How to Prevent Vendor Audits?

Software license management is very important for small and large businesses. Not only does it help you track which software is valid, but it also protects you from vendor audits. And in this guide, we’ll give you some tips to help manage your software licenses properly.

Types of Software Licenses

There is a myriad of software licenses you can choose from. Here are the most common types:

  • Network:Includes LAN and WAN; alternatively known as a concurrent license, covers the machines that are within a specified network.
  • Freeware:License that’s free to use, but the creator owns the copyright to the product.
  • Font License:Refers to the usage of fonts. Some licenses have more types of use for others while some types are free.
  • Per device: The license is only used for a single machine.
  • Per user:The license is restricted to a certain user who has to log in or confirm their identity to verify the license.

Potential License Issues

Licensing is always a complex affair. So you’ll have to look out for common traps that can potentially harm your business.

  • Understand how your current software is licensed. For instance, Microsoft Office used to be licensed per device, now its licensed per user.
  • Also, when you use licensing per device, it might come with additional problems if you plan on using them in VMware environments because of dynamic load balancing.

How Can I Prevent Vendor Audits?

The best advice anyone that’s been previously audited can give you: Do an internal audit first. This is because vendors are relentless when it comes to software licensing and usage. They tend to have one goal in mind: To prevent illegal software usage.

When you buy your software, you have the rights to use it via a license agreement. However, you don’t own it. If you disregard the terms of usage, you could be placing your company at risk. On average, it can cost around $100,000 per noncompliant license. Software violation fines aren’t one to be taken lightly.

Once you’re under fire from one vendor, others are sure to come. And in the best scenario, you’ll have stressful audits in the next couple of months. So it’s best to discuss the importance of a regular audit with your management. And it isn’t a question about if you have to do the audit, but when. And your answer should always be “Immediately!”

Here are the best practices to help manage your licenses:

  • Deploy the latest OS updates and patch your systems regularly.
  • Make a software management policy
  • Make clear guidelines on who can install, and specify what, how, when, and where the software can be installed
  • Audit every software that employees use on their workstations
  • If you are over-licensed, give them to other employees or cancel them
  • Stay informed on how each application is used.


Mainly, software license management helps you avoid issues from vendors. So it’s important to always audit every application that your company uses. Ultimately, make sure that you manage your network so that it can continue to grow in the future.



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