SMEs 'blind' to illegal software risks

Vendor-backed BSA has released a damning report, claiming small businesses are ignoring the risks of using unlicensed software

The UK's small businesses are blind to the risks of illegal software, and especially to the dangers posed by viruses, according to the Business Software Alliance.

According to a survey of 1,800 businesses across Europe, which was commissioned by the Business Software Alliance (BSA), 85 percent of SMEs do not realise they are at risk from viruses and nearly half, 41 percent, "mistakenly believe" there is no risk from unlicensed software.

While 97 percent of SMEs questioned are confident that their software is perfectly legal, the BSA argues that up to 27 percent of UK businesses are using unlicensed software.

UK member committee chair of the BSA, Ram Dhaliwal said: "It's clear from the research that directors of many British businesses just don't realise the risks of using illegal software. SMEs need to recognise that they could be susceptible to serious operational and IT risks, aside from the legal and financial consequences."

While the BSA is an independent organisation, it also has very close ties with software vendors — Microsoft in particular. For example, Dhaliwal is also the licensing programme manager for Microsoft UK.

The penalties for businesses that use unlicensed software are severe, according to the BSA. On average, SMEs across Europe faced fines of over £10,000 in 2006 when caught using unlicensed software, but it can be significantly more. One business, for example, was confronted with costs of over £90,000.

The vice chair of the BSA's members committee, Julie Strawson, denied that this approach of strident warnings and heavy fines might alienate SMEs. "We have to warn companies of the risks," she said. "After all, as the survey shows, 99 percent of SMEs did not consider that using old software was an issue."

Strawson said that, while various efforts by Microsoft and others to get small businesses to use Software Asset Management (SAM) software had been successful, the BSA would continue to strive to raise awareness of the issues. "This was a survey to find out what the perception was," Strawson told ZDNet UK, "and most people still do not see the problems they could have from using illegal software".

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