Recently, we have assisted a few of our customers with the Microsoft auditing process. Microsoft conducts these audits to ensure that every copy of installed Microsoft software is actually licensed. In conversations with our vendors, and from our own experiences, we have seen an increase with their audits on small/mid-sized businesses.

What are Microsoft Licensing Audits?

There are 2 types of audits from Microsoft. The first is known as the Software Asset Management (SAM) audit. This audit relies on your voluntary participation. During a SAM engagement, a Microsoft consulting partner examines your Microsoft software resources for any type of misuse.

The second is the Legal Contract and Compliance (LLC)audit. An LCC audit, which is involuntary, is only administered when Microsoft believes that a serious licensing infraction has taken place or a company has consistently refused to undergo a SAM engagement. This type of audit is costly and time consuming.

What to expect?

Microsoft will confirm that every piece of equipment running a Microsoft product is appropriately licensed and paid for. However, even if a company possesses all the appropriate licenses, if they cannot show the audit trail, Microsoft can still impose fines.

What are the consequences of being non-compliant?

You will be penalized if Microsoft determines you are out of compliance. In most cases, you will be expected to pay for additional licenses, possibly at full retail cost. You may also encounter fines, penalties and even criminal prosecution for the most serious cases.

How can you get ready for an audit?

Preparing for an audit is all about the preparation.

• Have all of your licensing orders ready in an electronic format.
• Keep all orders from software vendor and all receipts.
• Have a licensing portal with Microsoft and keep all open licensing updated and tracked.
• If you have box copies, keep the boxes.  If you purchased a digital download copy, you will get a copy of the Certificate of Authorization (COA) via email or on paper.  You must keep these.
• The best thing to do is purchase everything from one licensed vendor to minimize your audit trail.  Buying Microsoft from an unlicensed vendor means that Microsoft will not recognize the license as valid, and you will be considered non-compliant.