14 December 2007: Software piracy is no pantomime

Don’t risk an unlimited fine or ten years in prison, says Dave Senior of Indigo Technologies, just because your software is not managed

If you had a fleet of company cars, you’d have a fleet manager who would license them and keep them within the law, and the same applies to your software. Heavy fines or time in prison can result from falling foul of the software police, so you must consider whether a couple of hundred pounds worth of illegal software is worth risking your business over.

FAST, the Federation Against Software Theft, became the world’s first software anti-piracy organisation when it was set up in the UK in 1984, and has been busy ever since.  In 2005, supported by local police, FAST raided computer hardware from a Cheltenham and Wiltshire based company which was found to be running an unauthorised copy of a major proprietary payroll application. The company subsequently ceased trading and went into liquidation.

Even in the Aberdeen area companies have concerns about software compliance. One company asked Indigo’s advice about software licenses – a number of licenses had been paid for but no certificates had been supplied, which caused the management some unease. Indigo carried out an extensive software audit across all the company’s PCs, and found several discrepancies which were then sorted out. The company is now totally compliant and its software licenses are managed on an ongoing basis, with spreadsheets to track all licenses and provide reminders when necessary.

When a company finds itself in a muddle over software and licenses it may have to employ a legal firm to clarify the position – so it’s better to manage the situation before difficulties arise.

According to a recent survey, nearly half of all SMEs in Britain are lacking any form of software licensing policy and most are unaware of the legal obligations of having software licenses – and probably of the consequences for breaking the law with pirated software.

Managing your company’s software licenses – and getting compliant in the first place - can be a time-consuming and complicated job in itself, but that’s where external professional support comes in. It’s just the kind of service that it makes sense to outsource to the professionals.

Many IT service companies provide a software audit service that audits all the company’s software and all its software licenses and compares the two. Rarely do they match. From the audit the IT specialist can advise the company’s management just what additional licenses need to be purchased, or what software needs to be removed from company PCs in order to keep the company compliant.

A company may have purchased more licenses than it needs, and so can reduce its license burden, but more often it finds a lot of unlicensed software on its PCs, which must be either removed or licensed.

In a recent software audit of 2,500 PCs at a UK financial institution FAST discovered over 5,800 illegal digital music files. Most of these files were illegally downloaded by people in the IT department - those normally tasked with combating the problem.

In order to keep up its compliance, a company usually has to restrict normal users from installing unauthorised software, instigate a strict company software policy, and enforce that policy whenever there is an infringement.

One local company came to Indigo with system crashes, which turned out to be caused by unauthorised downloading of software. Once the problem had been clarified, management authorised Indigo to advise all employees on the possible risks from unaccredited software, and a policy was put in place to control such activities within the company’s network of PCs.

A study of British companies commissioned by FAST last year revealed that nearly half of respondents (48%) claim they’d have difficulty proving to their company board that all their software was legal. At Indigo we believe that the actual  percentage of businesses is much higher than this. 

The study also showed that 42% of those questioned believe they don’t have sufficient manpower to manage their IT assets. Indigo’s experience demonstrates that this figure is actually much higher among most SMEs, which have more problems complying than larger organisations.

With a proper policy in place an organisation can get compliant and stay compliant  by sticking to two simple rules

• Buy software only from reputable dealers
• Make sure you get software licences in electronic or paper format – these are important

And remember, even Shareware must be deleted or purchased after the initial evaluation period. If not you are infringing the copyright of the Shareware company and that’s illegal. ‘Winzip’ software is an example of this – if you don’t pay for it after the initial trial period then you are using the software illegally.

Beware... if software is being sold for a much lower price than it should be, then it’s likely to be pirated.