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What does an end to Adobe auditing and license compliance activity really mean?

by Stephen White  |  August 3, 2016  |  1 Comment

There may be several answers to this question, however between the question and potential answers lies a series of feasible explanations:

A. License revenue growth resulting from SaaS and subscription licensing leads to Adobe halting audit practices
B. Audit and license compliance activities are at odds with today’s vendor and client relationships
C. SAM, good governance and counterfeit awareness cause audit practices to be unnecessary

If you were to choose one of the above explanations which would it be?

What Do We Know about Adobe’s changes?

Adobe confirmed that the company is eliminating its traditional Audit/License Compliance programs. These programs were closed in the North America, Japan and Latin America markets as of November 2015. Closure of the EMEA program is currently underway; the company states it will maintain audit/compliance programming only in select markets throughout APAC.

Until recently, Adobe was also one of the top 5 most active auditing software publishers according to Gartner client surveys. However, the elimination of Adobe’s audit and license compliance program is not terribly surprising, considering the company’s aggressive conversion to SaaS subscriptions, and implementation of monitoring services including the Adobe Genuine Software Integrity Service.

Audit trends

Though Adobe’s cloud strategy does address a significant degree of counterfeit and compliance risks, clients still must confront specific compliance risks. Most notably, Adobe’s General Terms retain the right to verify compliance, with clients required to provide installation and deployment data within 30 days of request, thus inadvertent or deliberate mis-use of Adobe software may still be subject to a verification activity.

Where considering or utilizing Adobe’s SaaS and license key model, IT leaders must recognize that the software includes mechanisms which monitor license allocation and deployment, thus enabling invoicing and true-up practices traditionally driven by client declaration.

Future of SAM Inexorably Shifts from Compliance to Cost Management

Adobe’s SaaS strategy may have reduced compliance management requirements. However, the ongoing nature of subscriptions, and absence of an ‘off switch’ in case or cost reduction initiatives or requirements make usage monitoring and right-sizing the critical focus of SAM. In order to accurately establish options for reducing costs each organization will require mature SAM processes and tools, or third party delivery of SAM services to minimize expenditure and extract maximum value.

IT leaders will likely welcome a reduction in audit activity. However, they should also recognize that risks of utilizing SaaS subscriptions include reduction of negotiation leverage, thus leading to increasing prices at renewal. They should also expect an increase in list prices for a number of Adobe’s applications at renewal (Gartner clients should review Understand the Impacts of Adobe’s Cloud Strategy and Subscriptions Before Negotiating an ETLA).

Consider also that Adobe’s decision could have an impact on the market and represent part of a broader trend and direction, one that potentially leads other software publishers to both accelerate their conversion to SaaS and choose to reduce their audit activity. Earlier in 2016 Microsoft chose to call time on its SAM competency, a move which links to Microsoft’s cloud services strategy and consequently increasing use of SaaS and named user license allocation models, so has some similarities to Adobe’s approach.

One might conclude that the decision by Adobe is a clear signal that clients must shift their SAM program focus to measuring and managing consumption of ‘as a Service’ offerings. Without effective metering of usage, and license allocation how will end user organizations manage out excessive costs?

Returning to my introductory question, what’s your view of why Adobe revised its audit and compliance policy? What does it really mean for users of Adobe software?

Category: asset-management  cloud  it-cost-optimization  licensing  

Tags: cloud-contract  cost-optimization  etla  licensing  saas  software  software-asset-management  

Stephen White
Research Director
2 years at Gartner
14 years IT Industry

Stephen White is a Research Director in Gartner's IT Asset Management, Vendor Management and Procurement team, focusing on strategic licensing and negotiation strategies, asset management, and reseller engagement. Mr. White leverages his experience in software sales and consulting to assist IT leaders through his coverage of best practices in license life cycle strategy and trends, license metric and pricing practices, contract negotiations, optimizing terms and conditions, sourcing, and relationship management. Read Full Bio


Thoughts on What does an end to Adobe auditing and license compliance activity really mean?


  1. Al Cipollone says:

    Just a thought but I would like to think the enhanced SAM practices and governance played a part in the decision. However their push to SAAS and the controls and reporting they can get from the authenticating would provide them much greater insight into the use of their applications. They would much more easily be able to identify compliance issues with a lot less effort. The recurring revenue from the SAAS offering could potentially exceed any revenue and ill will they get from a formal audit.



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