3 Risks Of Poor Software Licensing Management


In an enterprise, it is easy to forget some essential things because employees are busy managing the daily workflow. Computers are part of the business system, and the IT department takes care of maintenance, so employees are only concerned about using them. They know the devices should have all the programs needed to perform their tasks. 

It only becomes apparent that certain things must be considered when a new employee needs a computer and installs required software programs. Purchasing a new computer and installing different software programs are easy. But what happens if your proprietary software license will no longer accommodate another installation because of issues with the license? 

Managing Software Licenses 

Once an enterprise has its computer network up and running, it is easy to forget software licenses. But software licenses are essential things to keep. You need it before you can install commercially distributed proprietary software. Also, you violate the copyright law if you use a computer program without a license, even if it’s software-as-a-service (SaaS). 

What Risks Do You Face If Your Software Licensing Management Is Poor? 

If your enterprise is bigger, it could be costly if you forget about your software licenses because there are legal complications if you exceed the limit, use an illegal copy of a program, or the license is not current. The same goes for non-compliance with the restrictions. 

Thus, a software license management system is critical. Here are 3 real reasons why you need it. 

1. There Would Be An Audit Anytime 

You may not realize it, but software developers can conduct a software audit randomly to protect their product and source of income. But often, someone initiates the audit. For example, a whistle blower or a disgruntled employee can tip off the software vendor. The Business Software Alliance in the U.S. offers a sizeable award when software violations are reported and verified. 

A violation of a software agreement can make the enterprise pay for the program’s cost and a penalty fee that could be three to ten times the cost of the application. In a survey, the fines ranged between $100,000 and $10 million. 

2. Software Is Expensive And Should Not Be Wasted 

If you do not manage your software licenses properly, you may be overspending by buying additional software or paying subscription fees. Without a software license management system, you cannot track the software usage, receive documentation, and control where and how software was used in the organization. 

A license management tool can help you with license agreement compliance. You will be notified about license expiry dates, under-usage, or over-usage of licenses. 

3. Underutilization Of Software 

You may have software licenses that you do not use. However, if you are paying for its license renewal, you are wasting your IT budget and lowering end-user productivity. 

A license management system will help identify the programs installed in every computer in your network and tell you the unused and unnecessary programs for your business process. 


Your enterprise must take control of your software licenses to prevent costly audits and spending more on new software and subscription fees. Further, you understand if your IT spending is justified. SaaS licenses should be taken very seriously and made a priority.


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