Software licensing is becoming a minefield for IT leaders – and it’s driving them into the arms of the open source community

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.”

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