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ADTRAN (NASDAQ:ADTN) Q3 2018 Earnings Conference CallOct. 17, 2018 10:30 a.m. ET
Contents:

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Prepared Remarks:
Operator
Ladies and gentlemen thank you for standin…

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United States: Autodesk Audits: How Did Autodesk Know To Audit You And What To Do Now?

October 13, 2018 autocad 2018 - Google News 0

Facing a software audit is a daunting process, which takes time,
money, and resources to complete. Typically, the first question the
target of an audit asks is whether the audit is legitimate, closely
followed by why the company has been selected for an audit.

What triggers an Autodesk audit?

Disgruntled employee: One of the common ways an
audit may be initiated is a report from a current or former
employee, often seeking a monetary reward or to punish the company.
Autodesk makes it easy to report a company for unlicensed software
at this web site.

  1. Autodesk reporting technology:
    Many of Autodesk’s software products have reporting technology
    embedded that automatically updates Autodesk about installation and
    usage from the initial installation through various reporting
    periods. Therefore, if a company has AutoCAD 2018, for example, and
    it reports to Autodesk that it is installed for multiple users,
    Autodesk’s compliance team can check those deployments against
    any registered licenses for that company. If none are found, then
    the legal team will likely initiate an audit and seek copyright
    infringement damages for any unlicensed software.
  2. Database of Illegal Serial
    Numbers
    : Autodesk regularly tracks
    unlicensed software by collecting illegitimate or
    “cracked” serial numbers. If these numbers are entered by
    a company into an Autodesk database or online profile, it may
    trigger an audit.
  3. Vendor: Although it
    is less common, sometimes a vendor will report a company for
    unlicensed software if a company obtains a large quote and fails to
    make the purchase. This type of reporting is less common for a
    number of reasons. The company could have simply purchased from
    another vendor and has the proper licenses it requires, and more
    importantly, a vendor found to be reporting on potential customers
    would permanently alienate business.
  4. Social media or
    LinkedIn:
    In one particularly unique situation, Autodesk
    admitted that it targeted a company because the principal was
    endorsed by someone on LinkedIn for having expertise in a
    particular Autodesk software product, and Autodesk’s attorney
    determined that no Autodesk licenses were registered to that
    company. This quickly became problematic because the principal did
    not, in fact, have experience with Autodesk or have it installed on
    any of the company’s machines. At that time, it was not
    possible to manage an endorsement from a colleague on LinkedIn.
    However, the company spent significant time and money defending
    against the Autodesk audit.
  5. BSA or other agency:
    BSA | The Software Alliance is an entity that has Power of Attorney
    from Autodesk (and other software publishers) to pursue copyright
    infringement claims against businesses. These audits are often
    triggered in the same ways an Autodesk audit is initiated (from a
    vendor or an informant). However, these audits are not limited to
    only Autodesk products, and can be triggered by other publishers,
    with Autodesk opting in the audit.

What information does Autodesk have regarding deployment
data?

If a current or former employee shared data with Autodesk, it is
possible that Autodesk could have a detailed account of the
deployments. This is a particular concern if the former or current
employee has access or administrative rights to the network through
the IT department.

In addition to a report from an employee, Autodesk can obtain
deployment data through authorization checks built into the
software. Not only does Autodesk likely have a record of the
installation on the network, it is possible that the serial numbers
may trigger an audit if they are known to be illegitimate. However,
much older versions of Autodesk software may not have the same type
of reporting, so it is possible Autodesk may not be aware of these
installations unless they were properly registered and recorded
with Autodesk when purchased.

Many Autodesk users recently reported a problem with the
authorization checks in AutoCAD 2018 single-user licenses after the
authorization check crashed the system. If you have encountered
this issue, Autodesk has provided the following instructions to
troubleshoot:

Solution:

Download and install the Autodesk License Service 5.1.5 Hotfix
1.

To download updates and hotfixes, use the Autodesk Desktop
App
(see Where to get Product Updates, Add-ons, and
Enhancements
) or access the direct links below. Before
installation, ensure the internet connection is working and
repaired if needed.

Performing a Windows installation:

  1. Stop all Autodesk products that are
    running.
  2. Download the following file based on
    the installed Autodesk software:
    Autodesk License Service (x64) – 5.1.5
    HotFix 1
    (560 KB)
    Autodesk License Service (x86) – 5.1.5
    HotFix 1
    (1820 KB)
  3. Double-click the downloaded file to
    begin the installation.

Performing a Mac OS installation:

  1. Stop all Autodesk products that are
    running.
  2. Download the following file:
    1.5.pkg(12.7 MB)
  3. Double-click the downloaded file to
    begin the installation.

Note: When manually downloading and installing
the license hotfix, the installer will install and then quit
without a message of completion.

How to determine whether installed products are properly
licensed?

Autodesk has significantly cut the risk of unlicensed software
by making the transition from a perpetual licensing model to a
subscription-based model. However, many customers continue to
deploy and use older, perpetual products.

If a company has not been audited by a software publisher, it is
likely only a matter of time before it receives an audit request.
Therefore, if you have not conducted an internal analysis of the
company’s software assets, it is prudent to do so immediately.
By catching potentially illegitimate software prior to an audit can
save thousands to hundreds of thousands of dollars in potential
copyright infringement penalties and legal fees.

All Autodesk products contain a serial number for each
installation. There are a number of common illegitimate or
“cracked” serial numbers circulating the web, including
ones that repeat (for example, 696-696969) or ones that increase
numerically (123-456789). If any of the serial numbers assigned to
current Autodesk installations are similar to these numbers, they
are likely invalid and should be immediately removed and replaced
with legitimate Autodesk licenses.

Unfortunately, this process may be more expensive in the short
term because an old perpetual copy of AutoCAD Design Suite, for
example, cannot replaced with a newer perpetual version of the same
product. Now that the licensing models have changed, a company will
be required to obtain a subscription, which can be purchased in 1-
to 3-year increments.

Autodesk offers standalone or networked license options, which may be found here.

What steps should a company take to respond to an Autodesk
audit?

The first step for any audit is to conduct an analysis of the
deployments in its environment. This process seems straight-forward
but can become very complicated. Obtaining an accurate inventory is
critical to determine whether any of the software is unlicensed.
After the initial assessment, the second step is to conduct a
quality control analysis in order to isolate any instances of false
positives such as remnants in the registry of older, uninstalled
products, trial versions, or any free reader versions. Once an
accurate inventory is collected, the third step is to compare the
data to licenses registered to the company.

This process may be complex due to license restrictions and
rules relating to software installed on servers, networked
licenses, and standalone licenses, in addition to the license rules
for transferring licenses between employees. The final step is to
determine whether the license applied to each installation is
proper and falls within the software license rules is a crucial
step in determining potential exposure for unlicensed software.

It is not uncommon for a company to own more licenses than are
installed and expect those licenses to cover a shortfall on
another, unrelated product. The licensing rules for Autodesk
products may be found in an Autodesk End User License Agreement.
There are also a number of license terms for online services and subscription
licenses
.

Once the data and licenses are verified, the audit results are
submitted to Autodesk, and a company will begin to negotiate a
resolution with Autodesk for any unlicensed software, which may
include both penalties and the replacement cost for obtaining
legitimate licenses.

How to avoid purchasing illegitimate software:

The best way to avoid purchasing illegitimate software is to buy
from an Autodesk authorized reseller or Autodesk directly. Options
are a bit more limited with the subscription-based model, but it is
still possible to procure a slight discount.

Many companies will note that they are Authorized Resellers on
their web site but will not necessary sell legitimate software. You
can search for resellers in your area on Autodesk’s web site,
or simply acquire the software directly from Autodesk.

How to manage future Autodesk compliance:

In addition to conducting internal audits, it is possible to
manage licenses through the Autodesk network licensing manager.

The following are step by step instructions from
Autodesk’s web site
for managing licenses, user access, and
deployments:

Managing User Access

  1. Sign in to your Autodesk Account at
    autodesk.com.
  2. Select Management to
    view your Products & Services.
  3. Click on the Users
    icon in the left-hand navigation menu.
    Note: The User Management icon is only visible to
    account administrators such as a Contract Managers and Software
    Coordinators
    .

The User List is the primary interface for managing users in
your Autodesk Account. Click the arrow next to a user name to
display the following information:

  • Name & Email
    Address:
    Used to sort users and grant access to Account
    benefits.
  • Product &
    Services:
    Number of software assets or cloud services
    assigned to a user.
  • Benefits: Items such
    as access to software downloads and customer support.
  • Status: A check
    indicates the user has accessed assigned benefits.

4. Click the Edit Access link to the right of
the user’s name or select multiple users and select
Edit Access from the Actions pull-down menu.

5. Select Benefits from the Edit Access screen
to display the available contracts and options. Click the arrow
next to the contract number to expand the contract information
display. Change the options in the Show menu at the top to limit
the number of contracts shown.

6. Click to the check the box next to each of the Benefits
listed that you wish to assign to the user(s). Click the
Save button when finished.

  • Product Downloads:
    Allows the download of full installer files for Autodesk Software
    from Autodesk Account. If you do not want to allow users to
    download and install their own software, do not assign this
    benefit. Note: This assignment applies to all
    contracts.
  • Web Support: Allows
    the user to see the “View my support cases” option in
    the support menu and submit support requests as a benefit of a paid
    subscription contract.
  • Product Extensions:
    Allows the download and installation of software through Autodesk
    Account that adds functionality to or enhances features of software
    products on the contract. If you wish to control access to
    additional software downloads, do not assign this benefit.

Note: In this example, all benefits (2/2) have
been assigned for a single contract, but the same benefits have not
been granted (0/2) for the second contract on the account.

7. Select Products & Services to display
the available contracts and options. Click the arrow next to the
contract number to expand the information display. Change the
options in the Show menu at the top to limit the number of
contracts shown.

8. Click to check the box next to each of the products and
services that you wish to assign to the user(s). Click the
Save button when finished.

  • Products: Listed by
    software title. Assigning an available seat allows that user to
    activate and use the software listed.
  • Services: Controls
    access to online storage and other cloud services associated with a
    software title. Options vary depending on the software. Please
    refer to your software documentation for descriptions of available
    services.

Note: In this example, a single available seat
for AutoCAD LT has been assigned to the user along with 4/4
available cloud services. No access to Maya LT on a different
contract was granted.

Any companies interested in a comprehensive software asset
management program should adopt a policy company-wide that includes
all software installed on its network. The program should include a
way to manage all deployments and licenses in real time in order to
avoid any potential license gaps.

It is important to note that transferring licenses between users
may require some additional steps, so it is critical that the
company understands and reads the license agreement and terms for
each Autodesk license. Customers should also promptly uninstall and
delete trial versions at the expiration of the trial period in
order to avoid remnants or trial versions triggering a false
positive in a future audit.

When in doubt, contact an attorney with experience in Autodesk
licensing and defending against Autodesk audits.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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