Are You Safe From The Software Police? A Guide to Software Licensing

It has been estimated that illegal software in the United States accounts for as much as 25% - 50% of the software in use. Businesses are affected because pirated software often does not perform as well as the original and may disable some system functionality. Pirated software also does not include technical support and software updates and may contain viruses. Also, what most managers do not know is that if employees duplicate or install software illegally, the company could face up to a $150,000 fine for each copyright infringement.

The Business Software Alliance (BSA) is an industry group of software development companies that has a whistleblower program online where an employee can report software piracy at their office. The BSA is offering up to a $1,000,000 reward depending on the amount of infringement.

Most companies do purchase their software, although their employees err when they install the software on more computers than the license permits. Other ways companies get software illegally include downloading it from the internet, brining home software purchases into the office, and buying used software online. Caveat emptor: The law for buying used software is a legal grey area. Even though you may be in possession of the retail box and original CD, in some cases the license ownership does not transfer into your name.

Software licensing commonly comes in three different forms: per seat, per user, per server, and per connection. Some software can be licensed in any of these four modes, while others requires a specific mode. Per seat licensing is per computer – meaning that one license must be purchased for each computer. This is the most common type of licensing for desktop software such as Microsoft Office, Adobe Acrobat, and QuickBooks. Per user is based on the number of users who have access to the program. In many cases, per seat and per users is the same amount of licenses, but it differs in an organization where employees share computers. Per server licenses one server to use a program and in turn give access to all computers at one location. Per connection licenses the software based on number of people who are using the program at the same time.

Here are six ways to keep your software licensing under control:

1. The easiest way is to remove administrator access and give the IT department exclusive access to installing software.
2. Write your software and copyright enforcement policies in your Acceptable Usage Policy.
3. Train your employees on the seriousness of using pirated software.
4. Keep all of your purchased licenses in a database so you know what you own.
5. Block P2P network traffic such as Kazaa and File Donkey.
6. Set up your e-mail server to not permit attachments of program files such as EXE and large file attachments.