Magazine article Management Today

Are You a Software Thief but You Don't Know It?

Magazine article Management Today

Are You a Software Thief but You Don't Know It?

Article excerpt

End-users are much more prevalent than counterfeiters in the world of software piracy. End-users? Worryingly, it could be you.

As Evan Cox sips his tea quietly in the London office of American law firm Covington & Burling, he appears an unlikely figure to be striking fear into the hearts of respectable British managers. Murder One it isn't, but Cox and his client, the Business Software Alliance (BSA), are fighting a crime that - in their view - is deadly serious: software piracy. And this time they mean business. As this article went to press, the BSA was considering bringing criminal actions against two British companies. These are not businesses which manufacture or distribute counterfeit software, but end-users - ordinary businesses which have been caught using unlicensed software.

Until now, the software industry has pursued a civil remedy against end-users, but Cox believes the time has come to take a harder line in the UK. 'We've had jail sentences against managing directors in other countries,' he says bullishly. The message is clear - as far as the software industry is concerned, it's time to get tough. And with the prospect of an unlimited fine, or up to two years in prison for individuals found guilty of infringing copyright, businesses would do well to take notice.

The problem for the BSA is that while its members - which include US software publishers Adobe, Lotus Development and Microsoft, along with Infobank and Dr. Solomon's Software of the UK - may take the issue of software piracy seriously, many don't. Software piracy doesn't trigger the same moral warning bells as other forms of theft, and most executives would throw up their hands in horror if you even suggested they were doing something illegal. It appears that software piracy inhabits a grey area in corporate morality.

According to the BSA, about half the piracy problem can be ascribed to end-users. These divide into three sorts: the first group have simply not kept up with the technology and don't realise they need to pay attention to it in the same way they do their tax affairs. The second group have pre-installed software which is not properly licensed. Depending on the organisation and its IT setup (for example, whether it is on a network), senior executives may, or may not know there is something fishy going on - although they will still be held liable if they are caught. But the third and largest group, according to Emilia Knight, BSA vice president and managing director, Europe, is 'where the problem happens because it is somebody's fault'. This could be anything from wide-scale infringement of licences condoned at management level, down to Fred in systems giving Sonia in support a copy of his word-processing program.

Cox has no time for excuses. 'What galls me most is when end-users say: "We don't understand the licences." If you have an IT function then you hire an IT manager.' Licences are an important factor in the profits that software manufacturers make from the sale of 'packaged' or 'shrink-wrapped' products, which can be bought off the shelf, as distinct from bespoke systems designed for a particular user. A company might have one physical copy of a piece of packaged software, but it is the licences which proscribe how many people in the company can use it, whether they can also run it on a laptop at home and whether the company itself is breaking the law.

Software houses have no inclination to set industry standards for the licences they offer, considered by some as overcomplicated and too varied, as they are as much a part of a product's marketing strategy and commercial edge as its price and contents.

According to BSA estimates, some [pounds]2.5 billion of potential revenue in Western Europe was lost as a result of pirated software in 1996. The UK had the lowest software piracy rate in western Europe at 34% in 1996 - a drop of 4% on the previous year. Greece had the worst rate at 78%. …

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