Software Contracts and Audits

It is common to see mainframe customers with software products that they have had for 20 or more years.  This is often a positive thing. The product might be a perfect fit for your needs, you may have an excellent relationship with the vendor that has been built up over the years, and the users of the product know it well enough to get the optimum value from it.

It is also not uncommon to find that the contract covering the use of the product has not been significantly reviewed since the product was first installed. However, over that time, technology has changed significantly. Was it possible to logically divide a mainframe into LPARs when the contract was written? Were there special purpose engines (zIIPs and zAAPs) back then? Or sub-capacity pricing based on rolling 4-Hour averages? How about more recent enhancements such as Mobile Workload Pricing or Country Multiplex Pricing?

All of these things can become potential issues in case of a software audit. If the contract refers to a ‘system’, does that mean a z/OS image or an entire processor? Is the contract completely unambiguous about the metric that is used to determine how many MIPS or MSUs were used? How can you prove which systems a product was or was not run in?

These are just a small sample of the issues that can arise. Cheryl Watson is famous in the mainframe arena not only for her knowledge and experience, but also for her integrity and fairness. We can perform an audit of your contracts and help you address exposures that could potentially cost you millions in charges and legal costs. Software audits are becoming more common and are viewed as a way to make a quick financial killing by some companies. Don’t leave yourself exposed – a small investment in a contract review now could pay for itself many times over when the auditors and lawyers come knocking on your door.