Aug 17, 2017 - 06:10 AM
Veritas is a good example where inspite of having license maintenance records vendor doesn't acknowledge end of life/support products as valid entitlements.
Aug 17, 2017 - 06:14 AM
Aug 17, 2017 - 06:24 AM
Depending on how long you have paid maintenance and the relationship you have with the vendor, you can negotiate and have them send you an official notification that the maintenance wil be accepted as your entitlement. I have noticed with many companies that have gone through renames, purchases, transfers, that this becomes a discussion between you and the vendor to decide to "draw a line in the sand" as a base of entitlement from a a certain date and anything before this date would be included as part of your entitlement certificates. The bad news is, usually these types of scenarios occur after an audit.
Aug 17, 2017 - 06:52 AM
Under the law, vendors are not allowed to charge you for maintenance on a product that you have not originally received a base licence. that base licence may have been received through a purchase or by a "free" grant as part of a larger deal. Support and maintenance is an acceptable proof of entitlement in the circumstances you mention.
One thing you need to consider about entitlement is when one vendor is acquired by another. For example, if IBM acquire a software product from another vendor then IBM do not issue you an entitlement (their "D" part number) to the base licence but will issue you an S&S ("E") part number if you pay maintenance. This is fine until you no longer pay S&S when your PPAdv record show you have zero base licences and zero S&S licence - all very confusing.
Aug 20, 2017 - 03:56 PM
Maintenance agreements also can have certain limitations, updates only, not upgrades, etc. The use case you are employing VS. The use cases covered under a legacy maintenance agreement may not be aligned. Yes a maintenance agreement shows that there was some sort of license in place but normally a maintenance agreement is separate from the actual license. Bottom line if you don’t have the license agreement then you better hope you are dealing with a friendly supplier who will work with you. Also note the comments re acquisitions. Maintenance does not transfer in most cases so it’s best to be aware of what is happening to your supplier and put acquisition language in your contract.
Aug 21, 2017 - 03:20 AM
It is important to understand the core elements of the Software License business:
- License: This is a contract giving you usage rights to something that you do not own. It is governed by copyright law. In and of itself it does not prescribe any financial responsibility. It merely addresses what you can and cannot do (limitations) and what you must do (obligations) with the 'work' (in this case software) that you want to use.
- Entitlement: Defines what 'works' (in this case software) you have access to and how the license(s) apply. An entitlement mabe tied to a financial obligation and have a term associated with it, it may also be limited to a geography or specific business application. In most cases an End User entitlement is managed using an authentication mechanism that can include an license key, a subscription fee, an activation process. Most entitlements are auditable and it is your entitlement that most publishers audit supported by the license rights.
- Maintenance/Support: This is a service and in general has nothing to do with your license rights or entitlements. It is an added service that ensures that the 'works' (in this case the software) you are entitled to use are up to date and free of bugs and other defects that might impact your specific use. Defects that you encounter may be general and impact all licensees or they could be specific to your particular use case.
NOTE: Unless you have a specific subscription model in place that incorporates licensing, entitlement and maintenance then having any one without the other doesn't really prove anythng.
It is completely possible to have a license agreement in place that is supported by a 3 year entitlement and an annual renewable maintenance agreement. The maintenance agreement can be renewed and paid for independently of the entitlements for the license. After three years it is possible for you to keep on paying maintenance without having valid entitlements and therefore not having a valid license to use the software (I have had to deal with this scenario in the past) .
Normally the fees paid to a software publisher for an entitlement (colloquially called a license - but it isn't) are seperate from any maintenance fees. In fact in an OEM license model the maintenance fee is usually a fraction (15%-20%) of the actual entitlement fee. In most End User situations these can be blended in a subscription.
If you have a perpetual license then the maintenance/support typically only covers the version/edition of the license you have a perpetual right to. You would also need to pay for upgrades (e.g. Windows 7 to Windows 10 is an upgrade) to extend you perpetual license to new software versions/editions.
I would suggest that any maintenance renewal be aligned with a license and entitlement review (at least internally) to make sure that: a. You are getting value for money not just from your entitlements but also your maintenance, b: your entitlements are current and you don't end up paying for maintenance on something you don't have rights for. :-)
Unless you have a maintenance agreement that covers entitlement renewal in addition to normal break-fix and update services (i.e. the subscription model I mentioned above) then it should NEVER be assumed that maintenance guarentees any valid entitlement especially if the original entitlement agreement was limited by a term clause.
Lastly, since maintenance is a Service then it is feasible that if your supplier, or especially thier technology without people, is acquired then the maintenance could terminate upon acquisition or at the agreement's next renewal. The acquirer of your supplier doesn't have obligations to continue delivering maintenance in the same way or with the same SLAs. Additionally make sure that the contract assignment aspects are valid and that you get a say in this. Caveat emptor!
Hope you find this helpful.
Aug 21, 2017 - 06:56 PM
Aug 21, 2017 - 11:29 PM
The licence for any piece of software contains usage rights however, these can be negotiated in your own agreements with the vendors at the time of purchase. It is therefore important to keep the original agreements in a safe place and format.
That said, at the point that a vendor provides a new version of the software they can (and often do) change the licensing applied to that software. This only impacts the customer at the time that they move to that version of the software. The changes are not applied retrospectively. It is therefore important that you not only keep the agreement between yourself and the vendor but also a copy of the licensing instructions provided by the vendor for the version of the software that you are entitled to use. The same applies when a vendor moves a software product to a different product either by renaming or consolidation of products (or their functionality).
As maintenance (especially on a perpetual licence) allows you to upgrade to later versions/releases of the product you also need to consider keeping copies of the licensing instructions provided by the vendor for any later versions of the software that they have released and you have not yet implemented. You are entitled to use these later versions even if you stop paying maintenance – your right is up to the version currently released at the time that you stop paying maintenance.
It is therefore important that the customer keeps good records. You would expect the vendor to have to do the same but they place the responsibility on the customer so if you cannot prove you have the right they have the opportunity to resell the software to you.
Aug 22, 2017 - 11:55 AM
1) If I understand the scenario correctly, the publisher wants to have its cake and eat it too...when accepting maintenance payments the vendor happily accepted that licenses existed (by default), but now wants proof?
2) It may not be a true legal position but it may be the basis of a negotiation - if the existence of licenses was accepted in the past they should be accepted currently (grandfathered). If they believe the entitlements do not exist, then perhaps there is a case for a refund of the maintenance (overpayment on licenses that never existed), or at least a credit towards future licenses.
I know some clients have "danced around" this scenario before and came to some kind of compromise (around future credits, I think) - but it depends on the publisher, the relationship with the account team, the value of your contract (my client had a very large contract) and the willingness of your contracts/legal team to dig in if necessary
Aug 22, 2017 - 04:02 PM