Understanding the cost of software piracy in the aftermarket
In recent decades the aftermarket has come to rely upon the innovation and creativity of software companies to drive productivity and efficiency in businesses throughout the supply chain. But software piracy deprives software and data providers of tens of millions of dollars in revenue annually and drives up the cost of software for authorized users and licensees.
The most common form of piracy is shared login credentials and product duplication. The fastest growing threat is in commercial piracy, which includes cracking security measures on media-based product and repurposing disc-based products for commercial websites at little or no cost. One maker of CD_ROM repair information installed a line of code that required the disc to “call home.” They identified 14,000 illegal copies in 109 countries in less than six months.
Software makers aren’t the only ones harmed by piracy. Anyone using unauthorized software or data is obviously not covered by any warranty protection, ineligible for updates and bug fixes and has no access to customer support or technical documentation.
More onerous are the legal consequences of using pirated or unauthorized software. Software piracy is punishable in criminal proceedings with fines of up to $250,000 and jail time of up to five years. Businesses prosecuted for software piracy also risk the loss of business resulting from negative publicity.
Software companies in the aftermarket are preparing to take more aggressive measures in protecting their intellectual property. Countermeasures may include software cookies, security challenge questions and periodic forced password changes. But there are steps that every business can take to ensure they are not in violation of any software licenses.
- Review the software license and terms of use for all software and data products in your business. If the deal you got was “too good to be true” you may be dealing with pirated software
- Audit the security credentials of your authorized users. If you paid for three users and everyone in your shop is using the software, chances are you are in violation of the agreement and subject to legal consequences
- Make sure anyone trying to sell you a software or data product is an authorized distributor or representative of the company. You are the best defense against piracy and unauthorized copying.
The cost of software is higher than it needs to be because of software piracy and the expense of combatting it. Increased awareness and education about the cause and the consequences are the first steps the industry can take in reducing this wasteful expense. Software companies have tolerated enough piracy and will act aggressively to protect their IP. AAIA will continue to lead this discussion to reduce piracy and reduce the costs. To comment on this initiative write to [email protected].
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