Software Piracy is a Bigger Problem Than Many People Realize
by Ken Wasch, Executive Director, Software Publishers Association
Many universities, businesses, and other institutions don’t think software piracy is a serious problem, but their organization is at risk every time an employee makes an unauthorized copy of software. Pirating software has become so widespread, with the software industry losing $2 billion annually in the United States, that the industry is fighting back.
The unique dilemma that software piracy poses for information managers is that copying software is so easy to do and so difficult to control. In fact, the software industry is the only industry in the world that empowers every customer to become a manufacturing subsidiary. Every computer user has all the equipment necessary to make a perfect copy of a software product. The challenge is to convince users that just because they can make a copy doesn’t mean that the law permits them to do so.
Many users are often confused about what is expected of them when it comes to software use, and many companies do not articulate a clear software policy. But one thing is clear. Federal law states that it is illegal to make unauthorized copies of software except for archival or back-up purposes. Organizations and individuals who have pirated software can be liable for as much as $100,000 for every instance of software copyright violation.
Piracy in Higher Education
Educational institutions have unique software needs. There are four distinct types of users on most campuses: students, faculty, administration, and classroom/ lab facilities. While campus administration is no different in software usage from its commercial counterpart, the other three groups have special needs.
It is no surprise to find that many students who have personal computers at school pirate the software that they use. They argue that the high cost of software prevents them from buying it. However, most major software vendors have educational discounts or special education versions that make software more affordable for students.
Most institutions have training and classroom facilities to teach users how to use major applications. While training facilities create new users and ultimately expand demand for software, these facilities need a license for each machine that will be used in the classroom.
Finally, faculty members often use a variety of applications in research. The copyright laws apply equally to profit and not-for-profit uses of software applications, and just because the software is educational doesn’t mean copying it without a license is legal. Many faculty members are particularly sensitive to the issue of intellectual property protection, since they frequently seek protection for their own works.
The Cost of Software Piracy
Software piracy’s negative impact is more far-reaching than most people realize. In addition to the $2 billion lost annually as a result of domestic piracy, international piracy costs the software industry between $4 billion and $5 billion each year in lost revenues. In fact, an entire computer platform has been lost to software piracy. In 1985, the Atari ST became so identified as a pirate’s machine that software developers refused to write programs for it. The ST has all but disappeared from the market, and the consumer has lost a low-priced computing option.
An often-overlooked cost of piracy is the cost to the user. When users copy software, they miss out on many of the valuable benefits of purchasing authorized software. These include a variety of user manuals and tutorials, customer telephone support, and notification of and information about upgrades. Services like these are crucial to the value of the software product.
Perhaps the highest cost of software piracy, and ultimately one that we all will pay, is the cost to the U.S. economy. Over the past 10 years, the U.S. software industry has become an important national resource. Approximately 80 percent of the software used in the world today is developed in the U.S. But the more software piracy occurs, the more this hampers our competitiveness in foreign trade, as well as in researching and fielding future products.
Legal Implications
Piracy lawsuits and audits are causing organizations to give more serious thought to their software practices. The best way to protect your university is to educate students, faculty, and other employees, strongly enforce anti-piracy programs, and conduct periodic audits.
Policies regarding software use also need to be part of the student orientation program, as well as part of faculty and employee training.
Software publishers are wrestling with the problem of how to properly license software for a network so that end users can stay legal with relative ease. Currently, software can be licensed to a network in three different ways. Software may be licensed to a machine, to an individual, or to concurrent use.
But because network license agreements vary from publisher to publisher, managers should check with the publisher of the software they use whenever a question arises regarding proper network use. The important thing to remember is that, since the university will ultimately be held responsible for any copyright violations, it must be sure that faculty, staff, and students understand how to use their own network software legally.
Ultimately, software piracy is a managerial problem that every campus with personal computers must address. Everyone struggles with the problem, but managers who ignore this issue may find themselves unwillingly implicated in software piracy, and subject to the legal system.
