A Microsoft software audit is a compliance review of a business’s use of Microsoft products and services. This review is part of the Microsoft License and Contract Compliance program. It is a formal audit.
As a business owner or IT manager, you may receive a Microsoft audit request at any time. These audits are mandatory in terms of the Microsoft End User License Agreement that you accept when installing Microsoft software.
Microsoft software audits are carried out periodically in specific industries and regions. To ensure you have a successful Microsoft audit, you have to manage your software licenses. In this article, we will be taking an in-depth look at Microsoft audits, what they entail, the repercussions of non-compliance, and how you can prepare for a Microsoft Audit.
How is a Microsoft Audit Carried Out?
Any client with a Microsoft volume license can be selected to undergo an audit. To select a customer for a review, Microsoft follows a programmatic approach. If you are chosen for a Microsoft license compliance verification, you will receive a direct formal notification with a time and date.
The duration of the audit depends on the organization’s IT situation and the complexity of the infrastructure, but customers can rest assured that Microsoft will go to great lengths to ensure minimal disruption to the customer’s daily business activities.
The objective of these industry-standard compliance reviews is to help their customers achieve and maintain license compliance and to ensure that their intellectual property rights are protected.
The review is conducted by a third-party auditor from certified, internationally recognized, and independent public accounting firms. In some cases, independent consultants may perform the audit on behalf of Microsoft.
If Microsoft suspects that you may be using unlicensed software, they will send you a series of letters to the effect that you have to remedy the situation. If you fail to comply, you may face legal action from the Business Software Alliance (BSA)
Consequences of Non-compliance
Abusing license compliance can put your business at risk, and you can receive a hefty fine. Implement a sound license management strategy to ensure that your business is always compliant. In addition to using software that is properly licensed, you should also be able to show the audit trail.
Larger companies typically have policies in place to ensure that their software licensing is in order. As a result, Microsoft is increasingly reviewing smaller companies to ensure that they maintain license compliance.
How to Prepare for a Microsoft License Compliance Verification
The best way to prepare for a Microsoft software audit is to ensure continuous compliance by having an internal Software Asset Management (SAM) program in place. SAM is a set of practices and policies that integrate processes and technology to streamline the use of software across the entire organization.
SAM is an IT advisory service and an entirely voluntary process that a company undergoes to:
- Gain data insights
- Optimize their licensing
- Minimize security risks
- Improve productivity with the IT investments
The Difference Between a Microsoft Audit and Software Asset Management
Some people claim that a Microsoft License Compliance Verification and Software Asset Management is the same. However, this claim is not the case.
Microsoft License Compliance Verification
- A mandatory and formal requirement in terms of the Microsoft End User License Agreement
- The verification is a review conducted by internationally recognized public accounting firms or authorized consultants, depending on the jurisdiction
- The objective of a Microsoft audit is to help clients maintain license compliance and to protect Microsoft’s intellectual property rights
Software Asset Management
- Voluntary engagement to ensure that the company is software licensing compliant
- Carried out by Microsoft Certified SAM partners
- The objective is to help clients derive more value from their software investments
Different Types of Microsoft Audits
This is the least abrasive type of audit that you can be subjected to undergo. This audit requires that you verify your compliance with Microsoft’s licenses by sending them the software keys for each license or purchase product.
Microsoft will then compare the keys to their purchasing records to determine the validity of your software. The costs associated with self-audits are relatively low. If your business is not entirely compliant, taking steps to rectify your license position will cost considerably less than dealing with non-compliances that Microsoft found on its own accord.
License Contracts and Compliance (LCC) Audit
LCC audits are the most cost-intensive type and typically is Microsoft’s last resort when a company doesn’t respond to requests for self-audits or SAM engagement audits.
LCC audits are legal and mandatory. Delaying a notification of a License Contracts and Compliance Audit can result in Microsoft taking legal action against you or your business.
Unlike SAM audits, LCC audits are not voluntary. Microsoft will attempt to leverage your software licensing situation for financial compensation in the form of fines or penalties. In severe cases, you may even face criminal prosecution.
While SAM audits are not mandatory, implementing them can ensure compliance from the get-go. These audits also ensure that, when the time comes, Microsoft will be satisfied with your licensing position and you won’t have to sit through a License and Compliance Audit.
Software Licensing is Crucial
As a business owner or IT manager, licensing software management is critical to ensure that:
- You are using your Microsoft software legally
- You are not paying for software that your business is not using
- You do not have to pay hefty fines
Purchasing too many software licenses can waste company resources and increase your susceptibility to potential and costly lawsuits.
With a sound software license management policy in place, however, your business will be able to undergo self-audits and any other type of audit from Microsoft without having to go through extensive preparation.
Microsoft products should be licensed. Prioritize license compliance and ensure that you are always prepared for a Microsoft license compliance verification to steer clear from fines, penalties, and legal action.