Independent, buyer side software due diligence that maps and quantifies licensing and audit exposure while you can still price it into the deal.
Our software due diligence services exist to find the licensing exposure that standard diligence leaves unmeasured. Legal reviews assignability, the accountants review the numbers, and a scanner checks open source. The deployed usage against entitlement for the publishers that drive audit risk is the figure that falls between those workstreams. We own it, we quantify it, and we deliver it to the investment committee before you sign.
We reconstruct the target effective licensing position for every publisher that matters. That means counting deployed usage, mapping it against entitlements, and exposing the gap as a defensible number with its assumptions stated. We focus first on the publishers that drive post deal audits: Oracle, SAP, Microsoft, IBM, and increasingly Broadcom for VMware, alongside Salesforce and ServiceNow as subscription estates grow.
Inherited software licensing exposure is usually latent and unquantified in standard due diligence, and it lands as a publisher audit after close. The acquirer inherits both the usage and the liability. Public proof points show the scale. SAP pursued AB InBev for a reported 600 million dollars and Diageo for a reported 60 million over disputed and inherited licensing, claims that turned on indirect access to SAP through connected systems, as reported in court filings and press coverage as of 2024. We map exactly that kind of exposure before it becomes your problem.
We begin with the contracts and the deployment data, not assumptions. We read the master agreements for the clauses that bite at change of control, we pull entitlement records, and we measure actual usage. We then model the realistic settlement range, not just the list price worst case, so the committee sees a number it can act on. Most engagements run from before signing through the first 100 days after close, so the diligence findings carry directly into reconciliation.
| Stage | What we deliver | Why it matters |
|---|---|---|
| Pre signing | Effective licensing position by publisher | Frame exposure while terms can still move |
| Signing to close | Quantified exposure range with assumptions | Price into escrow, warranty and indemnity, or purchase price |
| First 100 days | Remediation and reconciliation plan | Close the gap before a publisher audit lands |
| Ongoing | Audit defense readiness | Defend the position if a publisher comes calling |
The output of software due diligence services is written for the investment committee, not for an IT audit file. You receive a single exposure number for each material publisher, the assumptions behind it stated in plain terms, and a settlement range that spans the realistic outcome rather than the list price worst case. Alongside the number we set out the options: price it into the purchase price, hold it in escrow, cover it under warranty and indemnity, or remediate it in the first 100 days. Each option carries a cost and a likelihood, so the committee can decide rather than guess.
We also flag the clauses that change the size of the exposure. Deal structure matters because a stock purchase, an asset purchase, a merger, and a carve out each trigger different consent, assignment, and repricing terms. Change of control and anti assignment clauses can require publisher consent, trigger termination, or reset pricing to standalone rates. A license that looks fully paid can become a repricing event the moment the deal closes, and our diligence surfaces that before you commit.
The number a reseller produces and the number an independent advisor produces are rarely the same. A reseller earns margin on the licenses you buy, so the path of least resistance is to true up to list price and move on. We earn nothing on the licenses, so our work is to find every defensible reason the exposure is smaller than the publisher will claim, and to make sure you never pay for capacity you do not use. That structural difference is the whole point of an independent, buyer side advisor.
The earlier we are engaged, the more the analysis is worth. Before signing, a quantified exposure can move price, shape the escrow, or change the warranty and indemnity package. Between signing and close, it drives the consent and remediation plan. After close, it becomes the baseline for reconciliation and, if a publisher comes calling, for audit defense. Because we carry the same team across these stages, the context built during diligence is not lost at handover. Inherited software licensing exposure is usually latent and unquantified in standard due diligence, and the only reliable way to stop it landing as a publisher audit after close is to measure it while the deal is still being negotiated.
We provide commercial and licensing advisory, not legal advice. Where a clause needs interpretation, we recommend you engage your own counsel and we work alongside them with the measured facts.
See the method in our software due diligence guide pillar, and how it plays out in practice: a deal repriced by 6 million dollars, latent VMware exposure found pre deal, SAP risk quantified before signing. Or review the full range of services.
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