How Can Software Asset Management (SAM) Help Businesses and, In Turn, the Economy?

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How much do you value the resources your company uses every day? How do you quantify your resources –are they solely physical? Could you do without them, or do you rely on them completely in order to function efficiently? software asset mgmt help businesses economy

These are the variety of questions that business owners should ask on a daily basis but, unfortunately, seem to go unaddressed for the most part – especially in the region of software and digital resources. The Software Alliance (BSA) recently conducted a study into global piracy numbers and discovered that an astonishing 57% of PC users admitted to having pirated software. Apart from the alarming moral deficiency this represents, it also signals a significant monetary haemorrhage in the global economy. This notion presents a ‘Shadow Market’ with a value of $63.4 Billion (2011), the amount that could be contributing to the world’s economy if 100% legal compliance within software were achieved. Total compliance across not only each business, but individuals too, may seem unachievable – but even minor progress in the field of software compliance could see a significant monetary injection into the global economy.

The BSA went on to deduce that properly licensed software sees approximately three times the ROI than pirated software does. This is largely due to legally compliant software use creating a much higher economic stimulus than its pirated counterpart. Just as a shoplifter is effectively removing, or at least stifling, monetary influx into the economy, proliferators of pirated software are not only reducing their productivity – they are detracting from the economy they rely upon to function. On a large enough scale, software piracy could see the collapse of the industry in the same way that the ‘pick and mix’ sweet industry would hypothetically fall if people simply stole it instead of purchasing it. As with any product, a certain level of investment is required to produce a high quality end result, and sales must match and ideally exceed the investment put in. In the pick n mix example, although, just one person deciding to take one or two sweets wouldn’t impact on the business’ ability to break even, a problem would arise if everyone had the same mentality.

Countries that fall into the ‘low-income’ category (the bottom third of GDP) see a much more significant ROI for using appropriately licensed software than those within the ‘high-income’ band, with up to 12 times the ROI than the upper band’s threefold return. The BSA went on to illustrate that, cumulatively, an increase in global, legally-compliant software usage of just one percent would potentially introduce $73 billion into the global economy. This is a phenomenal increase compared to the $20 billion that pirated software makes available. In the UK alone, that stimulates an increase of £1.6 billion, which is a significant figure that could allow for future infrastructure improvements similar to the recent £2 billion injection of funds into care for the elderly, for example. By neglecting or at least failing to effectively combat and raise awareness of the problem of software piracy, the Government is denying itself a cash influx that it would be hard to argue was superfluous to its needs. When you examine the global picture again and consider the amount of money that could be used, a rather disappointing picture comes into focus, and the question that has been asked within the industry rears its head once more – are we doing enough about software piracy? Does it deserve as much media attention as, for example, the music industry and its struggle with piracy?

It could be said that the main problem with regards to software piracy is in the user’s attitudes. People are understandably interested in cutting costs and, as the figures found by The Federation Against Software Theft (FAST) suggested, software is one of the areas that is seen as more reasonably scraped and boiled down to the bare minimum in order to keep costs down. The second conclusion we can draw from findings like these is that companies are undervaluing their software and failing to see the necessity of supporting an entity such as Microsoft, for example. Since companies aren’t buying physical items that they own outright after purchase, for example a typewriter, many find it hard to see the worth of investing in the software. Many companies are also of the opinion that it is easier to risk being audited than it is to stay compliant, because they might feel that getting away with it for several years and then facing a fine is simpler and cheaper. This is certainly a foolish move and is tantamount to driving around without car insurance and arguing that the money saved by being uninsured would cover the penalties accrued in the event of an accident. Another common train of thought is that workers fear being penalised or even dismissed by employers if they were to become ‘whistle-blowers’. The aforementioned FAST study found that as many as 69% of workers were not aware of the protection of the law for whistle-blowers. The report also found (disappointingly) that a surprising 76% of workers said outright that they would not report their employer if they knew they were using pirated software, and of this percentage a shocking 46% said simply that they ‘didn’t care’.

The brunt of the problem, it appears, is down to a rather lackadaisical approach to software licensing and usage. A large demographic appear to either not care about or are unaware of software licensing, or at least hold a rather blinkered view of its necessity. So, how can we as a country move forward to the greener pastures of total compliance, increased GDP and a world without fear of audits? As simple as it sounds, we need to educate companies and their employees on all levels as to the potential benefits of properly licensed software, as well as the value it actually imparts on their company. At the same time, software developers could make licensing easier to understand, without ambiguity, exactly what usage and distribution a company is entitled to when a purchase is made.

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Karl Young

Karl is a Content & Online PR Executive working on behalf of License Dashboard USA. Graduating with honors in Marketing and Advertising Management, Karl runs his own blog and enjoys creative writing.

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Please give me more details as to how exactly this works and if there are any costs involved. Please don’t have anyone call me, just send me an email reply. Thank you. Sarah.

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