Software compliance management is a critical component of software asset management. It involves determining if software is being legally acquired, configured, and utilized according to license terms. Non-compliance can occur intentionally or unintentionally due to factors like internet piracy, soft lifting, complex metrics, and ineffective policies. A survey found that many IT professionals believe they are unprepared for a software audit and at risk of non-compliance. The W Group offers software compliance management services to help organizations understand their software environment, minimize risks, and optimize spending.

1. Software Compliance Management
A Critical Component of Software Asset Management

2. Software Asset Management - Overview
Software Asset Management is the practice of integrating people,
processes, and technology to allow software licenses to be
systematically tracked, evaluated and managed.
The goal of Software Asset Management is to reduce IT
expenditures, human resource overhead, and risk inherent to
owning and managing software assets.
Software Asset Management Key Process Areas
Acquisition Management Education
Asset Identification Financial Management
Compliance Management Legislation Management
Communication Policy Management
Disposal Management Project Management
Documentation Vendor Management
Copyright © 2009 The W Group. All rights reserved. 2

3. What is software compliance, and how does
non-compliance happen?
Software License Compliance is determined by whether you have
legally acquired, configured, and are utilizing a genuine copy of a
given copyrighted product in accordance to the licensed terms set
down by the copyright holder.
Non-Compliance is either the intentional, or unintentional misuse
of copyrighted software assets. Many factors can contribute to
non-compliance.
Internet Piracy Soft Lifting Complex Metrics Counterfeiting
Hard Disk Loading Virtualization Poor Documentation Management
Bundled Suite Breaking Ineffective Policies Software Rental
Copyright © 2009 The W Group. All rights reserved. 3

4. The W Group Software Compliance
Management Practice brings you skilled
sourcing executives, best in class
processes and tools to meet today's
complex software environment.
Why Be Concerned about Software (SW) Compliance?
In the current economic environment, SW vendors are under tremendous financial pressure to maintain
and grow revenues. As a result, The W Group has seen an increase in the level of SW license
compliance audits initiated by SW vendors. Penalties for non-compliance are often in the range of
hundreds of thousands of dollars. Understanding where you are currently will save significant sums of
money. The W Group Consultants are experienced at assessing the level of compliance of companies
and can help ensure that you are effectively utilizing the SW to your fullest advantage.
It is imperative that you understand what SW license rights you have acquired, where you have the
licenses deployed and whether the license use complies with the terms of each SW license agreement.
This information can be used to eliminate your risk of non-compliance and optimize your SW license
investments.
In a recent survey of 343 IT professionals -- about 24% were CIOs or other IT
executives -- most of them admit they've let licensing compliance slip.
Copyright © 2009 The W Group. All rights reserved. 4

5. A recent survey of IT executives identified
significant concerns regarding SW compliance.
A survey of IT professionals was conducted in May 2008. The goal of the survey was to
gather data about the current state of SW license compliance in corporate IT, including
existence of unlicensed SW, efforts being made to ensure compliance, and perceptions
of the impact of SW audits on IT teams.
 73% of IT executives and managers believe they are not prepared for a SW audit
 69% of participants are not confident that they are fully in compliance with SW
license agreements
 67% of IT executives and managers do not believe their companies have taken
appropriate steps to ensure compliance
 60% of IT executives and managers believe they have unlicensed SW deployed
 56% of participants track software assignments manually or not at all
 32% of total participants believe they are prepared for a SW audit
 16% of participants can automatically report on compliance; 20% are unable to report
on compliance at all
 8% of participants have a fully automated process for tracking SW license compliance
Source: King Research, May 2008
Copyright © 2009 The W Group. All rights reserved. 5

6. The W Group can help you better understand
your complex SW environment, minimize your
compliance risk and optimize your spend.
• Do I have a SW compliance issue?
License Models
• Do I have proof of purchase of my SW
license(s)? er
Per Per Value Per r Us
MIPS Per Server
CPU Core Units Device Pe
• Do I have a handle on where all of my SW is O/S License
deployed? Grant
• Is my company at risk if there is a SW
License Agreements
Acquisition
audit?
Software Types
Database
Records
e
Op
nc
tim
• Have I bought more software than I am l ia SW
p
iza
using? m Inventory Warranty
Middle Ware
Co
tio
n
• Am I paying maintenance for unused
software? Application SW SW Maintenance/
Acquired Metering Support
• Does my team have the right tools,
processes, skills and knowledge? Infrastructure
Management Indemnification
• How effective is my IT Asset Management Client Responsibility
program? n
a tio Pricing
• Are there better licensing models that I can liz Virtualization
ua
deploy? (i.e. user v. CPU) V i rt
Mainframe Unix/Linux Intel Desktops PDA’s
• Is my software pricing competitive?
• Are my software agreements terms flexible? Hardware Platforms
Copyright © 2009 The W Group. All rights reserved. 6

7. The W Group is focused on industry best-
practices.
The W Group uses processes and best-practices from the International Association
of Information Technology Asset Managers (IAITAM) and the Information Technology
Infrastructure Library Version 3 (ITIL V3).
The W Group…
…has IAITAM Certified advisors.
…is an IAITAM Provider Member firm.
…has ITIL V3 Certified advisors.
…is an experienced firm in ITIL implementation.
Copyright © 2009 The W Group. All rights reserved. 7

8. The W Group has many offerings to address
your Software Asset Management needs.
Software Asset Management
SAM Program Design SAM Program Assessment
Compliance Assessment SW Licensing Strategy
SW Deployment Strategies
Assisted Self-Audit
Virtualization Impact Analysis
Compliance Audit Support
Server Consolidation Impact
SW Inventory Service
Maintenance Renewal Analysis
License Agreement Analysis IT Asset Optimization Study
Copyright © 2009 The W Group. All rights reserved. 8

9. The W Group also has service offerings centered
around SW sourcing and contract negotiations.
Information Requirements Actions/Output
Develop/
The W Group License Execute Analyze Negotiate/
Offerings Strategy Reqmts. Agmts. Strategy & Assess Report
SW Sourcing
SW Contract
Negotiations
Contract
Reviews
Competitive Pricing
Analysis
Copyright © 2009 The W Group. All rights reserved. 9

10. The W Group delivers results through the use of
our tools, templates and resources, each
customized to meet your needs.
Process & Procedures
Data Gathering Software Maintenance Invoice Processing
Vendor sends maintenance
• SW license agreements
renewal quote to Analyst two
months before end of term.
1.1
Cost Savings Opportunities
Vendor
Vendor re-submits
quote.
1.4
• Entitlement/ordering process Prepare purchase
Send email to vendor
Does the requisition with quote
requesting new quote
Analyst
invoice pricing align on behalf of Asset
and reason for No Yes
with the contract? Owner in purchasing
rejection.
• Purchase order history
1.2 system.
1.3
1.5
A
A
Asset Owner
Review purchase
Did you Send email to
requisition and confirm
• Acquisition data from SW Reseller
approve the purchase Analyst with reason
software is in use and that No
requisition? for rejection.
the SLAs are appropriate.
1.7 1.8
1.6
Procurement
Generate the
purchase order.
• SW deployment/inventory data
1.9
Accounts
Payable
• Metering/usage information
Assessment and Analysis Software License
Management Maturity Model
• Non-compliance analysis Level Ownership Tracking
This is sample language
from our Softwrae license
Deployment Tracking
This is sample language
from our Softwrae license
Utilization Tracking
This is sample language
from our Softwrae license
Compliance Monitoring
This is sample language
from our Softwrae license
Governance
This is sample language
from our Softwrae license
Agreement Processes
This is sample language
from our Softwrae license
Management Maturity Management Maturity Management Maturity Management Maturity Management Maturity Management Maturity
Model template Model template Model template Model template Model template Model template
Software Compliance and
• License optimization analysis Optimizing 4
This is sample language This is sample language This is sample language This is sample language This is sample language This is sample language
from our Softwrae license
Management Maturity
Model template
from our Softwrae license
Management Maturity
Model template
from our Softwrae license
Management Maturity
Model template
from our Softwrae license
Management Maturity
Model template
from our Softwrae license
Management Maturity
Model template
Maintenance Payment Schedules
from our Softwrae license
Management Maturity
Model template
Deliverables Advanced 3
This is sample language
from our Softwrae license
Management Maturity
This is sample language
from our Softwrae license
Management Maturity
This is sample language
from our Softwrae license
Management Maturity
This is sample language
from our Softwrae license
Management Maturity
This is sample language
from our Softwrae license
Management Maturity
Initial Future
This is sample language
from ourProduct license
Softwrae Product Discount
Vendor Discount Discount Term Mntce Fees COLA
Management Maturity
Renewal
Term
Auto-
Renew?
Notice Parking Hours of Service
Period Lot
Maintenance
Coverage Levels Reinstatement fees
Model template Model template Model template Model template Model template Sybase template
Model 60% 50% 5 yrs 17% of Net 3% 1 yr Y 30 Days Y 24 x 7 Gold Retro $ + 17% of Net
BEA 20% 10% 2 yrs 21% of List CPI 1 yr Y 90 Days N 24 x 7 NA Retro $ + 21% of List
EMC eRoom 45% 3 yrs 22% of Net 3% 1 yr Y 30 Days N 24 x 7 NA Retro $ + 22% of List
• Compliance reporting
Evolving 2
This is sample language This is sample language This is sample language This is sample language This is sample language This is sample language
from our Softwrae license from our Softwrae license from our Softwrae license from our Softwrae license from our Softwrae license
Sample Compliance and Utilization Model
from our Softwrae license
Management Maturity Management Maturity Management Maturity Management Maturity Management Maturity Management Maturity
Product & Actively
Model template Model template Model template Model template Model template Vendor template
Model Description License Type Entitlement Deployed Compliance Used Shelfware Notes
Sybase PowerBuilder Named User 80 55 25 45 35
BEA WebLogic CPU 35 45 -10 45 0
Basic 1
• Risk mitigation strategy This is sample language EMCThis is eRoom language User
This is sample language This is sample language This is sample language This is sample language sample 5000 4500 500 3900 500 - 1100
from our Softwrae license from our Softwrae license from our Softwrae license from our Softwrae license from our Softwrae license from our Softwrae license
Management Maturity Management Maturity Management Maturity Management Maturity Management Maturity Management Maturity
Model template Model template Model template Model template Model template
Sample Invoice Model
Model template
Term Safeway
Vendor Product Qty Lic Type Location Cost Start Term End Contact
Chaos 0
Sybase PowerBuilder 80 Perpetual User Walnut Creek $ 90,000 1/1/08 12/31/08 Friedel
• Detailed cost savings opportunities Source: The W Group, Gartner Group
BEA
EMC
WebLogic
eRoom
35
5000
Sample Maintenance Payment Schedule
Perpetual User
Perpetual User
Walnut Creek
Walnut Creek
$ 65,000
$ 100,000
1/1/08
7/31/08
12/31/08 Friedel
8/1/09 Friedel
Vendor Product Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Total
Sybase PowerBuilder $ 90,000 $ 90,000
• Process design documentations BEA
EMC
WebLogic
eRoom
$ 65,000
$ 100,000
$ 65,000
$ 100,000
Copyright © 2009 The W Group. All rights reserved. 10

11. The W Group’s offerings will be customized to
meet your needs. Timelines will vary based on
scope and complexity.
Data Gathering
0 days - 3 weeks
Discovery
2 days – 10 days
Utilization
4-6 weeks
Analysis and Assessment
2 -3 weeks
Recommend
1-1.5 weeks
6 weeks total
Note: This sample shows a typical SW license compliance assessment.
Copyright © 2009 The W Group. All rights reserved. 11

12. Practical. Adaptable. Experienced.
 Our consultants are:
— All senior-level professionals with an
average of 20 years’ experience
— Focused on using practical management
techniques that produce rapid
improvements
— Skilled at working with executive
management and dealing with a broad
range of cultural and jurisdictional issues
— Adept at bridging the communications gap
between technology and business metrics
— Experienced in both business processes
and information technology
— Dedicated to producing value for our
clients
Copyright © 2009 The W Group. All rights reserved. 12

13. Examples of our Fortune 500 software asset
management and vendor management
experience
 Kevin O’Hara:  Mark Vandergast:  Stephen LeVine:
6 years in software solution 20 years in strategic sourcing, 24 years in strategic sourcing,
design, implementation, and vendor management, finance, vendor management, finance,
complex software license logistics and operations logistics and operations
agreements. management management
Experience in pharmaceutical, Experience in pharmaceutical, Experience in insurance,
healthcare, banking, healthcare, banking, healthcare, banking, warehouse
manufacturing, distribution, distribution, computer services and distribution, construction,
insurance, technology industries manufacturing, facilities
Practical knowledge of software Practical knowledge of best Practical knowledge of best
compliance, IT Asset practices in strategic sourcing practices in strategic sourcing,
Management program design, and vendor management vendor management, domestic
complex software licensing, Led IT sourcing team and international BPO
vendor software agreements. responsible for $200M in Led multiple sourcing
Led many internal audits for managed SW spend and organizations for fortune 500
clients leading to penalty achieved 10+% year over year companies, influencing spend in
avoidances of up to 90%. savings the billions of dollars while
Identified an auditor mistake Personally negotiated over 125 consistently delivering hundreds
that led to an $800k savings. IT contracts of millions of dollars in savings
"Competition takes place between supply chains, not individual firms."
Dr. Simon Croom, Executive Director of the Supply Chain Management Institute at the University of San Diego
Copyright © 2009 The W Group. All rights reserved. 13

14. The W Group has delivered results for our
clients.
A Midwest manufacturing company A multinational pharmaceutical firm
was facing a software compliance was informed that a SW vendor
audit bill for non-compliance in suspected it was under-licensed. The
excess of $800K. After analysis by a W Group helped the firm optimize its
W Group advisor, several major licensing and negotiated a SW
miscalculations by the audit firm purchase which resulted in $300K+ in
were identified and the compliance savings over 3 years and a new
bill was reduced to a little over MSLA with improved T’s and C’s.
$100K, a savings of $650K+.
A Northeast financial services firm A multinational pharmaceutical firm
engaged The W Group prior to was issued a $1.7M invoice for
signing a proposed enterprise SW unauthorized SW use. The W Group
agreement. Based on our analysis, helped the firm optimize its licensing
the firm negotiated an additional $2M and successfully negotiate the non-
in savings and secured improved compliance fee to $150K, a savings
T’s and C’s. of $1.55M.
Copyright © 2009 The W Group. All rights reserved. 14

15. Quotes from our clients
“I would enthusiastically recommend your firm to anyone
Needing contract development expertise.
Equally important, I look forward to doing more business
with you in the future.”
Mark A. Ritter
Chief Operating Officer
Commerce Bank
“The W Group did an excellent job reviewing our IT Services
and Purchase Agreements helping us achieve savings and
organizational improvements.”
Robert Pompey
Senior Vice President
IT Operations
TD Bank
The W Group provided knowledgeable experts who
reviewed our maintenance spend and helped us identify
savings opportunities. This led to a 22% reduction in our
server hardware maintenance.“
Ryan Steinberger
Vice President
Wyeth Pharmaceuticals
Copyright © 2009 The W Group. All rights reserved. 15

16. Contact information
Harry Wallaesa
President and CEO
(610) 213-4701
hwallaesa@thinkwgroup.com
Please Visit Us At www.ThinkWGroup.com
Copyright © 2009 The W Group. All rights reserved. 16