Licences and IT contracts
By Redaktion techport.ai, IT-Beratung · Last updated on
IT contracts are usually negotiated once and renewed annually thereafter. Over the years everything changes except the contract: the number of users, the nature of the usage, the vendor's price list and the importance of the system to the business. That becomes visible either through a substantial price increase or through a licence audit by the vendor.
Licence management is not a legal speciality. It is about knowing what you use, what you are allowed to pay for it, and what happens if you want to stop.
How you notice it
- A vendor enquiry about licence usage finds no solid figures.
- Contracts renew automatically because notice periods are not tracked.
- Price increases get accepted because switching is considered impossible.
- It is unclear whether usage through interfaces requires additional licences.
Why this happens
Licence models are complicated and they change, frequently in the vendor's favour. Counting methods differ per product: by named users, concurrent users, devices, processor cores or revenue. With virtualised environments and access through interfaces it becomes opaque. Anyone not reviewing regularly does not know themselves whether they are under or over licensed, and in both cases they pay too much: once through a back claim, once permanently.
How we go about it
- Record holdings and usage. We set the licence holdings from contracts and records against actual usage from the systems, per product and per counting method. The difference is what needs action, in both directions.
- Review contracts on the critical points. We review term, notice periods, price adjustment clauses, scope of use, availability commitments, the vendor's audit rights, release of data and cooperation in a transition. Those points decide later, not the discount at signature.
- Optimise and negotiate. We cancel unused accounts, redistribute licences, examine cheaper models for your usage pattern and prepare negotiations with solid figures. The best moment lies well before the end of the notice period.
- Track deadlines and evidence. We set up an overview with reminders and define which evidence is kept per product, so a vendor audit can be answered without a search operation.
What you gain
- Savings that require no process change.
- Preparation for licence audits instead of back claims.
- Contracts that permit a change and therefore create room to negotiate.
From our projects
Reconciling purchased accounts with actual usage is the fastest lever and produces a double digit percentage of unused accounts in almost every company. Considerably riskier, because it is rarely checked, is indirect usage: when one system retrieves data from a licensed system through an interface, some vendors require licences for that even though the person never opens the interface. That constellation arises almost incidentally in integration projects and is the most common cause of unexpected back claims. We therefore check it as part of every integration initiative.
Häufige Fragen
How do we prepare for a licence audit?
By holding the evidence before it is requested: purchase records, contract versions, a documented counting method per product and a current analysis of usage. Also settle internally who speaks with the vendor and which data is handed over. Audit rights are limited contractually, and you should know those limits before the audit starts.
What belongs in every IT contract?
Five points that count in a dispute: a service description that can be verified, regulated price adjustment with a cap, term and notice period without automatic multi-year renewal, release of your data in a usable format at the end of the contract, and the obligation to cooperate in a transition. Where personal data is processed, the processor agreement is added.
Let us talk about Licences and IT contracts
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Further reading
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