Beware, your unpaid licence fees will find you out - and when they
do you will have to pay dearly for them
In February Baines & Ernst Financial Management, a debt
management company, settled out of court with the Business Software
Alliance (BSA) for the use of unlicensed Microsoft software, writes
Ross Bentley.
BSA, a watchdog group representing the world's biggest software
manufacturers, began proceedings against the company last autumn.
As part of the settlement, Baines & Ernst, a leading debt
management company, is to pay the BSA a substantial, five-figure
sum.
Charles Howson, chief executive at Baines & Ernst, says that
the company lost track of its software licences because of the
extraordinary growth it was experiencing. "We are the fastest
growing company in the north west," says Howson. "Five years ago we
had half a dozen employees, now we have 500. Obviously with this
level of growth we were very busy and our primary concern was
dealing with enquiries and customer service."
With demands on the business escalating, administration problems
and software usage policies were overlooked.
"Our software problems came from having MS Office loaded on PCs
used by our call centre staff - they didn't use the packages but we
still had them and the licences became outdated unbeknown to us. We
didn't have the right processes in place to track them," Howson
says.
"Also some of our staff were downloading software off the Internet
and passing discs around among colleagues. It was difficult for our
managers to ensure that all the staff were playing by the
rules."
Howson thinks that a former employee contacted the BSA to take
advantage of the £10,000 reward offered to anyone alerting the
organisation of software licence abuse."But we were slow in
responding to the BSA's initial approach in early January 2001,"
says Howson. "I didn't come on board until March. By that time the
BSA has issued court proceedings."
Eventually an out-of-court settlement was negotiated. The company
also had to delete the software it was using and buy up-to-date
copies at an additional cost of more than £35,000.
"If we had gone to the BSA earlier and held our hands up to about
30 pieces of unlicensed software perhaps we would have got away
with paying the extra rather than the fine," says Howson.
"But we had over 100 unpaid licences. I can see why we were fined -
I can see they have a job to do. You should expect to pay for a job
or service you use. It's a supplier's market - if you want to use
the software you have to pay the price. We rely heavily on IT. We
have 50,000 clients, which means a huge amount of
transactions."
Howson says he has now appointed several senior managers to ensure
that the company does not fall short of the licensing rules again.
One is an IT manager who has previous experience of the BSA and has
gone through the process of gaining BSA accreditation in the past.
"We are going to work towards that," he says.
"From now on we will ensure that all licences are administered
properly and that all the systems are in place. It needs to be
given as much importance as any part of the business."
But does he think that the company has suffered a blow to its
reputation? "Not really," he says.
"Rather, the whole episode has taught us a lesson. We are a large,
reputable company that just made a mistake. In some ways, you could
say that the incident has strengthened the company's reputation in
that we have shown we were prepared to do the right thing."