FAST has recently seen its first case involving an outsourcing company. It advises an outsourcer to conduct due diligence on any licenses it is set to control under its contract.
Existing issues – of which the customer itself may be unaware, such as unlicensed software inherited from a merger – can be identified before they cause problems.
The warning follows a recent report from analysts Meta Group suggesting that most companies are expected to outsource in the next three years.
Chris Butler of outsourcing specialists Liberata said:
"Outsourcing the problem does not mean outsourcing the liability. Vicarious liability does not transfer with the purchase of a service level agreement.
"It is essential that the organisation works with the outsourcing provider to ensure that complete audit records of software and hardware licensing and any shortfall are gathered during the due-diligence phase of any business take-on, that the outsourcing company provides that their own licensing is scrupulous and auditable and that strict controls are introduced to prevent unauthorised license-creep."
License-creep is the 'accidental' deployment of more licenses than are strictly procured.
Butler continued,
"Whether this is done by lock-down or other methods should be both transparent and irrelevant to the organisation who is after all, procuring peace of mind and a service level."
Lock-down is the prevention of modifications to the desktop environment by using software or other means.
Simon Briskman of law firm Olswang, a member of FAST's Legal Advisory Group, commented:
"Too few companies consider software issues before committing to an outsourcing contract. Current licences should be pulled out of bottom drawers and read – they may not allow outsourcing. New licences must clearly set out rights of use for both the service provider and customer. For example, license provider's whose pricing model is affected by the outsourcing could well want to look carefully at the proposals - and may even require additional fees before the service can go ahead."
Bill Jones of law firm Wragge & Co added:
"The inter-relationship between software licensing and outsourcing is generally poorly understood by users, and it can be very unwelcome when problems with existing licenses are discovered late in the negotiation of a new outsourcing relationship. The number of existing software licences requiring review can be substantial, and it is therefore essential that these issues are dealt with properly and in a timely way."