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Why unlicensed software can cost you dearly

Gary Gan
27 February 2017 3 minute readShare
A key pointed towards a keyhole in the shape of a dollar sign

As an SME owner, ensuring that your business is software compliant isn’t always at the top of the list, and neither is doing regular audits on your business computers. But it could end up costing you dearly.

As all business owners know, it is vital to focus efforts on driving growth, hiring and balancing cash flow, and this will always take priority.

However, failing to ensure your business is software compliant is placing your business at risk – financially and to cyber attacks. So, how realistic is it that your business is not compliant?


A recent study from BSA | The Software Alliance found that 26 per cent of employees admitted installing unauthorised software on work computers, and of those 84 per cent acknowledged installing two or more unauthorised programs.

Given that SMEs generally have lower IT budgets, this normally goes unchecked and unnoticed.


A key pointed towards a keyhole in the shape of a dollar signFortunately, there are a number of red flags to look out for as an SME owner, which may indicate your business is not software compliant.

Certificate of authenticity

Genuine pieces of software typically come with a certificate of authenticity (COA), which certifies that the product is an authentic product of the vendor. If the product that you purchase doesn’t come with a COA, consider doing your own research into why this is. Perhaps the vendor doesn’t provide a COA, or you’ve unknowingly purchased unlicenced software.

A common way for unlicenced software to be sold is just by selling the product key, which the vast majority of vendors don’t do.

As a business owner/manager, it is impossible to oversee everything that happens on your employees’ computers. However, you are still responsible for it.



Different businesses will have different policies when it comes to their IT – some may allow employees to download/purchase software onto their computers, while others may require permission first.

Ensure you have a COA of all the software installed on business computers and if you don’t, consider where the software came from and whether or not it is being paid for.

Software isn’t free

As much as we’d love software to cost nothing, the fact of the matter is that it must be paid for. Software vendors typically sell their products through licensing and will need to be repurchased once the licenced has expired, this is to ensure that you’re getting the latest product features and security.

Take a look at the software that is installed on your business computers and consider when the last time they were paid for was, if at all. They should be paid on a regular basis – this might be several years, but recurring licence payments should still be taking place. If you have purchased the product on a one-off payment, it’s best to investigate whether or not this is a genuine product.

Having this unlicenced software on your computer can cause a great deal of issues for your business that can potentially hit your business hard. Unlicenced software can sometimes expose your computer to malware, with one in three pirated software programs exposing computers to malware, resulting in security issues, data loss and computer damage.

To repair the damage caused by malware can cost your business lots of money and precious time, which is likely to surpass the amount of purchasing software. Ensuring your software is licenced does not need to be a gruelling and confusing task – there are ways in which you can ensure it doesn’t steal hours of your time.

Invest in a Software Asset Management tool

An effective Software Asset Management (SAM) will help you to look after your software licences to ensure that everything is licenced. Incorporating SAM will also help businesses save money through identifying licences/software that aren’t used.

A recent study revealed that 96 per cent of organisations say that at least some of the software they’ve purchased is no longer used or required. A SAM tool will help businesses avoid keeping unused software, and ensure they are software compliant.

Gary Gan, BSA | The Software AllianceIt is critical SMEs dedicate the time to ensure they’re software compliant. The cost can be more than just a large licensing fee, but it also opens the business up to ever-evolving security threats.

By looking out for these red flags, SME owners can ensure they are licenced accordingly and allow them to focus on what is truly important, growing their businesses.

Gary Gan is the director of compliance, APAC for the BSA | The Software Alliance.

Why unlicensed software can cost you dearly
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Gary Gan

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