the principle of self-service altogether but restoring the status quo.

Microsoft has widened its Windows 7 extended support programme to cover small and medium-sized businesses (SMBs) after the soon-to-be legacy operating system (OS) reaches end-of-life next year.

From 14 January 2020, businesses using Windows 7 will no longer be supported with critical security updates and patches free of charge, and are instead expected to have migrated to Windows 10.

The Extended Security Updates (ESU) scheme allows eligible organisations to continue to receive paid-for security updates through to January 2023, sold on a per-device basis with costs rising each year.

In light of "challenges in today's economy", Microsoft has extended the ESU programme to all businesses. Previously, it was reserved for Windows 7 Professional and Windows 7 Enterprise customers in Volume Licensing.

"Small and midsize businesses face many challenges in today's economy," Microsoft 365's corporate vice president Jared Spataro said.

"From engaging customers in new and different ways to attracting and retaining talent to remaining secure amid evolving threats, it's not easy to stay ahead of the curve," he added. "The right tools help you meet those challenges, ensuring employees can be innovative and productive while your assets stay secure.

"While many of you are well on your way to deploying Windows 10, we understand that everyone is at a different point in the upgrade process. With that in mind, today we are announcing that, through January 2023, we will extend the availability of paid Windows 7 Extended Security Updates (ESU) to businesses of all sizes."

Microsoft announced in August that enterprise customers would receive an additional 12 months of free security updates for the soon-to-be-retired Windows 7.

Enterprise Agreement (EA) and Enterprise Subscription Agreement (ESA) customers with active Windows 10 Enterprise and Microsoft 365 subscriptions will continue to receive these updates for free.

Microsoft's extension of the ESU scheme suggests there's been a slower than hoped upgrade to Windows 10 among businesses.

The 'crossover' moment between Windows 10 and Windows 7 popularity occurred towards the end of 2018, while Windows 7 market share only began to decline in March.

Businesses will be able to purchase an ESU through the Cloud Solution Provider (CSP) programme from 1 December 2019.

Windows Insiders have been given access to the beta version of the Windows 10 Spring 2020 update, which features a redesigned tablet mode' user interface (UI) for customers of 2-in-1 devices.

In a major departure from the firm's tablet-first mantra of the past, the visual interface when users switch their 2-in-1s to tablet mode will be more desktop-like than ever before. The major design changes include collapsed search and Cortana buttons, increased spacing between taskbar icons and a touch keyboard that auto-invokes when users tap text fields.

The current tablet mode' featured in the latest version of Windows 10 differs in a host of ways from the touted changes, in a sort of hangover from the Windows 8-era days of its tile-based UI.

The start menu, for example, kicks users into a tablet-optimised full-screen tile layout. It's these kinds of features, however, that Microsoft is now reversing and making more desktop-like while keeping touch-optimised elements of the existing UI.

Some of the changes set to be rolled out to 'tablet mode' with the Spring 2020 Windows 10 upgrade

The altered UI is only available to a portion of Windows Insiders as Microsoft receives feedback and makes changes to the system ahead of its full release next year. It's also only available for users on 2-in-1 devices like the Dell Latitude 7400 2-in-1 and the HP Elite X2 1013 - not dedicated tablets using the Windows operating system (OS).

Microsoft is also using its latest preview build to introduce a new cloud download option for users who wish to reset' their version of Windows.

The cloud download option will reinstall the same OS build, version and edition installed on users' devices, and differs from a specific cloud recovery feature that was available on previous iterations of Windows 10. This form of recovery removes all apps installed on a device, and may also delete local data if users pick this option.

These features may give added incentive to the scores of businesses still using Windows XP and Windows 7 to upgrade their OS to the most secure and stable version of Windows. There are, indeed, a "concerning" number of businesses still reliant on these legacy systems, according to research released this week.

Microsoft has, however, offered select organisations still using Windows 7 an extra year of free support beyond the 14 January end-of-life date should they qualify.

Microsoft is offering its enterprise customers an additional year of free support for the soon-to-be-retired Windows 7 operating system (OS) beyond its end-of-life cut-off date.

With general support for Windows 7 ceasing on 14 January 2020, organisations have been urged to upgrade their devices to the firm's flagship Windows 10 OS as soon as possible.

Large enterprises and government organisations unable to meet this date, however, have been given until 31 December to opt-in to a promotional offer giving them access to 12 months of Windows 7 updates for free.

The offer has been extended to Enterprise Agreement (EA) and Enterprise Subscription Agreement (EAS) customers with active Windows 10 Enterprise and Microsoft 365 subscriptions only. These users will continue to receive essential security updates for free.

Organisations ineligible for the offer can still opt-into Microsoft's Windows 7 Extended Security Updates (ESU) programme, which offers paid-for support through to January 2023. This will be sold on a per-device basis with the price expected to rise each year.

Discounts will be available to organisations with Windows 10 Enterprise, Windows 10 Education or Windows software assurance subscriptions.

The promotional offer amounts to the first year of the ESU provided without cost, with organisations charged on a per-device basis in subsequent years in line with the remaining period of the programme.

To qualify, subscriptions must stay active throughout the full ESU coverage period, or the free year of support will expire with the end of customers' subscriptions.

Microsoft has maintained that this programme, and its promotional offer, serves only as a last resort for businesses unable to upgrade in time for the 14 January end-of-life date.

The company has been working with a number of organisations, including the NHS, to upgrade devices from the legacy OS to Windows 10. One such programme for example, outlined last year, involves NHS Trusts joining a free Windows 10 migration service.

Microsft will overhaul the way it deploys its biannual Windows 10 upgrades in light of the high-profile April and October 2018 Update disasters.

Conventionally, Microsoft would initiate updates on Windows 10 machines automatically once its data indicated that users would enjoy a safe and frictionless experience. But starting with its next major flagship upgrade version 1903, which will be released on 10 May, users will instead be notified that the update is available to download and install.

Moreover, these big feature updates can now be initiated independently to essential security updates downloaded via the check for updates mechanism. Updates can also be deferred for up to 35 days.

This is in addition to several major changes around the processes Microsoft employes to ensure development and release goes smoothly. This includes an extended preview stage, and added machine learning capabilities to flag any potential issues.

A public Windows release health dashboard, meanwhile, will communicate key decisions clearly and frequently, according to Microsoft. This interface will resemble the Windows 10 Update History page, but features near real-time information on the rollout status and known issues across both major and minor updates.

"We believe the steps we've taken provide Windows customers more choice and control on updates while continuing to enhance our focus on quality," said Microsoft's corporate vice president Mike Fortin.

"With a more robust and longer Release Preview and further investments in machine learning for both high-severity issue detection and our next generation of intelligent rollout, our goal is to provide the best, transparent Windows update experience."

Microsoft hopes the May 2019 Update will mark a step-change from the notoriety gained following the April and October 2018 releases, which were collectively riddled with several catastrophic bugs and deployment troubles.

Last spring's release, version 1803, caused a handful of machines to experience the infamous 'blue screen of death', or sparked reboot problems, within 24 hours of installation.

This pales against a litany of issues users encountered with October's version 1809, the most significant being a critical file-deletion bug. These errors led Microsoft to suspend its initial deployment, then later re-releasing the update, suspending it a second time, releasing it for Windows Insiders, then making it publicly available a third time in mid-November.

But this third release was only available for users to manually download themselves by checking for updates, with Microsoft not deeming the upgrade safe enough to deploy automatically until just last week.

The May 2019 Update will become available in its release preview stage from next week, with Windows Insiders gaining access to the new features over the next month. This will then become generally available to Windows 10 users via the new 'download and install now' mechanism from late May.

Microsoft has recommended that IT administrators begin validating the apps, devices and infrastructure used by their organisations to ensure they work well with the release before deploying version 1903 broadly.

Months after releasing the first iteration of the botched October 2018 update to Windows 10, Microsoft has designated version 1809 safe enough to release to businesses through its servicing channel.

This major upgrade to the firm's flagship operating system, Windows 10 version 1809, was initially made public in early October last year. But it was recalled and re-released several times over the following months due to a swathe of critical errors.

These include reports of incompatibility with drives, reduced battery life, and a severe file-deletion bug. Further glitches were detected after Microsoft pulled the release and made it available to just Windows Insiders, including a second file-deletion bug that affected compressed ZIP folders.

"Based on the data and the feedback we've received from consumers, OEMs, ISVs, partners, and commercial customers, Windows 10, version 1809 has transitioned to broad deployment," the company said.

"With this, the Windows 10 release information page will now reflect Semi-Annual Channel (SAC) for version 1809. We will continue to communicate for future releases the transition from targeted to broad deployment status."

Although version 1809 was made publicly available again in November, users could only upgrade to the latest version of Windows 10 by manually checking for updates, or via external media.

The company said at the time it would learn from its mistakes in the way it rushed the April 2018 update, and take a phased approach to releasing the October upgrade. And only now has version 1809 been finally declared safe enough for broad deployment across its consumer and business user base.

This decision has incidentally been made just weeks before Microsoft is set to release its next massive upgrade, known as the April 2019 Update, or version 1903.

In the wake of its recent string of upgrade disasters, Microsoft has also begun early testing elements due to be released in a major 2020 upgrade. This was despite testing for the October 2019 update having yet to be commenced at the time of writing.

Apple has removed an app developed by Facebook from its 'Developer Enterprise Program' (DEP) after it was being distributed to young consumers to harvest personal data in exchange for cash.

Facebook has also seen its enterprise certificate stripped as a result, with Apple accusing the social media company of breaching the terms of membership of its programme by marketing a 'Research' app to children as young as 13.

Apple's DEP allows developers to distribute beta versions of their applications to employees within their own organisations. As a result, these aren't as stringently checked and regulated as apps that appear in the public-facing App Store.

But according to a TechCrunch investigation published earlier this week, Facebook had used this channel to distribute its Research VPN (virtual private network) to consumers to absorb swathes of user data, often in exchange for cash.

The Research app also bore staggering similarities to the now-delisted Onavo Protect app, which was "voluntarily" removed this summer after Apple deemed its data collection practices to breach App Store privacy rules.

Billed to give users an additional layer of security, Onavo Protect collected swathes of personal information including users' online activity, and used these details for marketing purposes without their consent.

The two companies met face-to-face in California to discuss the app after reports emerged, and Facebook agreed to voluntarily remove Onavo Protect after Apple's demands.

Onavo Protect, repurposed

But this more lenient approach appears to have been ditched in favour of an outright ban, with Apple unimpressed that Facebook has been circumventing its guidelines with the Research app, reportedly since 2016.

The report alleged that Facebook had been paying users between 13 and 35 at least $20 per month to compromise their privacy and submit personal data, in some cases asking for screenshots of their Amazon order history page.

Facebook admitted to running the research programme, dubbed 'Project Atlas', to gather data on usage habits. Users were asked to visit 'r.facebook-program.com' and install an "Enterprise Developer Certificate and VPN" before consenting to trust Facebook with root access to their phone plus the data it transmits.

The data gathered, which also includes web browsing activity, would be used by Facebook to track its competition, judge social and behavioural trends and plan any future product releases.

Apple said in a statement to TechCrunch that it forcefully removed Facebook's app on Tuesday, following the initial investigation, despite Facebook earlier suggesting that it removed the app itself.

"We designed our Enterprise Developer Program solely for the internal distribution of apps within an organization," a spokesperson said.

"Facebook has been using their membership to distribute a data-collecting app to consumers, which is a clear breach of their agreement with Apple. Any developer using their enterprise certificates to distribute apps to consumers will have their certificates revoked, which is what we did in this case to protect our users and their data."

Because Facebook has been stripped of its certificates, a host of its internal iOS apps, used legitimately, have stopped working. This is a blow to the thousands of Facebook developers and engineers using the DEP to test new products internally.

Google quickly follows suit

While the iOS iteration has been removed, the Research VPN app, and wider research programme, is still functioning as normal on Android devices and remains available via the conventional public-facing Android store.

This comes in light of additional reports that Google had been running a near-identical research programme on iOS devices, in violation of Apple's rules, through its DEP.

This app, named Screenwise Meter, was distributed in the same way and urged users aged 18 and above, or 13 if part of a family group, to surrender their privacy in exchange for the opportunity to earn gift cards.

Google disabled the iOS version of its Screenwise Meter app following initial reports around Facebook's violations, admitting this was a "mistake", and apologising publicly, although it had been available since 2012.

"The Screenwise Meter iOS app should not have operated under Apple's developer enterprise program - this was a mistake, and we apologize," a Google spokesperson told IT Pro.

"We have disabled this app on iOS devices. This app is completely voluntary and always has been.

"We've been upfront with users about the way we use their data in this app, we have no access to encrypted data in apps and on devices, and users can opt out of the program at any time."

It is yet unclear whether Apple will inflict the same punishment on Google and strip the tech giant of its development certificates.

Facebook's pain and gain

Despite 2019 seeing Facebook engulfed by yet another privacy scandal, and several regulatory investigations, the social media giant reported record financial results for the fourth quarter of 2018.

Facebook earned record profits, and $16.91 billion in revenue in these last three months of the year, despite facing a handful of investigations under the General Data Protection Regulation (GDPR).

Moreover, ongoing investigations by parliamentarians across the world in light of the as-of-yet unresolved Cambridge Analytica and data-sharing scandals have appeared to have not at all dented its financial prospects.Facebook also estimated that around 2.7 billion people now use its 'family of services' including Instagram, WhatsApp and Messenger.

"Our community and business continue to grow," said Facebook's CEO Mark Zuckerberg.

"We've fundamentally changed how we run our company to focus on the biggest social issues, and we're investing more to build new and inspiring ways for people to connect."

IT Pro approached Apple and Facebook for comment but did not get a response at the time of publication.

SAP's licensing has struggled to keep up with how customers have used the vendor's technology in recent years.

Its per-user pricing model doesn't account for the world of IoT, in which devices, applications and bots, not human workers, access the German software maker's ERP systems, and do so much more often than staff would.

But customers had previously felt comfortable setting up such access, with SAP personnel aware of these connections without raising any issues, or any customers falling foul of licensing audits, according to the SAP User Group Executive Network (SUGEN), which represents customers.

However, after SAP sued high profile customers brewery Anheuser-Busch InBev and British firm Diageo, against whom it sought huge multi-million-dollar damages, for cases of indirect access, customers understandably grew worried.

Their cases typified indirect access use cases; Diageo enabled access to SAP's ERP system via third-party software, Salesforce. The accusations against Anheuser are less clear, but SAP alleged that it accessed its systems directly and indirectly without appropriate licenses. Anheuser settled out of court with SAP in March.

SAP moved to address customer fears over indirect licensing by introducing a new policy in April to cover third-party access to its ERP and S/4 HANA systems, as well as taking steps to ensure the threat of audits isn't used in sales negotiations.

The new pricing model for indirect access to SAP's ERP applications, and its S/4 HANA suite of ERP tools, aims to bring SAP's licensing into step with modern uses of technology essentially, machine-to-machine interactions replacing a lot of human access to ERP systems.

After introducing some new licensing models some months previously, as of April SAP detailed a new licensing policy to account for IoT use.

Instead of following its per-user pricing model, this one differentiates between human access via SAP software and device or bot access to core ERP systems.

This new model charges for access on a per-transaction level (SAP calls it a 'document'), where that transaction might be a POS transaction, an approved invoice or something else that requires accessing SAP's ERP.

So, what's changed?

SAP's per-user licensing model remains unchanged, and organisations can also use SAP's other two models, procure-to-pay and order-to-cash - both order-based pricing models choosing between them to best suit how they use SAP's applications.

This new per-document pricing model addresses the biggest fear among SAP's customers though; indirect access.

It will price access based on the number of transactions or 'documents' (an item like an invoice that needs to be run through the ERP system) accessing S/4 HANA or SAP's ERP suite.

You can decide whether your usage suits the document-based pricing model

Customers can choose which model suits their needs best, and can move to the document-based pricing model or remain on their existing model.

SAP has promised "conversion offerings" for those considering a switch. However, SUGEN warns that it's not clear whether users will save money under the new model.

SAP promises to separate software audits from sales negotiations

With customers scared that SAP will use the threat of software audits in sales negotiations in light of SAP's lawsuits against Anheuser and Diageo, the German tech firm has promised to ensure the two remain separate.

As SAP put it, somewhat mildly, audits coinciding with talks around new software purchases "can sometimes cause frustration" for customers.

It's promised to change this to ensure audits aren't co-opted as a nasty sales tactic, and will introduce self-service auditing features for customers to check how their usage measures up to their licensing agreements.

So, what questions should you still have about SAP's new licensing direction?

Will you save money under the document-based pricing model?

The biggest question is whether you'll actually save money by switching to the new licensing model. SUGEN believes it's too early to tell.

"It is difficult to know if existing customers will pay more under the new model, as the measurement and auditing tools required aren't currently available," SUGEN core leadership team member Philip Adams says.

"It won't be until Q1 2019 that customers will be able to assess any potential cost impact. However, we have urged SAP to publicly promise that customers would be able to adopt the new model without incurring further costs if the business value or scope of their usage has not changed."

Will the new per-document model be priced reasonably?

The lack of certainty above is in part because the catch-all nature of the term 'document' will mean different things for different industries it could be an invoice, a retail transaction, an oil production contract, or anything else: clearly some will be easier to process than others, or require fewer touchpoints with an ERP system.

"Generally I think it's a good move by SAP but there are many details that are still unclear," says Duncan Jones, principal analyst with Forrester. "For instance, will the price for the new per order be reasonable and will SAP sales teams discount it appropriately?

"My general advice is to prepare a solid negotiation strategy to embrace the change but get sufficient safeguards and compensation in return."

Will organisations using non-SAP software pay more to integrate these apps into their ERP platform?

This is something else that's too early to answer, and may play into your decision as to whether you want to change your pricing model at all.

"What is clear is that if you move to the new model, 'indirect' transactions from non-SAP systems to SAP systems would be counted and charged for in the new way," explains SUGEN's Adams, "hence customers with existing contracts need to look at and understand whether they are licensed for these types of transactions under their current contracts."

Diageo's court case came about because of its use of Salesforce, and SAP will be keen to encourage customers to use its newly-launched C/4 HANA suite of CRM apps over rival offerings.

Should you trust SAP?

This one's easy to answer wait and see.

SUGEN points out that SAP has known about situations where customers connect third-party systems to its ERP platform for at least six years, but only started punishing companies for doing so recently, leaving its customer base panicked and confused about what they could and could not do.

"Expecting customers to talk to and trust account managers in an environment where SAP has admitted to having lost customer trust is asking a lot," says chairman Gianmaria Perancin.

"If SAP publicly provided reassurances that customers won't be asked to pay more for use cases and implementations that were undertaken in good faith, this would go a long way to encourage customers to engage with SAP proactively."

However, Adams adds: "Without these reassurances, customers will find themselves in a state of paralysis, unable to move forward as they do not yet know what the new licensing model will mean for them. Over the coming months, we will be surveying customer organisations to see if their licensing positions are clearer, and what this means for their future plans and investments with SAP."

Image: Shutterstock

Big IT firms are hitting up councils and universities to squeeze more money out of their technology deployments, a report has claimed.

Companies including Microsoft and Oracle are performing software audits on public sector bodies, often deciding to charge them more for the tech they're using, according to research published by a software licensing costs expert.

Cerno's report, The Untrusted Partner: Software license reviews in the public sector discovered that a third of 412 councils it surveyed were subject to a software audit in the previous 20 months (the research took place between August and November 2014).

Of those, 59 per cent were found to be underlicensed, resulting in penalties of up to 50,000 23 per cent paid even more.

Redmond carried out 50 per cent of the 160 council audits, with Oracle performing 21 per cent of them.

Universities had a slightly easier time of it, but 35 of 123 had undergone audits in the previous 20 months, a quarter being found to be underlicensed.

Cerno warned that with public sector budgets already under pressure, these audits will come as a "depressing distraction" to customers.

"The challenge of a license review' from a major software vendor is therefore unwelcome and, as may be seen in this survey, often results in significant true up' demands," the report added.

"There is accordingly a heavy expectation to settle up and pay within a short period of time."

This could be as tight a deadline as four weeks, often less if a salesperson is offering a discount to wrap up their quarter, the report suggested.

The research claimed the software giants are gouging customers to make up for underwhelming quarters.

It referenced figures from Oracle suggesting the proportion of revenue generated by new license sales has dropped by seven per cent to a 21 per cent total over five years.

Meanwhile, revenue derived from software license updates and producyt support jumped by four per cent to reach 60 per cent over the same period.

The big shock for customers, however, is realising they're not best of friends with their suppliers, according to Cerno.

"The surprise to the customer is that the software vendor is not their trusted friend," the report said.

"In the eyes of the results-driven global software vendors, they are no longer (and maybe have never been) valued customers, but untrusted partners to be trusted only to supply additional revenue in a challenging market."

Campaign for Clear Licensing (CCL) founder and chair, Martin Thompson, accused tech giants of abusing their relationships with customers.

He told IT Pro: "This report highlights the trend in modern day software audits: A cash cow to prop up flagging software publishers.

"It is immoral to prey on underfunded local authorities and universities for quick cash to prop up sales targets. It should also be outlawed to sell a license program when the measurement of consumption has not been defined.

"Many audits manage to generate cash because the victim has no idea how their licensing is actually measured or managed."

The CCL is urging European legislators to give this kind of behaviour more scrutiny, citing Microsoft, IBM, SAP and Oracle as companies particularly at fault in its eyes.

However, Thompson added that customers must take their share of responsibility.

"Local councils and universities need to wake up to the significant management overhead of managing complex licensing," he said. "A framework agreement or campus agreement is not a shield of steel against audits, organsations need to invest in managing software as an asset or face the surprise of unbudgeted settlements."

Oracle declined to comment on the story, but a Microsoft spokesperson told IT Pro: "Microsoft does periodically conduct audits, as is fairly standard across the industry, however we have also made significant investments in training and consulting services to provide customers with customized, proactive SAM assistance.

"We continue long-term efforts to improve and simplify our licensing terms, based on valuable feedback from our customers and partners worldwide. We have also partnered with national standards bodies and industry leading groups to develop and adopt international standards which enable customers to not only manage their software licenses but also optimize their spend and improve overall IT security."