With software pervading virtually every industry and M&A deals on the rise, it is now more important than ever for businesses to ensure effective due diligence is carried out in M&A transactions. Identifying and investigating IT assets in the early stages of a deal is necessary to avoid a range of issues including security, quality and open source licensing, which often leads to unanticipated IT spend and possible regulatory compliance issues or even termination of a deal.
Software has become critical to the success of companies in industries far removed from technology from banking to automotive to manufacturing. Moreover software deployment is rapidly moving from “on premise” to functions provided by third party services without software being distributed (such as Salesforce.com) and the move of companies to cloud computing. This fundamental change in the manner in which software is used means that companies need to understand how OSS licenses apply in this new world.
Open source software (OSS) has become a fundamental part of the IT infrastructure of virtually all companies. Such criticality naturally gives rise to legal issues as organizations protect their own interests in the context the sharing inherent with open source.
Today’s technology companies increasingly rely on open source software to create better software and services faster. IDC reports that 30% of the deployed code in the Global 2000 is open source software, and it is likely many times higher in resource-strapped startup environments. However the day-to-day practice of using open source is often uncontrolled, particularly in startup companies, and can potentially create unknown legal and operational risks with a company’s software assets.
Best-in-class organizations are utilizing up to 80% open source code to rapidly deliver solutions. As the amount and frequency of new open source increases within your code base, ensuring that the right binaries show up in your build is becoming more and more challenging.
Today's technology companies are increasingly utilizing free and open source software (FOSS) to help enable innovation in their development organizations. However the day to day practice of using FOSS is often uncontrolled, potentially creating unknown legal, business and operational risks arising from the unique obligations found in many open source licenses. As a result, acquiring companies are now focusing more heavily on open source and third party code in their due diligence practices to uncover issues before M&A transactions are completed.
This annual review will highlight the most significant legal developments related to open source software in 2013, including:
Topics Include Open Source Compliance - from Risk Mitigation to Competitive Advantage