Three tips for ensuring license compliance and earning revenue

It’s not unusual for Canadian system integrators and channel partners to encounter situations of improper software lifecycle management within their customer base. Perhaps they see a customer who is simply unaware of licensing best practices and have pirated software in their environment. Or maybe a customer reveals that their rapidly growing business has simply lost track of the number of legitimate licenses required for compliance.

A recent piracy study conducted by The Strategic Counsel reveals that Canada has a high commercial market piracy rate of Windows at 21.1 per cent overall. In general, pirated software and improper software licensing can have a negative impact on all members of the partner ecosystem by reducing sales opportunities and increasing customer support costs due to the potential malware risks. Technology partners have everything to gain from encouraging compliance: According to research firm IDC, partners will gain $5.50 for every $1.00 that Microsoft Corp. (NASDAQ: MSFT) earns from reducing software piracy.

Ensuring that customers are using licensed software means that they can be confident that the operating system is free of malware and fully supported. With this in mind, effective license management can help to boost partner revenue and deliver a stronger customer service experience. Here are three essential tips to help better support customers and ensure more effective software license compliance:

Know your customers: The first step towards ensuring proper licensing and compliance is to open up the lines of communication to customers. According to The Strategic Counsel, 95 per cent of customers indicate they would be willing to correct piracy of Windows in their environment if presented with a solution. Whether it’s starting a new deal or renewing a customer agreement, developing a rigorous software compliance program with new and existing customers can help to ensure they reap the benefits of genuine software. For partners, helping customers better understand how software compliance works can help improve their profitability and ensure customer loyalty.

Develop a SAM strategy: To help customers reduce their potential for non-compliance, partners should look at providing Software Asset Management (SAM) strategies to customers as well. SAM is the development and implementation of a set of procedures and policies, enabling customers to track, manage and optimize software assets more effectively. SAM offers a great opportunity for partners to help organizations maximize their software investments, and can also provide significant cost savings to an organization’s bottom line. Offering a SAM consultation not only helps customers update their licensing programs, but this value-added service can also result in extra revenue.

Boost customer awareness: The key to reducing license misuse is to educate customers to view software as an asset, not an expense. Whether a deliberate cost savings effort, or a simple misunderstanding of licensing rights, educating organizations on license misuse can benefit both partners and customers alike. Research firm The Strategic Counsel also found that 77 per cent of customers agree they need more education about software licensing.

Enlightening customers through regular software compliance reviews – ensuring they fully understand the license agreement – offers strategic opportunities to teach customers how they can better manage their software assets. This includes educating customers on proper licensing practices, discussing the value of compliance and showing how minimizing license misuse can help cut downtime resulting from system failures and security breaches.

Looking at the Strategic Counsel numbers again – the 95 per cent of customers who would be willing to correct piracy of Windows in their environment if presented with a solution –indicates that promoting license compliance should be seen as a key customer relationship opportunity for the channel. When customers understand non-compliance risks – such as data loss, reduced productivity and profitability- they are generally willing to correct the issue, which is why partners should leverage this opportunity to educate customers and position themselves as trusted advisors.

To help partners help customers, Microsoft provides ongoing training via Web casts and other online resources such as Having an open and honest discussion about software piracy and compliance can not only help boost customer relationships, but also presents an excellent opportunity to drive revenue with value-added solutions.

Elliot Katz is the Windows client product manager for Microsoft Canada.

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