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Small firms could be risking fines by using unlicensed software

web_Sarah_coombes

Sarah Coombes is Managing Director, Anti-Piracy EMEA, at BSA The Software Alliance

Earlier this year, an East Midlands boat manufacturer was forced to pay out more than £20,000 for using unlicensed copies of BSA member software.

An engineering company from Scotland paid nearly £30,000 for the same reason. Both companies were liable, despite not knowing the software was even installed on their computer systems. 

A lack of knowledge about software licensing means that incidents such as this are common. According to our most recent figures, SMEs paid over £900,000 in legalisation costs and damages for software copyright infringement in 2016. One business paid £84,300 in damages and legalisation fees, highlighting the damaging financial consequences of not managing your software licences effectively.


Most businesses use unlicensed software unintentionally. For example, if your employees download software from a peer-to-peer sharing site or online discount store, the licence is not valid and is therefore being used illegally. 

Unlicensed software can cause cyber security headaches too, especially for SMEs, which may have weaker security measures in place. A study by IDC identified a direct correlation between unlicensed software and malware, meaning that you could be putting your SME at risk of a data breach. 

Research conducted last year found that 82 per cent of SME workers would report their boss for illegal or unethical practices in the workplace, with over a third saying they’d shop them for nefarious IT practices. This rings true, given that BSA saw a 58 per cent rise in whistleblowing reports in 2015, where people anonymously filed reports about businesses using unlicensed software.


The same survey found that only 7 per cent of employees would file a report for the financial rewards offered, while 42 per cent felt it was their moral obligation. With SME workers so willing to blow the whistle on bad practice, it’s really not worth taking the risk.
Keeping control of your licences needn’t be complicated or expensive. Here are some simple steps you can take:

  • Deploy effective software asset management, such as making regular inventories of what is installed and used.
  • Manage staff downloads: approximately 20 per cent of unlicensed software in enterprises globally is triggered by employees. 
  • Take stock while growing: a BSA survey found 39 per cent of businesses allocate additional PCs and software to employees before paying for further licences. Keep track of what you buy, and for who.
  • Keep it legal: only buy from trusted vendors; don’t be sucked in by offers that are too good to be true.
  • Keep top management involved: this is no longer an IT-department-only issue.
  • Always ask for help: the BSA or software vendors will be happy to assist you.

Managing software licensing may not be at the top of your IT to-do list, but taking some small steps to ensure you are fully compliant can help ensure the safe future of your business.