By Berube, Jeanne
Government Finance Review , Vol. 13, No. 5
Software pirating among government personnel creates an internal control problem and a public policy dilemma.
Since the introduction of the personal computer in the early 1980s, software has proliferated as a business tool, and software piracy has proliferated with it. Despite the federal copyright laws in place, many users of both office and home computers are unaware that borrowing or sharing software without holding an end user license agreement (EULA) is illegal. This "harmless" sharing is widespread and generally thought to be safe from penalty, but software piracy law enforcement is gaining momentum. Two industry groups in particular, the Software Publishers Association (SPA) and the Business Software Alliance (BSA), engage in dozens of enforcement actions every year. Two recent examples are described below.
* The City of Philadelphia, Pennsylvania, recently paid more than $120,000 to settle claims it illegally installed software on computers at its offices of air management systems and environmental health services. The illegal software use was uncovered by BSA. In announcing the settlement, the organization said, "Software piracy in the government sector is a problem that is pervasive throughout the country."
* When an anonymous tip led SPA to discover that the Ohio Lottery Commission was using unlicensed software, the state agreed to destroy all the illegal software and buy licensed replacement copies instead of facing further legal action. The investigation also led to Ohio's first statewide software audit.
To contain piracy in software, SPA, founded in 1984, maintains software public policy enforcement and education. BSA was founded in 1988 and enforces international public policy, education and enforcement programs in 65 countries throughout all of the Americas, Europe, and Asia. Their missions have been to advocate for strong intellectual property protection for legitimate business software. SPA represents 1,200 member companies producing 85 percent of the U.S. revenues in software. SPA filed lawsuits at a rate of two a week, receiving $5 million in settlements in 1995. BSA has filed more than 600 lawsuits worldwide. According to SPA, piracy costs the American software industry nearly $13 billion a year ($3 billion in the United States, $10 billion internationally), as shown in Exhibit 1. This amount exceeds the combined revenues of the 13 largest software companies. Piracy hinders the growth and innovation of the software industry, and its customers bear the burden of these losses.
For governments, software pirating represents both an internal property control problem and a public policy dilemma. The piracy of software results in lost jobs and wages, not to mention the penalties, potential for viruses, and lack of documentation and support from its creators. This problem is exacerbated by the fact that 78 percent of employees nationwide have little or no knowledge of computer misuse laws and 72 percent are not warned that computer use may be monitored. By 1985, 84 percent of corporate America had written policies on computer misuse. The State of Connecticut had none.
A Software Policy for Connecticut
State agencies in Connecticut during the past five years increased the use of personal computers by adding $42.3 million in new software licenses (Exhibit 2). Many agencies made personal computers available to all members of their staff. At the state comptroller's office, for example, there was a five-fold increase: from 50 computers to 250. In order to take full advantage of this equipment, several types of software were purchased, from simple word processing and spreadsheet programs to the more job-specific statistical, project management, and database programs. As there were no established standards for software usage, purchasing, and inventory, this proliferation rendered state agencies unable to monitor and control usage in the workplace.
The Connecticut State Comptroller's Office recognized in 1994 that the unregulated use of software meant that state agencies were wasting money on software inappropriate for an agency's needs or that had dubious business value. …