What is the true price of BYOD?

Posted on : 29-10-2013 | By : jo.rose | In : Innovation

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“Nature is a mutable cloud which is always and never the same.”  Ralph Waldo Emerson

Our failure to enter into good commercial agreements in the past has hampered our chances of attaining the full value offered by new systems and technologies. The mutable clouds that stream towards us at increasing speeds offer greater potential; yet the commercial challenges are always the same. What are some of these commercial challenges posed by newer technologies? What can you do about them?

Let us consider an example: the trend for CIOs to adopt a Bring Your Own Device [BYOD] policy. Once the concerns about security, data privacy and access have been addressed, a BYOD policy is very attractive to both the user community and the CIO. However, a BYOD policy also starts the timer ticking on a cluster of time bombs: what software suppliers will do about business use of personal software.

Managing software audits properly has always been a difficult task. Many organisations over-deployed software within their environments or allowed software to be used in ways that were not covered by licences or enterprise agreements. How much more difficult does this become where business work is delivered using personal devices? How can the organisation track and report the use of personal devices? Will there be a single personal device used per employee or is business looking at individual instances for desktop, laptop and mobile devices?

One possible approach is for the business to tell the software supplier to pursue staff directly for inappropriately using their home edition software. Staff attitude surveys towards IT might well dip after such an event and the liability will likely return to the business corporation because that is where the benefit lies.

A second solution would be to let the issue drift until the software provider initiates an audit and then cut a deal. Most organisations took this approach to past software compliance liabilities. Given the difficulty of proving the right usage statistics from a BYOD policy, there needs to be plenty of space for a bigger number in the ‘Amount’ box of the settlement cheque.

The best approach is to review software agreements pro-actively. Pay particular attention to applications and data. You may be lucky and find that some of your agreements are based on headcount. Never, ever surrender a headcount clause. Where you do not have a headcount agreement with a software supplier then you can try asking for one, although a new headcount agreement is now likely to be prohibitively expensive with an incumbent supplier.

Assuming you do not have headcount clauses, when you review your software agreements the thought process should be something like this….

  • Can the supplier demonstrate that employees have used personal software to deliver business needs?
  • If the supplier can demonstrate this, we may have a liability.
  • Can we provide accurate statistics for how many instances/devices/employees are involved?
  • If we cannot provide accurate inventory then the liability might end up being a multiple of the number of employees, contractors, consultants and suppliers that work on our behalf.
  • We should be able to reduce the liability if we formulate a commercial stratagem that the supplier will accept.

So is this just scare mongering? US President Obama set up the Office of the Intellectual Property Enforcement Coordinator [IPEC] in 2010 and has significantly expanded enforcement powers in the US. Through negotiations with the European Union, G8 members and G20 members, the US continues to extend its Copyright and Intellectual Property models to the UK and other developed countries as part of a campaign to ‘Fight Worldwide Counterfeiting’, IP Theft and Copyright Infringement. Software suppliers coordinated their common interests through a trade body called the Business Software Alliance [BSA], founded in 1988. Since 2008, software suppliers have seen major reductions in their income because businesses cut back spend on new development projects. Suppliers replaced their lost development income with penalties for non-compliance gathered through more widespread software audits. Most of these are gathered in out of court settlements that are not widely reported.

There is some good news. The BSA and software suppliers focus much of their energy on countries where they see high levels of piracy and the UK is not one of those. The suppliers themselves are also generally amenable to working with businesses to find solutions where software costs remain reasonable. Once you have spotted a problem, work with your commercial or legal teams to formulate a stratagem and bring this in good faith to the supplier.

Do not take too long. Pressures on software firms’ revenues increase as their old products lose market share to new platforms like Android, new applications like Prezi and new productivity tools. The commercial solutions remain the same but the new clouds roll in faster.


Many thanks to Sean Pepper for contributing to this article – Sean is an interim manager and consultant with experience of leading Vendor Management and Procurement activities at major banks.

For any questions or more information, please contact: jo.rose@broadgateconsultants.com