Current Affairs

Software Licensing Is A Scam

Big Tech increasingly takes on the role of landlord rather than retailer, spawning an industry of bullshit that begs the question—what is it all for?

When you buy a car, you drive off the lot and you own that car. You can use it for how it’s ostensibly intended (driving and convincing hotties to bang in the backseat); or, you can immediately set fire to it. While the police arrest you for starting a wildfire with your elaborate gender reveal car arson scheme, the car company is not chasing you down to deliver an audit with a bill of $50,000 for misuse of the vehicle per your User Agreement. It’s your car, you own the property wholly, and you can make a planter out of it if you want!

However, when you bought Windows ‘95, even before The Cloud was a gleam in Marc Benioff’s eye, you simply paid Microsoft for the right to license the software. Even after you paid the cashier at Circuit City, you did not own the operating system itself, and in fact you entered into a legally binding agreement indicating the very precise ways in which you would be allowed to use the software before you could actually use your computer. All those annoying End User License Agreements, or EULAs, that pop up when you install or update software—or sometimes when you start up iTunes and Apple has decided to modify their terms—are what dictate and communicate those precise ways in which you are allowed to use the software product you purchased. Desktop software EULAs typically use a lot of legalese to essentially say “you can use this on, like, a few devices, but you’ll be in big trouble if you bootleg this or do terrorism in the user forums.” As a regular Joe user of Twitter and player of Angry Birds, you probably have little to fear from these EULAs and should focus more on the privacy agreements and how big tech companies can use your data. 

For businesses, things become a lot trickier not only due to the volume of Windows ‘95 installations (no joke, a lot of companies still have these floating around) but the complexity of enterprise software agreements and the hell that is datacenter licensing. This has led to the creation of two whole new categories of bullshit jobs: auditors and Software Asset Managers. These people (It Happened To Me: I used to be a software asset manager) don’t really…do anything for society, but sort of…..read a bunch of contracts and argue about who owes who money. 

In brief, these jobs exist because of a key difference between end user and big corporate licensing agreements. Just like Panera Bread doesn’t buy all their printer paper by walking into a Staples, but rather through large sourcing agreements that are negotiated between Panera’s corporate office and Staples’ business development division, so too do large companies buy software in bulk wherever possible. This way is simpler to manage and offers the possibility of volume discounts as well as potentially more favorable terms of use. 

…every bit of it is bullshit.

However, in software licensing, it sometimes makes sense to purchase a “site license” rather than a bunch of individual licenses. A site license is usually a way to say “anyone at MegaCorp headquarters can use this software, don’t bother to count how many users or installations you have, for a very large fee.” This makes sense if our MegaCorp is, like many companies, a shitty place to work with high turnover, meaning that it’s hard to keep track of licenses for individual employees. However, site licenses open up a different can of worms: namely, they make you a target for a nightmare audit. The software company doesn’t just maintain ownership of their software: they get to control and regulate how it’s used, like a landlord that tracks every guest you have in your apartment, every drop of water you use, and every time you open the door. And if this landlord thinks you’ve done something, anything wrong, guess what: you’re getting fined.

As it stands, the majority of corporate software usage is on the honor system. When MegaCorp “trues up” with Microsoft annually, they provide a spreadsheet that says “we own 400 licenses of Visio and we are using 500 copies total, so we need to buy 100 additional licenses please and thank you.” If everything goes smoothly, that’s more or less the end of the story. But one year, Microsoft may decide that MegaCorp’s low purchase rate is suspicious—or simply randomly select the company for an audit where they will have to provide much more weighty evidence of how they arrived at those numbers (if it’s even possible). 

Particularly in the last decade, giant tech firms have started to realize how often companies are willfully or accidentally flouting the Terms and Conditions and have created teams of people to conduct audits. They may ask the company to simply self-report their usage, and fine them accordingly. Or they may ask to install a special tool that will sniff out usage across the company network; as you might imagine, this process can be months long. Since the results of these audits can lead to thousands or millions of dollars in fines for non-compliant usage, large corporations have begun to form small teams of Software Asset Managers whose job is to track all the software purchases and contracts, and try to ensure that usage is in compliance with those contracts. These teams also deal with the audits and attempt to lower the bill through careful cross-checking and crafty negotiation.

In this way, auditors and asset managers form codependent bullshit jobs—auditors trying to ensure a company isn’t getting any more out of rented products than it should, and asset managers trying to not get fined. Pretty normal for capitalism, honestly, but let’s proceed and see how it gets even worse.

The problem is so big, so costly that very large corporations can’t rely on Nancy and Sally in IT to manage their multi-million dollar software portfolios with excel spreadsheets: they need specific tools. These tools will have huge catalogs of information to automatically discover all purchases and every installation on corporate devices and do some black magic to tell a software asset manager if there are any issues, or even—praise the Lord!—a chance for optimization. Now that these Software License Management tools exist, Software Asset Managers start to buy them. An entire cottage industry of tools, training, certifications, reports, conferences, and consultants crops up.

And every bit of it is bullshit.

Sure, the tools work, in some cases, with a given amount of effort (usually a fuck-ton—surprise, they aren’t crystall balls). Sure, software companies make money in audits of unaware corporate customers, while prepared organizations can save money by expending a lot of time and energy on optimization and risk avoidance. 

But software companies have made licensing so complex that there are circumstances where even in an audit, they have no ability to verify whether usage is compliant. Imagine your landlord knocking on the door and asking you to prove that at no time in the last 12 months have you housed a clown. Apparently that was in your lease, but you didn’t think to keep surveillance footage or sworn testimony from your neighbors that at no time have they seen a clown on the premises. Now you could go to court to avoid the thousand dollar fine because this is patently ridiculous, but which of you has more resources to field the court costs—you or the landlord?

Just like you do not truly have an alternative to your landlord (besides perhaps moving to another building with a probably equally terrible lease and landlord, but you can’t afford the first+last+security deposit anyway), users and businesses often have few alternatives to the most egregious software license terms and audits. How many businesses, large or small, can operate without Microsoft, Google, Adobe, and social media today? These giants dictate the terms, no matter how complicated or absurd or frankly imaginary (if no one including your landlord can tell whether you had a clown roommate, then what is the point of adding it to the lease?) and we must simply shell out for our rented rooms and our rented software, and hope we don’t also have to shell out for real or imagined violations of these leases later on.

Even average end users are not safe! The shift to cloud computing has meant that more software not only lives on the internet rather than on your device, but also that software companies are getting creative in how they extract even more recurring revenue from you. Instead of buying Photoshop Elements 11 from the Best Buy bin for a steal and then using it forever, you must now pay a monthly or annual fee to Adobe to use Creative Cloud. Instead of buying Microsoft Office, you pay an O365 subscription—$69.99 every year just so you can update your resume once per annum (I’m not crying, you’re crying). Tech firms love this switch even though they get less revenue from your initial purchases, because it means that as long as you keep needing their software (which you likely always will), they get more money from you over your total life as a customer, since you must keep paying for access. (This system does provide some benefits to the customer, such as getting continued access to all the latest features, but you have no say on what those features are. If a new update sucks and you hate it, too bad! I would rather have the chance to vote on which licensing model Microsoft plans to adopt, and then also vote for which features I want them to spend my money developing.)

What about the open source software movement, you ask? Doesn’t that provide a free alternative to these troubling trends from Silicon Valley? Well, at Current Affairs we stan open source software creators, but I’m here to tell you that this isn’t a cure-all for anyone, much less for companies and organizations. Even the most dedicated creators simply do not have the resources of Microsoft and Google when it comes to creating an equally feature-rich or collaborative office suite. Non-technical users may struggle to use open source operating systems like Ubuntu, whereas Apple and Microsoft pour millions into research and design to create the “best” user interface possible. Truly free open-source products also share smaller user communities and no official support so troubleshooting problems becomes an insurmountable obstacle for all but the most dedicated or technical of users.

This is especially infuriating for anyone who has, say, tried to use Microsoft Word and waited three full minutes for the application to open, wondering how it’s possible for the world’s premiere word processor to only get shittier with each passing year, while you shell out just because all your clients expect you to send proprietary .DOC files—oh and in the meantime, Microsoft is actively trying to steal from and put open-source competitors out of business.

When it comes to software, it is simply impossible for alternatives to capitalism to succeed alongside capitalist counterparts which will always marshall more resources, stealing every good open source idea (or acquiring it outright) and incorporating it into their own software for profit. 

Ultimately, the problem is that we have all agreed to accept the premise that we can’t really own software, and rather than deciding to turn software into some sort of common good, we have all agreed that we must buy perpetual licenses and rent it forever. Even relatively large businesses are powerless against enormous software corporations that grudgingly rent out the technology which any organization needs to survive. The leases are ornery and against our favor, and the landlords are goliath developers who concentrate economic power daily. Microsoft alone has made 12 acquisitions worth over a billion dollars since 2000, and the 29 biggest tech mergers and acquisitions currently total more than 435 billion dollars. The IBMs, Oracles, and Microsofts of the world will gobble up every business left and then, starving for more—slaves to the Ferengi Rule of Acquisition 95 (“expand or die”)—they will turn on one another.

The more economic power they hold, and the more influence over our lives—our social media, our private data, our medical charts, the servers that run critical government and commercial services—the greater leverage they have to extract our freedoms. Be honest: you don’t read the EULAs. The only people who can take the time to do so are software asset managers, because they get paid to figure out this stupid bullshit. Software companies are so sure that you as an individual won’t read the EULAs that they can even bury absurd clauses like prizes in the fine print that only 1 in 3,000 will claim. Already, they use this to their advantage against organizations by building ever-more complex rules to snarl you into paying more out of fear, or messing up and owing. You, the civilian user, may have no greater breach of freedom than that which is already being perpetrated—the mining of your personal information to be sold for micro-targeted advertising—but too much of your life is now run by software to ignore the creeping influence of these tech landlords and their increasingly unfavorable leases. In fact, even your ability to pay your actual rent may hinge on the insanity of software licensing; the ripple effects of these cottage industries born of capitalist bullshit are vast and unknowable. I wonder if the person who swept the conference room floors after my presentation at a Chicago asset management event thought to themselves: “why do I bother sweeping up behind these people who are here for some bullshit they made up in response to some other bullshit some other company made up? My god, what is it all for?” 

If you make your living today by managing software assets, good for you, I hope you have benefits and are trying to unionize your workplace. But your job, as was mine, is pointless. I produced nothing. I improved no one’s life. I argued with Microsoft sales people on the phone; I apologized to large banks that their data was too ugly to discern anything from; I spoke convincingly about return on investment. What I did was participate in a market made necessary by companies seeking to make as much money as possible which provided nothing to the human experience. Many people work in such bullshit jobs today, proof that capitalism does not efficiently distribute resources among humans or innovate to improve life on Earth. Capitalism will, however, make software that counts how much other software you have so that you can tell an auditor if you’re in trouble or not based on hundreds of pages of rules about how you can use the software, so that one company or other ultimately saves or makes money, none of which you or the auditor will ever see, which is a shame because you now could use a bonus in order to pay for a year of Creative Cloud so that you can make the art that makes you happy, and also so you can pay your rent. And this happens, not because it has to happen, but because capitalism is renting us to death.

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