We know that much of the widespread fear, uncertainty and doubt over cloud security is unfounded; last year the Cloud Industry Forum’s (CIF) report, The Normalisation of Cloud in a Hybrid IT Market, found that only 2 per cent of decision makers surveyed claimed to have experienced a cloud security breach (this is despite 61 per cent saying that security is the number one concern).
However, there is a much bigger and very real underlying threat to the ‘control’ the IT department reserves both over procurement, and exactly what is on their IT estates – as well as what is actually being used. Managers staying up all night over a potential security breach in their cloud-based email system may need to look a little closer to home.
Gartner recently stated that global investment in enterprise software would reach $344 billion in 2015, an increase of just over 7 per cent on 2014. CIF has also said that more companies in the UK now use cloud computing that ever before, with more than three quarters (78 per cent) embracing the technology for at least one application within their business. The complexity of an increasingly popular hybrid approach exponentially decreases visibility of exactly what is on your IT estate across an organisation, and of course what you are legitimately licensed to use, or not. This issue is further exacerbated by the ease at which line-of-business managers and employees can introduce new software and subscription services onto the network thanks to an “app culture” and mobile working. The myriad of business apps available makes it easy to bypass both the IT procurements and IT governance processes.
But it isn’t just the lack of control over spend affecting profitability, there is the hidden cost of ignorance thanks to non-compliance. The crux is that the mega vendors are acting in an improved economy, and there is renewed impetus for software vendor audits. The rush to spend can lead to financial wreckage if you are not adequately equipped to deal with an audit situation. It’s a fairly basic revenue generating exercise for vendors, since business software users will – and are – facing tough questions, and potentially tens of thousands of pounds in back support.
All of the major vendors have incredibly well funded and stringently managed auditing teams, basing audit requests on risk factors, in fact, approximately 94 per cent of vendors have audit clauses in every software contract with end users. Audit requests can be quite alarming without preparation, especially as they can approach middle management as opposed to IT. But there are some measures that organisations can take to ensure that they are not only prepared, but better understand the audit process:
£ At contract stage, query the audit clause;
understand your contractual obligations
and the information you should – and
should not – provide
£ Consider your current usage of a vendor
before audit; understand risks before
the vendor does, and identify your current
Effective License Position (ELP). This is
the very basic level of audit defence
because it is your proof point, squaring
up usage against what’s paid for. Consider
bringing in experts if you do not have the
software risk and compliance expertise
in-house
£ Ask who is initiating the audit, and
check the audit provisions in your license
agreement. If it is not the vendor itself, or if
the audit clause does not provide for
a third party, then question this. You may
also have the option of negotiating with
the auditor in this instance
£ Check carefully whether it is an audit,
review, verification or other request being
made. These are similar, but can be subtly
different; a formal audit is not necessarily
the same as a review
£ Be aware of hidden agendas; the vendor
is likely to use audits to identify revenue
generating opportunities.
