We have found that, more often than not, the published costs of a software piracy audit generally have very little to do with the actual financial impact of a non compliance (piracy) confrontation. In our training programs for software asset management and software & copyright compliance assurance we work through actual audit scenarios to show how multiple hidden costs can add up to as much as 3 to 6 times the published fine. What's more, in our experience, fewer than ten percent of copyright violation audits are ever even made public. Read on for more details.

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 to as much as $250,000 per copyright you violate. However, few are 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.

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 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...

In a "normal" audit scenario, you can expect to lose access to each system for as little as fifteen minutes--providing that your internal audit review team knows what it is doing. Unfortunately very few companies have trained internal review teams and those that do have teams generally have never actually conducted a high pressure audit. Again, do the math for the impact.

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 are not 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 wouldn't permit us to update the security on the “target's” computers.

Next you have the physical costs of the audit. These will include labor for your audit team; the price of an automated audit tool purchased at full price because you do not have negotiating leverage during an 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 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.

Little wonder that we estimate the actual costs of software piracy or copyright violation audits to exceed 3 to 6 times the published fine. There is more to all of this—much more. The key to eliminating or drastically reducing these costs—all of them—is to ensure that you have all of this 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 the same processes and procedures deliver ongoing savings of as much as 30% of the IT budget.

Want more? Let us know and we'll continue the flow.