As state governments across the country look to modernize their IT infrastructure while keeping budgets in check, a quiet policy shift in Ohio is raising questions about whether Georgia should follow suit.
This summer, Ohio Governor Mike DeWine signed a provision into law aimed at curbing restrictive software licensing practices, a long-standing pain point for public-sector IT leaders and procurement officials. With the passage of this measure, Ohio became the sixth U.S. jurisdiction to adopt fair software licensing standards.
At the core of the legislation is a response to a growing concern that some large software vendors are locking government customers into expensive, inflexible licensing agreements, a phenomenon known as "vendor lock-in." These licensing terms often make it difficult for state agencies to switch providers, move to cloud-based infrastructure, or avoid paying for unnecessary software bundles.
Georgia, like many states, spends hundreds of millions of dollars each year on IT systems and services. Without oversight of licensing practices, procurement experts warn, states may be overpaying for software that no longer meets their needs, or paying twice for the same service when trying to modernize.
The new Ohio law ensures that state agencies can no longer be contractually restricted to running software only on a vendor’s preferred hardware or cloud. They retain the right to choose the infrastructure that works best for them and for taxpayers.
Supporters of the law include the Coalition for Fair Software Licensing and the Alliance for Digital Innovation, both of which have called the policy a model for other states as they work to increase transparency in software licensing.
The push for reform is not limited to the state level. The Federal Trade Commission is reportedly investigating software licensing practices that may stifle competition and inflate costs.
Historically, software was sold under perpetual licenses that gave buyers broad control over how and where it was used. But over the past two decades, especially with the shift to cloud computing, large software vendors have changed their licensing models. Common practices now include:
- Charging extra fees for running software on a non-preferred cloud provider.
- Requiring customers to re-purchase licenses when moving from on-premises to cloud.
- Bundling unrelated software to boost contract value.
- Imposing restrictive terms that make switching providers cost-prohibitive.
Georgia has made substantial investments in IT modernization, particularly in digital services and cloud infrastructure. But without licensing reform, much of that investment could be undercut by legacy contract terms that prioritize vendor profits over public efficiency.
As public scrutiny of vendor practices grows, Georgia lawmakers may soon face a decision: stay the course and risk wasteful spending, or join a bipartisan push to level the playing field.
