Software piracy a real problem: Monactive Ltd. (IT News).

The problem of software piracy is a unique phenomenon in the business world, being classed by the culprit more as a variation of tax evasion, than outright stealing. Moreover, the 'thieves' are in a general way amongst the most honest class of individuals in society. Also the perpetrators are legion, making the chances of being caught relatively remote. There is also, moreover, concensus opinion that having paid/or a particular package, what the owner does subsquently with the software is no real business of the original supplier. The purchasers behaviour reverts to that of the client of an insurance company, whose objective is to exploit the terms of an insurance policy to the maximum..........The Editor

Software piracy is not a new phenomenon, but has suddenly rocketed to our attention as software houses report losing thousands of pounds through illegal trading of counterfeit or 'cracked' software. Almost as soon as software vendors began shipping software for the personal computer, back in the early 1980s, curious programmers sought to find ways round the copy protection mechanisms. Simultaneously professional counterfeiters began working on an industrial scale, churning out hundreds of thousands of illegal clones of well-known software packages that in many cases went undetected.

However, whilst the principles of software piracy remain largely static, the nature of the piracy industry, and the methods and technologies involved, have changed dramatically over the last two decades. For as long as we've had personal computers, piracy has been a problem. But only over the past fifteen years, the last five in particular, have businesses begun to take it really seriously.

Back in 1997, Wired magazine reported how a running scoreboard on the web site of global anti-software theft trading body, the British Software Alliance (BSA), charted the industry's losses to piracy: $482 a second, $28,900 a minute, $1.7 million an hour; and so on.

And just last year analysts claimed that software piracy was costing American software companies more than $12 billion in lost revenue annually. So it's not difficult to appreciate the incentive for software vendors to take action. From a business perspective, the first significant change took place in the early 80s, when the software industry realised that its applications were not covered by any copyright law, leaving itself wide open to financial losses. In response to this discovery a number of vendors joined forces; they setup the Federation Against Software Theft (FAST) in 1984, with government support, and began lobbying parliament to create a bill.

Paul Brennan, Legal Counsel for FAST, says: "Due to the sustained efforts of FAST, the government passed the Copyright, Designs and Patent Act in 1989. From that point forward it became illegal to copy and distribute licensed software without permission."

This was an Act that had a significant impact on those companies who were buying and using well-known software packages, as suddenly they could be prosecuted for possessing unlicensed software programs, unwittingly or otherwise. Directors face a hefty fine, and possibly even a jail term if convicted. For this reason most companies now have codes of conduct in place to combat corporate piracy, and anyone caught breaching this code faces disciplinary action. Of late a number of high-profile cases of software piracy have come to light. Most recently financial and debt management firm Baines and Ernst was forced to pay an undisclosed five figure sum to the BSA, having been found with unlicensed Microsoft Office 97 software. With FAST receiving more that 400 complaints of corporate abuse per year, often by employees now protected by the Whistle Blowers Act, enterprises are being forced to take the issue very seriously indeed. It's not just expensive; it's bad PR. More often than not companies are not deliberately flouting the law. Usually they simply do not have adequate software asset management policies in place, perhaps no central purchasing mechanism, and are not in full control of their software licenses. A software system dxPROTM, allows companies to build up a complete picture of software usage inside their organisations, including whether the company is under or over licensed, and whether it has a problem internally with pirated software. It does this by putting software agents on individual machines, to collect usage information each time a software application is run and this is reported back to a central console. On deploying dxPRO to a large county council, it was found that in spite of the council's rigorous controls on software build, over 3000 unauthorised applications were running on the local network. Typically these were executables that staff had downloaded from the Internet, or introduced to the network from CDs they have brought in from home.

The worst-case scenario in some organisations could be that certain members of staff are running a child pornography ring from work without your knowledge. It doesn't take much imagination to realise the ramifications of such a discovery, with the police having the power to seize all a company's servers for further investigation. Effectively they could close a business down for good. Over the last 20 years we've also seen step changes in the methods used by pirates to create and distribute illegal copies of software programs.

The car boot trend which took off in the late 1980s provided an ideal outlet for pirates in the UK, selling their wares from the boot of a battered Ford van away from the watchful eye of the 'software police'. At this time there were around eight or nine piracy organisations in Britain, but these groups were highly specialised and focused on their own areas. Reflecting the different media formats around at that time for illegal content, there were separate pirate organisations for film, music and software.

However, as technologies have begun to converge, and vendors have consequently found themselves able to put all types of content on the same media format (the CD and soon the DVD), similarly seizures are revealing that pirates are dealing in film, music and software. Enforcement agencies such as FAST, traditionally grouped by industry. are now appreciating the need for co-operation, information exchange and best practice. The challenge is for policing organisations to get together in a big way, both nationally and internationally. 'If pirates are consolidating, then enforcement agencies need to do the same. It is pointless for several different agencies to pursue the same pirate." Technology has had a huge impact on software piracy levels, now down to 26 per cent in the UK, reports the BSA, thanks to the work of anti-piracy organisations and government With the advent of the CD burner, and the explosion in popularity of the Internet, it has become all too easy today for people to make copies of popular softwa re, like Microsoft Office, in their own front rooms. Other industries face similar copyright problems of course. For example the music business has been battling for some time to get to grips with the challenges posed by peer-to-peer file sharing technologies like Napster and Gnutella, and compression technologies like MP3, which allow music fans to download music tracks from the Internet and swap them between their PCs. Today you can still find software pirates skulking at the car boot sales. But they are more likely to hand you a business card with a web address printed on it than to dive into their four-wheel mobile stock room in search of Compact Discs.

The thousands of so-called Iwarez', 'cracker' or badland' sites on the Internet are selling all kinds of pirated goods; everything from lines of code that allow you to bypass the registration mechanism for the latest version of Macromedia Fireworks, to online conveyor belts for pirated video cassettes. And just as pornography on the net persuaded law enforcement agencies to get connected and gain a good understanding of Internet technologies, so the migration of software pirates onto the web over the past five or ten years has dragged enforcement agencies, including Customs and Excise who miss out on VAT revenues when software is distributed illegally, onto the net.

The good news, from the vendor perspective, is that delays in rolling out broadband Internet access across the UK is giving them and the enforcement agencies time to prepare their strategies for dealing with copyright infringement. Microsoft unsurprisingly is leading the field in this area, with its newly-developed activation code that can be collected by the purchaser online and permits only a limited number of copies to be made of the purchased software. However, software technical protection measures are never 100 per cent effective, and are usually combined with an enforcement program to take action against those breaking codes. Typically 'activation' is aimed at the retail user, whilst corporates have enterprise agreements with large software vendors to put the correct number of licenses in place. In addition many software houses are using regular product upgrades and value-added services as an incentive for users to stay the right side of the law.

With the BSA now offering rewards for employees prepared to 'grass' on their employers, the writing is very much on the wall for those who still don't know who is using their software applications, and for what. Where employees are circumventing technical protection, turning a blind eye can lead to criminal prosecution against senior management or company directors themselves, therefore a central software asset management policy is imperative, as is a tool capable of monitoring usage on a daily basis.

And with cross-industry enforcement agencies banding together to combat computer crime on the net, software pirates are going to have to work much harder to make money Out of flouting the system. Whether you're a software pirate, or a corporate with poorly administered software licenses, your chances of getting caught out have now gone up several fold, and, with the work going on right now behind the scenes, probably in the time it has taken you to read this article.

www.monactive.com