8 Points About Microsoft Compliance Most Small Businesses Learn Too Late

There’s a new sheriff in PC town. The software-slinging technology giant has four colorful squares on his badge emblazoned with one word: Microsoft. Be prepared. He’s calling in his chits.

Microsoft, as everyone on planet Earth knows, has equipped generations of computer users with the means to write, calculate, present, email, connect and share. Now the company is reconciling software licenses in an effort to aggressively reduce abuse. Through “licensing audits,” the company tallies up users and licenses for products like Windows, Office and Windows Server.

Small business owners not in compliance face true-up costs – money spent on updating computer licensing. Think of it like being snowed in with your cupboard bare. You open the cabinet door with your fingers crossed, hoping for that extra can of beans. Instead, you find sauerkraut. Similarly, small businesses late to the true-up bugle call must suddenly invest a chunk of change (unplanned, never good) to reconcile their licensing. The more out of compliance you are, the higher the costs. For one company, that meant a six-figure surprise.

That’s right. According to an article in Business Insider, a small Microsoft reseller in Nebraska suddenly owed the Redmond, Wash.-based company $100,000 – a devastating amount for a small business. The attorney for the company called Microsoft the “third most aggressive” regarding compliance, just behind Oracle and IBM. At 3Points, we’re seeing this same pattern.

Read on for the eight points every small business should know about Microsoft compliance.

1.  Compliance for small businesses up to 100 computers is particularly important because companies in this category grow like weeds. Growth is good. It’s easy to forget, though, how fast it happens. For instance, an organization adopting Microsoft Office across the enterprise might purchase 20 Client Access Licenses, or CALs, for 20 employees. As that company adds new users, additional licenses should be purchased. Most people, however, don’t. So three to five years down the line, the company finds they are 10 or more CALs behind. The true-up cost would be right around $2,000.

2.  Audits are time-consuming and complex. Cards on the table, this point is one big reason people engage 3Points. We know what to look for and where to find it. You have better things to do than spending hours upturning computers searching for a serial number. A study by Express Metrix (in late 2013) revealed the top three challenges for software compliancy are:

#1 License agreements are difficult to understand.
#2 The complexity of the IT environment.
#3 Difficulty reconciling what is installed with what is used.

3. An OEM license is different than an open license. By far, this is the most confusing point. An OEM license applies to one specific piece of equipment. Even if an OEM license key is printed on the side of a piece of hardware, it cannot be used on another machine.

In contrast, an open license can be used on any piece of equipment. Say you buy a new PC and it has MS Office preinstalled. Then, a couple years later, you need to buy a new machine. Most people would want to move the old key for Office to the new machine. Unless it’s an open license, that’s a violation. At 3Points, we prefer the flexibility of open licenses.

4.  Volume licensing has limits. You can always buy licenses using Volume License Key. It might look like this: 50 versions of MS Office for a multi-activation key. Once you reach that limit the license is no longer usable. Every time you activate the key, it decreases by one.

5.  You might have counterfeit software – and not know it. We’ve been on new business audits and seen stolen licenses on servers and the client had no idea. Here’s a trick: If you can Google the license or pop in the first 10 to 15 numbers of an SQL license, that installed license is most likely not legit.

6.  Keeping a record of your licenses could save you money. At 3Points, we’ve successfully saved clients money (into the thousands of dollars) when we offer up proof that certain licensing exists – especially on server licensing. Every time we buy a license, we open up a Microsoft agreement that lists the number of CALS for that client.

Here’s a quick hit list of licenses to inventory:

•    MS Windows Licensing
•    Windows Server Licensing
•    Remote Desktop Licensing
•    SQL Licensing
•    CALs (client access licenses)

7.  No receipt? Punt. Certain manufacturers like Dell can help you prove your purchases as long as you have the service tag with the serial number. Look this number up to find the preinstalled software the device was shipped with (Adobe, Office, etc.). We also may be able to reach out to hardware vendors and check the original shipping configuration. If we come up empty and you can’t prove it with a receipt, then you have to rebuy the license.

8.  Why compliance matters (like big-time matters). PCs running genuine software are faster, more secure and are more reliable than those running counterfeit software. Entering the Microsoft audit program is voluntary and free. Doing it now could save you down the road and give you peace of mind.