The ITAM Review

News, reviews and resources for worldwide ITAM, SAM and Licensing professionals.

BSA reports $60 billion worth of unlicensed software

BSA Survey

42% of end users are unaware of software or SAM policies within their organisation

This morning (24/06/2014) the Business Software Alliance (BSA) announced the results of their Global Software Survey.

Security threats is the number one reason NOT to use unlicensed software

The number one reason for not using unlicensed software was the security risks. Using unlicensed software leaves the organisation and its network under threat of being attacked by various viruses, malware, and spyware, Trojans and also leaves them open to hackers. If you install unlicensed software then no one will have any sympathy should your networked be hacked, or if you obtain a virus. It’s the organisations own fault.

Technically this is the number one reason for not using unlicensed software. However, The ITAM Review believes the overall (and somewhat obvious) reason for not using unlicensed software is the fact it’s illegal. There’s no two ways about it. If you use software that you haven’t paid for, or obtain a license in the legal way you are stealing.

Organisations are still using un-licensed software

Even though we’re in 2014 and the awareness of software asset management and software licensing is increasing, there are still over $60 billion worth of unlicensed software out there today according to the BSA survey. This is an increase of 1% from 2011. That is a lot of money that the vendors are losing out on, and that’s an awful lot of un-licensed software. Still, vendors are happy to audit customers rather than simplify their licensing models! Simply put, more education and awareness is required. 

There are two things that should happen off the back of this report. Number one is that the push for ITAM to be implemented in all organisations should pick up pace and become more aggressive. It has to happen, we need to see better statistics than these in the future..

Number two is the fact that auditors are going to be rubbing their hands together with glee at this report. Knowing that there are so many organisations with unlicensed software will surely result in even more audits and fines for those organisations stealing software.

Improvements in education and communication are clearly required

One of the most shocking and interesting stats to come out of the survey was the lack of awareness or knowledge by employees regarding their software licensing and SAM estate. The BSA states that 42% of end users are unaware of software or SAM policies within their organisation. 32% said they had some sort of understanding of what they should be doing, but there was nothing formal in place. Finally, 35% of workers knew and understood that the organisation they worked for had official, written software policies.

When you consider the high percentage of employees that have no idea if they have software policies in place, it’s no wonder that the amount of unlicensed software out there has increased. There needs to be greater internal education and awareness so that ALL employees know and understand what SAM processes and software policies they have so they can obtain a legal copy of any software that they require.

IT Managers on the other hand faired a bit better (and so they should!). 14% said they didn’t know of any processes or policies (this needs to be 0%), 51% said they knew of some polices and processes, but had informal knowledge of them. Finally, 35% knew of written processes and policies within their organisation.

Summary of the report

Software installed without a proper license: In 2011 the percentage of software installed without a license was 42%. It is now 43%. Worryingly, albeit at a small rate, the figure is growing.

Cost of unlicensed software: In 2013, installs of unlicensed software came to $62.7 billion globally.

Security Issues:  Risks for not using licensed software were of biggest concern. As the BSA states 64% of users cited unauthorized access by hackers as a top concern and 59% cited loss of data”.

Awareness: IT Managers appear to have some awareness and understanding of their software policies and SAM processes. However, employees aren’t aware of the processes or policies that their organisation has in place.

Region Unlicensed software % Unlicensed cost in billions ($)
Asia-Pacific 62% $21bn
Eastern & Central Europe 61% $5.3bn
Latin America 59% $8.4bn
Middle East & Africa 59% $4.3bn
North America 19% $10.9bn
Western Europe 29% $12.8bn

Conclusion

The report clearly highlights the fact that there is an awful lot more work to be done on ensuring organisations are using licensed software. It also highlights the fact that organisations are still not taking software licensing and software asset management seriously. The risks are there for all to see. Implementing an ITAM program is the way forward. Every organisation should have some form of process and policies in place to ensure they are staying compliant and they are using licensed software.

The matter of fact is a lot of them are still not addressing the SAM issue There is a lack of understanding within organisations about what they should be doing and how best to manage their software assets. There is also a lack of communication within organisations, as the reports state end users have very little understanding or idea of the processes around software.

Things need to change. We just hope that the next report highlights a reduction in unlicensed software and a better understanding from users and IT Managers of their software policies and processes.

You can find your regions results here.

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About David Foxen

David Foxen is a Software Asset Management expert and enthusiast. He had a vast experience of successfully implementing SAM, SAM tools and also made huge cost savings. A member of the ISO Standards WG21, David is a massive ITAM geek, so uses any opportunity to talk about the subject to who-ever will listen. He believes that the industry needs to share its knowledge and success stories to help the SAM industry mature and become more effective. Always willing to help, his primary goal is to make a difference to organisations and the SAM industry so everyone will know how epic SAM is!

5 Comments

  1. It is neither practical nor reasonable to expect employees to be up to date on software licensing. It is hard enough for SAM professionals to keep up with the constant changes.

    The only effective strategy for medium to large organizations is a combination of prevention and regular monitoring.

    We don’t try to teach employees about the latest viruses, trojans or adware, we deploy products that prevent it.

  2. David Foxen says:

    Hi Piaras,
    Thank you for your comment. However, it is possible to educate them so they have a much better understanding. I’ve hosted a number of internal licensing workshops, and provided end users with regular licensing updates (Microsoft and Adobe changes at the time). This made things a lot easier, and end users really appreciated being kept in the loop!

  3. Agree on your comments: “Improvements in education and communication are clearly required”. And this is a responsability mainly of Software Publishers. Having complicated Licensing metrics that are changing often does not help.

    What percentage of piracy can be caused by a) lack of education / changing T&Cs? b) willing piracy (those that just want beat the system and not pay)?

  4. The # 1 issue of unlicensed software being ‘security’ is not true from the perspective of corporate software.

    Sure, if you a teenager trying to download BattleField 4 it’s likely that someone is salting the zip file with a malware but if you’re a corporation that’s underlicensed by over-deploying/underpaying corporate software ( say Visio or Project) then the issue of ‘security’ is non-sequitor; you’re installing software directly from Microsoft.

    In general, if you’re STEALING software by getting from torrents or download sites, then you stand a good chance of having a security issue…. but that’s the actions of an individual at home… and not a reader of ITAMReview or Linkedin 😉

    When it comes to Volume License agreements; you are allowed to have unlicensed software in your corporation( up to 30 days for Select agreements and one year for EAs). Having ‘unlicensed’ quantities of software – under a VLA – is NOT illegal. But failing to pay for it – or participating in an audit to determine compliance – is a breach of a legal agreement that you signed.

  5. I agree with Steve’s comments. Furthermore, I would take this report by the BSA with a pinch of salt. I could not find a detailed split of the 22,000 users interviewed. Where these mainly business users (I doubt it) or home users?

    The BSA on their website states that it… “represents the leading software companies globally, acting on their behalf to protect their intellectual property rights, raise awareness of and reduce the installation of unlicensed and counterfeit software. We actively reward people for blowing the whistle on employers that install illegal software, with rewards of up to £10,000”. It has every interest in playing up the compliance problem.

    Whilst I agree that there is a problem, I have also seen software vendors using tactics to deliberately trick customers in to out of compliance situations.

    Let’s not feel too sorry for them. Martin Thompson recently posted an article about Attachmate’s audit heavy approach to extracting revenue from customers (Attachmate sue Mobistar for $6M). The rules of the software licensing game are currently written by the vendors. The BSA article portrays them as the helpless victims – an unrealistic portrayal if you ask me.

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