Monday, April 09, 2007

Startups and Small Companies Exempt from Buying Software?

I was at a CFO conference last month and had an interesting discussion with another attendee over lunch one day.

This attendee (we'll call him Jeb) is the CFO of a small firm in California. This is not his first time at being a CFO and is an intelligent, articulate gentleman who endorses an entrepreneurial spirit within his company.

The conversation started out the usual way with him asking what my firm does (Software Asset Management-SAM) and then asking a variety of questions about how SAM benefits companies. The conversation then turned towards compliance and he shared that a former company had been audited by the Business Software Alliance (BSA) right before he had gone to work for them and had been fined due to inappropriate use of software licenses. He described some of the financial and operational pain the company had experienced as a result of not being properly licensed.

Finally, the conversation turned to the financial impact of outfitting an organization with software licenses. Being a business owner myself, I could definitely commiserate with Jeb over the costs to properly outfit an organization. However; I was amazed to hear him share his viewpoint that start ups and small businesses shouldn't be expected to license every computer.

Frankly, I was blown away. Here was an intelligent, financial professional stating that companies should be allowed to break the law, steal intellectual property, and essentially mis-state their financial earnings (when you realize that they wouldn't be including a major cost to doing business...buying software).

Desperately trying to stay off of my soap box, I raised these issues with Jeb. I tried every logical argument to try to have him understand how integrally unethical his viewpoint is...I hope I at least gave him something to think about. Unfortunately, he's not alone in his viewpoint...can someone please explain to me how you can morally or ethically justify software piracy?

Weeks later and it still amazes me...


Anonymous said...


All I can say is wow and watch out! I am a former "software policeman" that was involved in dozens of software piracy raids with the SPA (currently the SIIA), BSA, Microsoft, Autodesk, and other major software publishers. And MOST of the compaines that we visited were small to medium sized startups (below 200 systems). Seemed like fast growing startups often failed to control software and as a result paid large fines for that inaction.

My advice to any startup is make it a core business practice from the beginning to control software licensing, it's does not take much if you start at the beginning and it will reap many dividends over the years as you grow. I can even site one instance when the purchase of a relativitly new company was derailed becuase the were found to have "unlicensed" software on their systems.

I remain amazed at the CFO's remarks.


Alun Jones said...

Why not simply thank him for his viewpoint, and then ask him to return the favour to your small company, by providing services free of charge. And oh, by the way, would he mind if you told several other small companies that they could use his business' product or services free of charge as well?