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The Price of Not Being Vigilant: Software Licensing Costs
By Baselinemag
2002-09-03

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Use our online calculator to find out what using illegal software could really end up costing you.

The example here shows how a company running one application on 520 PCs could be forced to pay more than $173,000 in fines and penalties if it is unwittingly using just 20 illegal copies of the software. Find out what unauthorized software could wind up costing you using the tool below or download our Excel spreadsheet.

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Directions: Enter your own numbers as prompted below. Do not attempt to fill in the fields next to a blue or orange field; these will be automatically filled in once you have entered all the required information.


Paying for a Self-Audit Makes Sense...
Companies that take an inventory of their electronic assets often learn they have unauthorized copies of software kicking around. 		YOUR COSTS EXAMPLE
Application
The most common applications used illegally are from Microsoft, Symantec, Adobe, Macromedia and Network Associates, according to watchdog groups.

Corel Word Perfect Office 2002
Total number of copies found

500
Number of illegal copies

 20
Cost per title (MSRP)

$ $389
Licenses for illegal copies

 $$7,780
Audit costs
Audit costs reflect a $50/hour cost for a technician to inspect three PCs or laptops. In this case, 175 technician-hours are needed to complete the audit.

$ $8,750
Asset management software
Enterprise-class asset management software, from companies such as Computer Associates and Peregrine Systems, keeps track of software licenses. These applications can cost up to $35 per seat, including setup fees.

 $ $18,375
TOTAL AUDIT AND REPAIR COSTS

 $ $34,905
...To Keep the Software Police — and Major Fines — Away
When an outside group such as the Software & Information Industry Association steps in, the fines can add up. 		   
Fine (2 to 4 times MSRP)
Please enter a value between 2 and 4.

 3
Fines can reach two to four times a manufacturer's suggested retail price (MSRP). This example assumes a fine of three times the MSRP.

$ $23,340
Potential legal penalties
If a company refuses an audit by a watchdog group like the Business Software Alliance or the Software & Information Industry Association, that group can sue for copyright infringement and seek damages in civil court. The potential legal penalty for each unauthorized software title is $150,000.

$ $150,000
Criminal penalties
In extreme cases, federal authorities can seek criminal penalties, including a fine of up to $250,000 and a prison sentence of five years.

 $ $0
TOTAL FINES AND PENALTIES

 $ $173,340
   
THE BOTTOM LINE
Never mind the bad publicity; using software illegally can be costly. Here, the $34,905 is money that has to be spent; the $173,340 isn't.

   
Audit and repair costs

 $ $34,905
Fines and penalties

 $ $173,340
TOTAL

 $ $208,245







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