We have found that, in as many as 90%+ of copyright non compliance settlement announcements, the published costs of a software piracy audit generally have
very little to do with the actual financial impact of the non
compliance (piracy) confrontation. In our training programs for
software asset management and software & copyright compliance
assurance we work through the actual audit scenarios to show how multiple
hidden costs can add up to as much as 3 to 6 times--sometimes even more--the published
fine.
What's more, in our experience, fewer than ten percent of actual copyright violation audits are ever even made public. The end result?
The true economic impact of these predatory copyright violations & piracy audits has been hidden from the public eye for decades.
Read on for
more details on how you can build a low cost foundation for reducing your risk of a software audit while increasing the delivered business value of your entire technology portfolio.
When your company is confronted by a
software publisher, copyright holder, or one of their multitude of
litigation friends, you are in for a very expensive ride. Most of you
may realize that you will be the focal point for copyright violation
fines that can reach from $750 (if you are incredibly lucky) to as much as $500,000 per copyright
you violate. However, very few average business people are genuinely aware of all the other cunningly hidden
costs that go along with the fines.
Here is an enormous key to the
enforcement industry tactics: They purposely pressure you to settle
quickly—frequently denying you the use of your computers as added
incentive to pay up without fighting back. This time constraint will--not might: WILL--ensure that your audit will be reactive in nature and you'll pay substantially more just to make them go away. (By the way...They won't go away.)
The enforcement auditors can shut you down: In many cases, your company could lose
access to its computers for a period extending from a couple hours to
multiple days--depending on how the audit relationship progresses. In
the next-to-worse case scenario the copyright holder has the right to deny
use of the systems until the audit is completed. Calculate how much
each hour of down time will cost you...
Worst Case Scenario: In some copyright-related audits, computers from the target company have actually been confiscated by law enforcement officials and held as "evidence" until the case is settled. What would it cost if you lost your primary server - along with all the backup materials?
Don't touch that computer: In a "normal"
audit scenario, you can expect to lose access to each system for anywhere from fifteen minutes to two hours--providing that your internal audit review
team knows what it is doing. Unfortunately, very few companies have
a trained internal review team and those that might maintain a team have generally never actually conducted a high pressure non compliance enforcement audit. Again, do the
math for the financial impact.
Don't change anything: Another issue you will encounter is that
the auditing entity has the right to prevent you from making any
changes to your systems. The impact of this is that, again—in
general—you may not be permitted to install updates, patches, fixes,
new software—even new anti virus signatures, until the auditors give
you permission to do so. Picture the scenario we once went through
when a major Trojan hit the Internet and an enforcement group conveniently took it's own sweet time permitting us to update the security on the “target's”
computers.
You'll pay for that audit: Next you have the physical costs of
the audit. These will include labor for your audit team; the costs of
an automated audit tool purchased at full price (because you do not
have negotiating leverage during an enforcement audit); the prices of retrieving
critical records & documentation from secure storage; the price
to review and organize all documentation for submission to the
auditing entity; the extended prices for all products you can't prove that you legally possess; the damage to your company and personal reputation
due to the non compliance event; and the cost of all the legal
hand-holding you will require across the life cycle of the piracy
audit -- and into the next several years.
Little wonder that we estimate that the
actual costs of software piracy or copyright violation audits exceed 3 to 6 times the published fine. There is more to all of
this—much more. The best method for eliminating or drastically reducing
these costs—all of them—is to ensure that you have all of this
compliance assurance information and infrastructure in place and up to date BEFORE the auditors come
calling.
The secret is that proactive software asset management and
technology portfolio management can—and do—provide you with
dynamic risk reductions at the same time they reduce your ongoing costs. In other words, you'll also use these processes and
procedures to deliver ongoing savings of as much as 30% of the IT
budget.
Recap: The first key issue you need to keep in mind is that, if you do not proactively manage the entire technology portfolio, the copyright enforcement players--software publisher auditors and non compliance enforcement groups--have the legal right to come into your business and literally force you to do so. And--they can keep coming back until you get your act together.
The second key issue is that every step you take to ensure you are compliant with copyright or software licensing terms and conditions is also a step you take to ultimately reduce the costs of the entire technology portfolio. But, when accomplished proactively, this process will cost you next to nothing and return as much as $5 for every $1 you invest.
Want more? Let us know and we'll
continue the flow.
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