Is your company’s software legit?

Simon Campbell-Young, CEO of Phoenix Distribution. (Image source: Phoenix Distribution)

The use of business software, in any sector, has become an integral part of an organisation’s ability to perform tasks with a greater degree of efficiency, accuracy and ease. In fact, the most successful companies in every industry build their business processes around the functionality found in today’s software programs based on best-practice methodologies, industry standards and regulatory compliance.

Simon Campbell-Young, CEO of Phoenix Distribution. (Image source: Phoenix Distribution)
Simon Campbell-Young, CEO of Phoenix Distribution. (Image source: Phoenix Distribution)

However, many companies in South Africa still use illegal copies of software, be it at user or network administration level, not realising the full implications of copyright infringements when financially benefiting from pirated software.

Software piracy can generally be described as the unauthorised duplication, distribution and use of copyrighted software programs either for personal or commercial use, and let’s face it, today it’s as easy as “copy and paste”. The most common form of software piracy in organisations is referred to as “softlifting”, when a business purchases a copy of a software program with a single user licence, which is then loaded onto multiple computers by employees with or without consent.

Some companies justify their use of pirated software by saying that the cost of the software is simply too high for its intended use, or that once the company has grown it will be more open to the idea of registering legal copies of the software. Others feel that their companies are simply not big enough to face viable prosecution and with the lack of enforcement of copyright infringement laws they are unlikely to get caught.

But while copying software seems harmless it is essentially theft of intellectual property and employers are liable for the actions of their employees. It is in fact a serious crime and could spell dire financial and reputational risks to organisations if they are exposed by disgruntled employees or are audited and do not comply with copyright laws.

On the flip side of the coin, software piracy is destroying the very industry it is benefiting from. In fact, it is the worst problem facing software development today. An entire ecosystem of software development organisations relies on the legitimate sale of software products. Using pirated software not only dilutes the industry, but reduces job opportunities for developers, the future longevity of these products and the cost to consumers who obtain the software legally.

According to the 2013 Global Information Technology Report recently conducted by the World Economic Forum (WEF), South Africa ranks 20th (35%) out of 144 countries for lowest software piracy rate. Based on findings by BSA / The Software Alliance conducted in late 2012, the WEF states that a 10% decrease of software piracy in South Africa over four years would create 1 650 high-tech jobs, R9 091 million in new economic activity, and R967 million in new taxes by 2013. Importantly, 68 percent of those benefits were expected to be confined to the South African economy.

So how can organisations protect themselves from unknowingly benefiting from pirated software and contribute to the sustainability of the commercial software development industry?

Here is a check-list to ensure that your company is complying with copyright legislation:

·         Assess your software supply chain. Organisations should align themselves with reputable dealers, be it via physical retail stores or from a website, that only sell legitimate software and are painfully aware of the risks of selling or distributing software that contravenes the end-user licence agreements (EULAs).

·         Do your homework. An EULA stipulates the terms and conditions regarding the use of the software, and if it can be legally copied onto other computers or not. IT departments should be made aware if there is more than one copy of software installed in the organisation and check if it complies with copyright laws as stipulated by the content owner.

·         Register your software. Almost all software installations today require organisations to register and activate the software via an Internet connection or by phone, which allows them to use and have timeous access to updates, security patches and technical support. It also prevents individuals from installing the software onto other computers.

·         Educate employees on the implications of software piracy. Software piracy equates to stealing and is an unethical business practice that can result in civil and criminal penalties.

·         Enforce network policies. Organisations should have network policies in place which restrict access to peer-to-peer file sharing networks that allow anyone to download pirated copies of software, music or movies. This also reduces the risks of falling prey to embedded identify theft tools and computer viruses that accompany some pirated software.

Simon Campbell-Young, CEO of Phoenix Distribution