About the Coalition

The Problem of Anticompetitive Software Licensing Practices

With factors like the global pandemic reshaping the economy, organizations are expediting plans to migrate software from on-premises servers to services in the cloud to reduce overhead costs, enhance business capabilities, and strengthen cybersecurity. This move to the cloud brings strong benefits to customers, but is viewed as threat by some entrenched software providers who have established themselves as gatekeepers to digital transformation.

Organizations typically rely on a few key software companies to provide productivity, collaboration, & communication tools; databases; and core operating systems. With more organizations moving to the cloud, some software companies are employing restrictive licensing practices that allow them to leverage their entrenched position in IT to act as gatekeepers and dictate customer choice, innovation, and cost for digital transformation.

While these barriers may vary slightly from organization to organization, the most common scenarios are:

Using restrictive and non-negotiable licensing terms that prohibit customers running business software (i.e., productivity suites) paid for and used on-premises from doing so on the cloud provider of their choice;
Requiring customers to run licensed software only on dedicated hardware, increasing the cost of operations and reducing the efficiencies presented by alternative cloud providers;
Conditioning discounts for bulk software licenses on the purchase of the software vendor’s cloud services;
Amending the terms of customer contracts through the use of non-contractual documentation; and
Using the “ABCs” or the predatory tactic of “Audit, Bargain, Close” to lock in customers to the legacy provider’s cloud services.

Regardless of the tactic, the result is the same: reduced cloud migration choice, increased customer costs, and harm to competition, innovation, and growth in the cloud services. Rather than capitalizing on digital transformation to drive their organizations forward and improve operational resiliency, CIOs and CTOs are left diverting outsized time and energy to navigating overly restrictive, complicated, and opaque software licensing options.

An International Effort

The Coalition for Fair Software Licensing is a part of a large movement highlighting the importance of fair and transparent software licensing terms for cloud services and the limiting impact that certain business practices have on growth, opportunity, investment, and security. First launched in France as a collaboration of CISPE (the Association of Cloud Infrastructure Service Providers in Europe) and CIGREF (a CIOs’ association representing over 150 French organizations, mostly the largest listed companies on the Euronext Paris Stock Exchange) in April 2021, the Fair Software Licensing Principles have since gathered the support of organizations representing interests ranging from cloud service startups and their venture funders to CIOs and customer companies in the UK, throughout the EU (including Italy, Spain, Netherlands, Germany, and Denmark), and Israel. The Coalition for Fair Software Licensing is aligned with these parallel efforts and their commitment to changing current business dynamics through the adoption of the Fair Software Licensing Principles, well beyond North America, while also highlighting the unique issues that our North American customers face.

As a healthcare software provider, our ability to utilize the cloud provider of our choice impacts more than just our business – it affects the health and well-being of patients everywhere. Restrictive software licensing imposes real-world threats like pricing increases that directly influence how we are able to assist healthcare providers and the patients they serve. We support the Principles of Fair Software Licensing to protect both cloud customers and the communities they serve.

Healthcare Technology Company

Cloud computing has brought low-cost, on-demand IT services to every corner of the economy, raising productivity and innovation levels at enterprises of all sizes. And intense competition and innovation among cloud providers continues to drive costs down while adding new customer capabilities.

But some incumbent IT vendors are imposing restrictive software licenses to limit how customers can take advantage of competing cloud offerings.

NetChoice supports the Principles of Fair Software Licensing as a roadmap to drive innovation, serve customers, and promote competition in IT services.

NetChoice

Frustration, use limitations, threatened audits, and significant additional expenses. That has been our experience with unfair software licensing. Organizations need transparency from their software providers.

We support the work of the Coalition for Fair Software Licensing to protect customers and ensure IT spend is effective and free from surprises.

Global Building Materials Supplier

Unfair software licensing practices in the cloud are a global issue, and CISPE is pleased that the Coalition for Fair Software Licensing is taking the Principles to North America.

Originally launched and jointly conceived by customers and cloud providers in Europe, we encourage customers around the world confronted with unfair software licensing practices to consider the Principles as a powerful framework for positive change.

CISPE

As start-ups, it is essential that we retain flexibility to use the cloud infrastructures that fit best our aspirations and those of our customers. The Principles of Fair Software Licensing help the next generation of software and service providers to avoid lock in and ensure a fair playing field for all. Seeing their adoption in North America adds weight to this important movement for innovators in Spain and worldwide.

Carlos Mateo Enseñat

President, Asociación Española de Startups (AES), and Promoter of the NUBES Initiative in Spain

Developed in Europe by CIOs and cloud providers, the Principles of Fair Software Licensing are supported by digital organizations in Italy such as Assintel. Assintel welcomes the Coalition for Fair Software Licensing’s embrace of the Principles in North America. Fair licensing of software in the cloud is a global issue for businesses of all sizes. In Italy, our government recognises this challenge and just updated its antitrust bill to put an end to unfair software licensing practices.

Businesses in North America can benefit just as well as those in Italy from a best practice framework for software licensing.

Paola Generali

President, Assintel

As a longtime advocate for open systems and open networks, CCIA supports the competitive ideals reflected in the Principles of Fair Software Licensing for Cloud Customers as the Coalition embarks upon its efforts in North America.

Matt Schruers

President, CCIA

Some legacy software providers are attempting to extend their current on-premise market dominance into the cloud market through aggressive and restrictive contracts, licensing terms, and software audits.

While many promote ‘cloud freedom,’ in actuality they are employing tactics designed to lock out competition and innovation while increasing profits for themselves at the expense of their customers. No longer can legacy software providers be allowed to disguise their predatory practices.

I am proud to align myself with the Coalition for Fair Software Licensing in shining a light on these issues and putting forth actionable solutions.

Craig Guarente

Founder and CEO, Palisade Compliance

Despite the current spotlight on antitrust issues in Washington, behemoth software providers continue to misuse their legacy status and market power to target business customers with predatory audits and trap those customers in restrictive licensing agreements.

Through our practice — dedicated to representing software licensees against these very tactics — we have seen first-hand the real world effects of such licensing practices. Both growing and established companies are routinely kneecapped by unexpected costs, forced to waste immeasurable resources in spurious audit defense, and stymied in their efforts to make the technology changes they believe are necessary for their business.

We support the Principles of Fair Software Licensing and believe they represent an excellent and necessary step towards much needed business consumer relief and will help open the market to smaller providers in the cloud ecosystem.

Arthur S. Beeman & Joel T. Muchmore

Founding Partners, Beeman & Muchmore, LLP

Consumers benefit from a competitive, dynamic information technology marketplace. Competition drives innovation and ensures that customers get the benefit of fair pricing.

Overly restrictive, abusive licensing agreements from IT companies with market power, on the other hand, impose costs on government and corporate customers of reduced innovation and long-term price increases. We support the Principles of Fair Software Licensing and policies that encourage innovation, competition, and licensing practices that give customers the freedom to mix and match solutions from a wide variety of vendors.

This is particularly critical in the market for cyber security solutions since hackers are innovating every day, leveraging new strategies, new tactics, and new technologies to support their illegal campaigns. The only way to defeat nation states and trans-national criminal organizations is for the government to ensure that the IT market for cyber security is as competitive as possible and customers have the freedom to choose.

Cybersecurity Provider

The Alliance for Digital Innovation supports the Coalition for Fair Software Licensing’s efforts to protect customer choice and advocate for access to modern, secure commercial solutions.

As advocates for public sector customers, we think that government mission owners and enterprise information technology and cybersecurity leaders should have access to as many modern commercial solutions as possible.

These solutions are critical components to driving digital innovation and security in the public sector, and ADI supports removing barriers that slow adoption of those solutions, including restrictive licensing practices.

Alliance for Digital Innovation

As an attorney, I have represented enterprise software customers for years and have routinely seen enterprise software companies deploy predatory business practices, including falsely inflating alleged non-compliance gaps, to increase profits and limit customers’ ability to go elsewhere.

These practices produce causal effects throughout the economy including increased prices, as businesses across various sectors are forced to spend resources dealing with these unforeseen issues. I support the work of the Coalition for Fair Software Licensing to help my clients and enhance an economy that provides opportunities to all.

Pam Fulmer

Founder and Partner, Tactical Law Group LLP

We believe licensees should be able to deploy licensed software in a way that best suits their business, including their choice of cloud provider at no additional cost. Having experienced licensing practices inconsistent with the Principles of Fair Software Licensing, we support the Principles and urge others to support both them and the Coalition for Fair Software Licensing.

Insurance Industry Business

Startups, often operating with limited resources, need the freedom to assemble the technology infrastructure that best suits their needs.

Cloud computing infrastructure is central to startup growth, and the Principles of Fair Software Licensing will help maintain accountability, mitigate unnecessary costs, and promote innovation in this environment.

Industry-wide adherence to these principles will level the playing field for startups.

Engine

Meet the Executive Director

The Coalition is spearheaded by Ryan Triplette, who serves as executive director having spent most of her professional career focusing on intellectual property, security, and competition matters.

In September 2017, Ryan founded Canary Global Strategic, combining expertise obtained working with early stage and mature companies with expanding relationships across the European professional community. Prior to founding Canary, Ryan was a Principal at the Franklin Square Group, a bipartisan boutique firm based in Washington, D.C., advising some of the most innovative technology companies in the world as they entered new and generally regulatory-heavy markets.

Ryan previously served as Director of Government Relations for the Intel Corporation. Before joining the private sector, Ryan served on the Senate Judiciary Committee for six years as Counsel and then Chief Intellectual Property Counsel for the Full Committee under the Republican Leadership of then-Senators Orrin Hatch and Arlen Specter.

Ryan is a member of the Virginia State Bar and holds a J.D. from University of Richmond School of Law and B.A. in Philosophy and Communication Studies from Vanderbilt University.