Last summer Manser Associates was fined £5,000 for using illegal software, and already this year another London-based practice, Paul Brookes, has had to pay a fine for the same offence. Both firms were punished by the Business Software Alliance (BSA), a global software trade body which represents leading software developers including Autodesk, Apple, Bentley Systems, Lotus and Microsoft.
The BSA has far-reaching powers to punish companies found guilty of using illegal software, including taking court action that can result in two-year prison sentences. More often, the organisation reaches a settlement with the company which includes a fine equalling the value of the illegal software. Anyone who is using software without a licence can be punished.
The BSA's campaign manager Mike Newton says: 'We don't think people are fundamentally dishonest. They just don't give enough time and attention to managing their software assets. There is often not one single person in the business who sees it as their job to manage IT.There can be hundreds of thousands of pounds of software that is not being managed from an asset point of view.'
For example, when a new person joins the company, software might just be copied directly from one PC on to another to enable the new recruit to get on with their work. If the firm does not have a licence for this extra user, it is infringing the software agreement.
'Architects depend on their computers more than many other professions, ' says Newton. 'The software they use is often the tool of their trade and software investment per head is greater than other businesses, so they should be putting more attention into managing the whole thing than other professions.'
The BSA's figures indicate that 29 per cent of the software in use in the UK is illegal, but among small businesses that figure is nearer 50 per cent.Some firms knowingly use pirated or illegal software, but many may be doing it unintentionally through bad management.
'We encourage firms to have a single person in the organisation who is responsible for buying software, ' says Newton.'With the Budget this year you can get 100 per cent capital allowance on computer equipment in the first year.We don't want people to miss that opportunity, but they must have one central point of control. People might fight against that, but it will stop you ending up in court.
'Keep an asset register and a physical record of all the software licences you have so that you can compare the asset register with the licences. It's not rocket science, it's just basic controls, but companies who are not doing that are taking a serious risk.'
Newton suggests: 'Go round and find out exactly what software you've got on all your machines and if people are using any of the software at home. Find out if people need the software they have got installed on their computers and, if so, have you got the licence for it?'
Widespread use of the Internet could cause additional problems. According to the BSA there are three million sites on the Web where illegal software can be obtained and downloaded, so managers must make sure their employees know what they can and can't download. Newton suggests making it a condition of employees' contracts that they cannot download anything from the Internet without authority.
'You can buy legitimate software on the Web, but it should be very obvious if you are getting it from one of the manufacturers' sites or from an illegal one, ' he says. 'If you are downloading from the Web and there is no licence document, and the price seems too good to be true, then it probably is.'
The BSA's ow n website at www.bsa.org/uk contains a downloadable guide that sets out the steps a company should take, for example sitting down with every person to find out what software they need, what they have on their PC in the office and at home, and then checking that against the relevant software licences.
'You're talking about two or three mandays of effort and you've sorted yourself out, 'says Newton.'Then you need to sort out some processes. The tools are there for you to be able to take action. You don't need to spend thousands of pounds on consultants sorting it out for you.'
As well as offering advice, the BSA's hotline (0800 510510) also offers up to £5,000 to individuals who supply information about companies that are using software illegally. 'There's nothing wrong with that, ' says Newton. 'If another firm can underbid you because their business overheads aren't so high they're stealing work from under your nose. If you give us the facts and information we'll take action.'
HOW NOT TO BREAK THE LAW
The BSA recommends that businesses take the following steps:
Check your records to ensure the number of software products you are using can be reconciled with the number of user licences you have purchased
If necessary, register all those products for which you have licences to ensure no software publisher can regard you as a potential illegal user
Contact the BSA hotline on 0800 510 510 for free advice
Visit BSA's website on www.bsa.org/uk and download a free copy of the Guide to Software Management
Conduct a regular software audit and make it a permanent fixture in the administration of your IT.