Understand Multiplexing Or Face Unexpected Software License Charges

IT sourcing and vendor management professionals increasingly run into disputes with their application and database vendors over how to count users in their complex and diversely integrated architectures. The vendors' basic rationale is reasonable — they want to charge people who directly use a third-party software product integrated with their own for indirect use of their intellectual property (IP). They address this by instituting a little known and even less understood policy called multiplexing, which works in their favor unless the client takes the right precautions. The result of the multiplexing policy is often that the customer needs user licenses for more people in its organization than it would expect or regard as fair. IT buyers should learn about this issue so they can negotiate fairer treatment and mitigate multiplexing's impact on their organizations.