“We’re not doing that software subscription stuff.” That’s a statement our industry used to hear often back in the early days of the cloud and Microsoft Office 365 – and the statement was understandable. Business owners had invested thousands of dollars in their desktop software and had grown accustomed to keeping the master CDs in the comfy confines of their office.

But, then a problem arose. The same business owners still didn’t want to do “that software subscription stuff” when their Office versions became obsolete. The concept of the cloud and Microsoft Office 365 was so different from what they’d grown used to they had a very difficult time believing it was actually a better, more secure, and less expensive way to purchase their Office software. In their minds, a subscription was the way to save money on magazines, not software.

And back then, they still had an alternative. Microsoft still offered Office software the old-fashioned way so anyone could purchase it through a reseller like Dell, HP, or IBM. As time passed, most businesses eventually realized the advantages of subscription software and began purchasing Office 365 and trusting the concept of the cloud.

But, like anything, some just couldn’t make that leap and insisted on living in the past. It’s this mistrust and stubbornness that caused software piracy to blossom and thousands of small and mid-sized companies to learn a hard lesson about trying to save a buck.

Your OEM Software Is Non-Transferable

Have you ever purchased a computer for your office from a big box store? A few months ago we published an article on this blog titled “7 Critical Tips for Buying the Right Computer for Business Use” because too many people were purchasing original equipment manufactured for sale at these stores thinking they were saving some money. What these individuals were learning the hard way, though, is when they got these workstations back to the office none of the software was compatible with the business productivity software on the rest of their network. This led to much confusion, frustration, and extra expenses.

Things are similar when it comes to the software itself. When a computer is purchased, the software on it must live and die with that computer. But, in hopes of saving money and “sticking it to the cloud” some business owners copy the software from a computer currently in use and install it on the rest of their workstations. That’s called software piracy, and it’s illegal.

“We’ll Never Get Caught”

These business owners don’t worry about the ramifications of getting caught pirating software because they believe they can never get caught. They read the stories of software companies busting piracy rings involving illegal copying of software quantities in the thousands for resale, and think that’s the kind of pirate huge software companies seek; not small to medium businesses. What they’re not considering is disgruntled employees love to get revenge on former employers, and the vast majority of companies caught are turned in by former employees. Also, vendors or the competition could turn them in should they discover a company is guilty of software piracy.

In fact, as an IT support firm, Matrixforce is REQUIRED by law to report any company we find using pirated software. Fortunately, we’ve never in almost 40 years of doing business had to do this; and the main reason is we properly educate our customers. On the flip-side, if we found a firm guilty of software piracy and didn’t notify the authorities, or assisted in transferring software illegally, we’d lose our license to do business. This is because we, as a Microsoft Partner, are required to sign non-piracy documents stating we’ll never knowingly allow a customer to copy software to other computers, and as mentioned, will notify the authorities if we discover software piracy.

If you’re wondering what happens to your company when caught committing software piracy, you won’t like the answer. The police will come calling, and once they verify piracy they make an example of you by publicizing what you’ve done. You will also be required to pay for all the software you should have purchased if you were running your business legally, and that can be an extremely expensive fine. Microsoft is also a member of a prominent software trade group called BSA The Software Alliance, whose members also include Adobe, Oracle, Autodesk and other global heavy-hitters. These companies are serious about stopping software piracy and levy hefty fines on firms found using pirated software.

It’s Just Not Worth The Risk

In recent years the BSA has targeted small and mid-sized businesses because of their limited technology and legal resources. The owner of a U.S.-based software development company with fewer than 100 employees reported a recent incident with the BSA: About four years ago, soon after employees left the company, his company received an official notice from a lawyer representing Microsoft. The notice claimed they were pirating software, namely Microsoft Office applications and operating systems. When informed of the audit, this company ran the audit software provided by BSA, which checked all the software in use for member companies. The BSA issued a demand that included a penalty in excess of $200,000. The company offered to remove the offending software but were told that it did not matter, as they were liable for all software instances recorded in the audit. “They just kept hounding us, retaining four different lawyers in the space of two years,” said the owner of the small software company. The company eventually reached a settlement with the BSA, but their court costs exceeded the amount of the original penalty of $200,000.

The company also had to go through the embarrassment of the police showing up asking every employee to step away from their computer, the local news reporting about the incident, the loss of productivity while every system they owned was scrutinized, and the damage to their reputation their piracy had caused. When you add up all the lost revenue, legal costs, customer loss, and the difficulty of acquiring new customers who didn’t want to do business with a company that had broken piracy laws, this firm barely survived.

The Moral Of The Story

The takeaways from this story are simple: Don’t be a pirate. Don’t be so much of a penny-pincher you’re willing to break the law, because at some point you will be caught and it will be very painful. If your business is small, it likely won’t survive because of fines, legal fees, and damaged reputation. Don’t blindly trust that your IT person knows what they’re doing when they may be pirating software to other company computers to save you money and make themselves look like rock stars. They may be the very persons who eventually put you out of business.

Do be a smart business owner and utilize the services of vetted IT managed service providers like Matrixforce to avoid these disasters because we know the law, and we’ll educate you and your employees about the dangers of copying software. We’ll also get your business set up with the proper Office 365 software (yes, subscription software) to keep you legal and save you money. With Office 365, your users automatically get updates as new features are released as well as the latest security features to protect your company and customers from data breach and other cyber threats; all of which a pirated version of Office would never receive.

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