Today, more than ever, computers and software play a vital role in the success of our small businesses, public services and personal lives. It seems that simply staying up to date with the computer revolution can alone cost us a small fortune. These costs are evermore unappealing, especially in today’s economic climate. Software is now considered one of the most valuable assets to a small business. Industry specific software directly helps professionals and organizations compete and innovate; this can include architects, doctors, scientists and financial companies. Even the smallest of businesses rely on spread sheets, word processing programs and emails to operate successfully and competitively on a day-to-day basis. Considering the importance of commercial software, a recent BSA study suggested that only 49% of small businesses are paying for the software they use – that’s a worrying statistic for everyone involved.
More often than not small businesses are unaware of the fact that they have pirated software within their organisation. For small businesses, every single pound is crucial and the trade-off between cost and legality can be marginal. This can leave businesses contemplating the use of pirated software and the possibility of being caught instead of being compliant with their license requirements. Some organisations might find themselves in a tough situation in which their survival is dependent on utilising pirated software to operate – this is a tough moral, ethical and financially risky decision to make. Without software an organisation might find it difficult to survive or continue to operate productively. For example, if a kitchen designer lost the ability to access its CAD software it would find it extremely difficult to produce designs up to the previous market standards expect from its customers.
One reason for a small business to abstain from using pirated software
One reason for a business to abstain from using pirated software (and one that is often overlooked) is the negative affect that it has on a country’s economy. A recent study from the Business Software Alliance (BSA) found that in the UK alone a 1% increase in the use of licensed software would generate a £2 billion increase in GDP, compared to £469 million from a similar increase in pirated software. First we have to look at the reasons why using licenced software has such a positive impact on a nation’s level of GDP.
When a vendor discovers that their software is being pirated, their initial response is to try and combat the piracy. The software industry competes in an extremely competitive market, and to stay ahead, it is necessary to invest heavily in research and development. There is not always a guaranteed return on these investments. If a company is not able to invest in research and development because they are spending their money on trying to stop piracy, they will find it even harder to compete with rival companies. Furthermore, a piece of software that can be easily pirated will seem less appealing to outside investors. Why would you invest in a company that has a product people do not pay for?
Research and development in computer software production plays a key role in pushing businesses forward and ultimately helping them to increase their levels of profitability. Helping companies to succeed helps economies to grow. We often overlook the work and risks software vendors undertake. Program updates can often seem insignificant but when you compare these updates to the versions of software we were using five or ten years ago, you may find yourself asking ‘how was it even possible for companies to operate productively? Take Photoshop for example, huge efforts have been made over the years to continually increase usability, flexibility and productivity of the software.
The US technology sector alone totalled 5.95 million jobs in 2012. If you then consider that these jobs on average, pay considerably more than most other sectors, it is clear to see how important these jobs are to an economy. These jobs create a ripple effect within an economy, and help to create and stimulate jobs in other industries such as business consultancy companies, right down to local shopkeepers.
It is often said that the key to the success of any business is maintaining high levels of efficiency and to do this it is vital that your company uses reliable, secure software. Pirated software can crash a business’ computer which could lead to the compromising of valuable and irreplaceable data. Lower levels of productivity will eventually impact a country’s level of GDP. The BSA study, Competitive Advantage: The Economic Impact of Properly licenced software estimated that for every pound invested in properly licenced software there was an ROI of £37 which, when it is compared to the £24 ROI that pirated software gains, this is a significant difference in the favor of the official software
It is often found that pirated software can come complete with viruses and malware. This can dramatically reduce organizational productivity within a business. Vital information such as bank accounts and company details can be leaked causing significant damage to a business. In 2011 Microsoft published the results of research they carried out on the safety of pirated software. They discovered that one in every four versions of pirated Microsoft operating systems contained some form of virus. It was often found that coding inside the operating systems was changed in such a way that made it undetectable by anti-virus software but it could still perform undesirable actions.
What may initially seem like an easy way for you to save money for small business may in the long cost your business and the economy dearly.
The above article was contributed on behalf of License Dashboard, a leading provider of software asset management solutions in the US.