Case Studies

We Audited the Software License Audit – And Saved our Client Millions

Winthrop B. Reed, III and R. Taylor Matthews, III helped their client navigate an audit of its software usage, successfully resolving a demand for payment of more than $5,000,000, through a payment of approximately 7% of the amount sought. Win and Taylor achieved this result by aggressively challenging the methodology that the software company used to quantify our client's alleged excessive usage. Their work revealed that the software company used the wrong licensing documentation, applied the wrong criteria to measure usage, and incorrectly counted usage in our client's environment. Lewis Rice's Information Technology Practice Group finds that aggressively challenging a company's payment demands that were based on an audit greatly reduces the client's exposure.

Anticipating the Software License Audit

Our Information Technology Practice Group worked with their client to minimize potential future audit exposure and reduce license maintenance costs through a review of the applicable licensing metrics and the software deployment in the client's environment. By helping the client understand what it is using and how the usage is accounted for under the applicable licensing terms, the client was able to protect against audit exposure before it arose, reduce maintenance costs for licenses it was no longer using, and budget for additional spend necessary to maintain compliance for products in which it will continue to experience growth. In our experience, if a client is able to gain an understanding of its software usage, it can not only minimize audit exposure, but reduce its overall IT spend.

Building Up from the Ground to the Cloud

In early 2012, Billee Elliott McAuliffe was asked to consult with a new client of the Firm. The client, a newly formed publicly traded company, had been recently spun off from another publicly traded company and had no real information technology infrastructure of which to speak. As it was not burdened by legacy environments or infrastructure, the client could forge a new and innovative IT path forward for itself and its businesses. Over the next two and half years, Billee worked with the client's IT team and negotiated 200+ agreements resulting in a multibillion-dollar company being operated almost entirely "in the cloud."

Buying Part of the Data

Buying a division or portion of an existing company has many difficulties. One such difficulty arises when the purchased data, software, and IT infrastructure is co-mingled with the remainder of the company's businesses and some or all of that data, software, and infrastructure is hosted and/or managed by a third party service provider. In a recent transaction, Billee Elliott McAuliffe had to negotiate with not only the seller but also its third party service provider to ensure adequate transition of and protections for the data of the business being purchased. The seller's third party service provider originally was reluctant to assist in the transition because of fears of being caught in the middle of a fight between the parties, one of which was not its client. Understanding the service provider's issues, Billee suggested, and the parties negotiated, a three-party agreement whereby each party's concerns could be addressed and a concerted plan enacted. In the end, the third party service provider was a great asset to both companies. It extracted only the data that was purchased without compromising the remainder, and the buyer decided to use the third party service provider for data hosting on a go-forward basis. A win-win for everyone.