by Simon Quicke

The Federation Against Software Theft (FAST IiS) has moved to clarify its standing with FAST Ltd in an attempt to dispel any confusion in the market.

Although the two operations are free standing there continues to be confusion about the relationship among both resellers and customers and as a result FAST IiS has issued a clarification statement.

“FAST Limited was acquired initially by the CS Group in May 2007, which was in turn acquired by the IRIS Group in July 2007 and since that time there has been confusion in the market. I would like to clarify the position," said John Lovelock, chief executive of FAST IiS.

"We are not the same, nor are we part of the same or related organisation,” he added.

Matt Barnes, operations director at FAST Ltd, said that it did share the same aims in terms of wanting to reduce piracy and the use of unlicensed software but was “completely independent”.

Some of the confusion has resulted in the assumption that the two businesses are linked and as a result aware of the messages and approach each other is taking to market.

“They approach things differently and sometimes the assumption has been that a call by FAST Ltd warning about a potential audit is some sort of warning that FAST IiS is about to follow them in looking for unlicensed software,” said one source.

by Simon Quicke

Vendors are widening the reasons customers can fail a software audit making it even more important for users to step up internal efforts, with the aid of a reseller, to ensure compliance.

Last year saw several cases made against businesses by the Business Software Alliance (BSA) and the Federation Against Software Theft (FAST) making it harder for firms to avoid an audit.

Analyst house Forrester has highlighted not just the legal issues that resulted from the increased number of audits last year but the fallout from a claim to the rest of the business.

"The audit process becomes unstoppable once the vendor's compliance team spots a problem and places a dollar value on it," warned Duncan Jones, an analyst at Forrester.

In his report, Surviving a Software License Audit, Jones said that along with an increased number of audits there were also more chances of users being caught on the wrong side of the law.

"Even more worrisome is that vendors also deliver an ever-widening list of reasons for alleged noncompliance," he wrote in the report.

Some of the reasons on the list now include virtualisation, multiplexing and external use.

"Vendor license compliance teams are skilled at spotting revenue opportunities, ranging from genuine excess usage and deployment to, in some cases, questionable interpretation of contract clauses. So no vendor manager should be complacent when he or she receives notification that their firm is about to be audited," the report stated.

by Alex Scroxton

The Business Software Alliance (BSA) has caught up with a West Midlands-based firm discovered allegedly using unlicensed Microsoft and Adobe software in its first settlement of the new year.

Accident claims management and vehicle services provider Accident Exchange Group, which is listed on the LSE and made total sales of £64m in the six months to October 2009, was the subject of a BSA investigation last year.

The company has now agreed to make a payment of £20,000 and purchase legal software to the value of £50,000 without admitting liability.

BSA EMEA compliance marketing director Julian Swan conceded that the settlement was a “hefty cost of any company to bear, particularly in this difficult economic climate.”

He continued: “But as long as unlicensed software accounts for more than one in every four pieces of business software, we will continue to take a hard line. Eventually the message will get through.”

The BSA - which pointed out that alongside legal ramifications and damage to a user’s reputation, unlicensed illegal software also left end-users vulnerable to security threats and data loss - is currently offering rewards of up to £10,000 for those prepared to report illegal usage.

by Simon Quicke

The Business Software Alliance (BSA) has doubled the reward to those staff that are prepared to blow the whistle on their employers using unlicensed software.

According to research that it has undertaken to support a campaign in the capital it is running London-based staff are quite likely to report their bosses for unlicensed software, particularly if they could get extra cash.

The BSA has reacted by increasing the potential reward for whistle blowing from £10,000 to £20,000 until the end of the year.

“Many cash-strapped employees are willing to supplement their earnings in the run up to Christmas by reporting illegal business practices,” said Alyna Cope, spokesperson for the BSA UK Committee.

The BSA is using an advertising and telemarketing campaign to stir up whistle blowers in the capital in the next few weeks.

“We are already investigating several companies in London for using unlicensed software, and they face the prospect of legal proceedings," Cope added.

"Businesses should think carefully about their software use and avoid wasting money on legal action, financial settlements and the unplanned purchase of legitimate software,” she warned.

The BSA announced settlements with three London firms earlier this month as a prelude to its capital campaign.

Analysts say firms are missing a trick

Source: Iain Thomson V3.co.uk, 10 Sep 2009

Companies are missing out on major cost cutting opportunities by focussing on software licensing on Microsoft products according to an analyst’s note.

Researchers at Directions on Microsoft have produced a note saying IT administrators could save large amounts by taking another look at their licensing deals with Microsoft over software.

"Making the wrong choice can cost you thousands of dollars, or worse, expose you to legal risk because of non-compliance," said to Rob Horwitz, chief executive of Directions on Microsoft.

"There are ways to save money if you know where to look."

A key problem is that the licensing system is self-policing and yet the penalties for not buying the correct licenses are severe, and board members are liable. As a result companies often overbuy on licenses to play safe.

Part of the issue is the sheer size of the product offering from Microsoft. With a finger in so many pies the licensing schemes are liable to lead to companies either buying the wrong licenses or sign up to all-you-can-eat Enterprise Agreements.

The note says that licensing terms were highly complex and were likely to remain that way since to simplify the existing system would mean Redmond loses cash in the short term and faces a complex task in changing the current system.

Microsoft also allows many ct groups to set their own licensing terms. Because different product groups have different priorities this leads to complexity.

by Simon Quicke

The number of software audits continues to rise as vendors turn the screws on those companies that are failing to pay for the correct licenses.

In recessionary times the pressure on the software industry to claw back any potential revenue has led to a 50% increase in the number of audits being carried out by manufacturers.

The risks to those that are caught were highlighted yesterday with the Business Software Alliance (BSA) reaching a £10,000 settlement with a London architect firm.

According to FAST Ltd, which specialises in software compliance, the trend that was highlighted by IDC last October, with the analyst house recording a rise in audits, has continued into this year.

FAST Ltd’s figures showed that 30% of firms quizzed had been inspected by a software publisher compared to 20% last year.

Andy Pearce, managing director at FAST Ltd, said that companies were waking up to the possibility of being caught and were looking for help becoming compliant and were reaching out for software asset management (SAM) tools.

“In uncertain times, what organisations must get from their IT estate is predictability and reassurance, not unexpected, unbudgeted costs,” he said.

by Alex Scroxton

Microsoft's ongoing campaign against traders dealing in illegal software has caught 11 more resellers across the country.

This brings the total number of hard disk loaders that Microsoft has fingered since January to 103. The vendor said that with the UK piracy rate currently standing at 27% it would not be giving up its efforts to re-educate small traders who sometimes were not even aware they were doing wrong.

Hard disk loading normally occurs when a system builder sells a PC with unlicensed software pre-installed. In most such cases the dealers have used one copy of a software programme, but installed it on more than one machine.

Microsoft UK SMB & distribution director, Simon Aldous, called on the channel to help in the fight and pull revenues lost to piracy back into the authorised channel.

"The imminent launch of Windows 7 makes this the perfect time to step up the fight against piracy," he said.

"The prevalence of illegal and counterfeit software in the UK presents a huge opportunity to convert customers to genuine products. Taking a proactive approach to piracy helps reduce the threat and make the most of the opportunity," Aldous continued.

According to Microsoft, the Windows Genuine Advantage authentication service currently flags around 13% of Windows installations as not genuine, and the failure rate for Office products is higher still at 45%.

Microsoft anti-piracy attorney David Arthur said Redmond was working hard to bolster the system's anti-piracy capabilities with the upcoming launch of Windows 7, which is widely tipped to be a top-seller.

Microsoft named the dealers involved as;

Computer Clinic, Bolton
Computer Port, Walsall
Eazy PC, Redcar
Goldcast Computers, Stockton-on-Tees
Matrix Computers, Stockton-on-Tees
PC Assist, Oldham
PC Support, Worcester
Personal Touch Computers Ltd, Portsmouth
Platinum Computers, Hartlepool
Spacebar Computers, Litherland, Liverpool
The Little Computer Shop, Griffithstown, Pontypool

Matrix Computers' David Evans said he was pleased to see Microsoft was willing to keep working with small traders such as himself to ensure they were selling legal copies of its products.

"We recognise that we weren't installing Microsoft software correctly and that's something we take seriously. Getting it right is important to us and our customers - the lifeblood of a business like ours," he said.

by Simon Quicke

Those that like to put the fight against piracy into accessible facts and figures might be impressed to see that businesses across EMEA have already paid out £6m this year to settle disputes with the Business Software Alliance.

The BSA has seen £435,000 spent by UK companies in settlements and the costs of getting properly licensed in the first half of this year.

Overall £2.1m was paid out by guilty firms across EMEA in settlements and £4m was spent getting themselves licensed in the first six months of 2009.

The BSA has consistently pursued a policy of going down a legal route with those that break the law around software licensing and accepting settlements with those that are prepared top admit wrong doing and get their houses back in order.

“BSA conducts more than 30 legal actions every working day in EMEA, said Sarah Coombes, senior director of legal affairs for the BSA.

“In the current economic conditions I am concerned that so many businesses continue to flout copyright laws by using unlicensed software,” she added.

Last month the BSA managed to land it’s biggest ever settlement with a German company that was forced to pay out €1.1m in a combination of damages and licensing costs.

There have been some signs that as well as threatening legal action and highlighting the potential risks of using counterfeit software there also needs to be a positive approach taken.

Speaking to MicroScope recently, Matt Fisher, director of marketing at FrontRange Solutions, talked about the importance of using software asset management (SAM) tools to help customers not only identify under licensing but also those incidences where they were paying too much.

by Simon Quicke

Software spending looks set to increase next year despite the continued pressure that users will have on IT budgets but vendors will have to deliver applications that deliver if they want part of the action.

According to Gartner spending on software will increase by 0.45% in EMEA next year and 2.06% in the US compared to this year where the market has so far held ground rather than slide too far backwards in the face of recession. A quarter of those quizzed in EMEA said they expected their overall IT budgets would increase next year.

Although spending was holding firm customers were expecting their investments to go further and for their investments to work with software delivering the results promised on the packaging as well as working with existing legacy systems.

Gartner identified the channel as a key component for vendors looking to ensure they get the right match between customers and applications.

"Vendors need to use a consultative selling approach to understand and then address the most critical needs of IT and the business of their current and prospective clients," said Joanne Correia, managing vice president at Gartner.

"Software vendors also need to develop a stronger presence through partnerships or an extended sales force in emerging markets where higher budget increases are expected," she added.

The majority of players in the software industry have benefited from promoting their products as efficiency drivers unlocking intelligence about the processes of a customer's operations or as cloud options which move spending from capex to opex.

Correia said that savings made by customers on traditional infrastructure were being ploughed into web-based technology.

by Simon Quicke

The Business Software Alliance (BSA) has struck for the second time in its London campaign against under licensing rapping three companies on the knuckles for using software illegally.

The costs for design agency Inca Creative, property advisors Matthews & Goodman and Fortune Asset Management to get their houses in order was not far off £100,000 and follows on just weeks after the BSA named and shamed Soho House.

Inca Creative settled with the BSA for £5,000 after being caught using unlicensed copies of Microsoft and Adobe software and has had to fork out £10,000 to become compliant.

Matthews & Goodman paid £17,500 after under licensing 75 computers and three servers and took its costs up to £60,000 buying the correct licenses.

The impact of the tussle with the BSA was an out-of-court settlement of £8.500 and a further £10,000 getting the correct licenses for Fortune Asset Management.

“These cases highlight the major financial risks businesses in London are running by using unlicensed software. Our campaign is designed to help organisations avoid penalties but London…needs to set an example,” said Alyna Cope, spokesperson for BSA’s UK country committee.

The BSA has been sending firms in London self-auditing forms to ensure that their software estate is legal following on from a similar campaign in Glasgow.

Shaun Nichols in California

Many UK enterprises are still unsure about adopting open source software, according to a recent study.

Research firm Survey Interactive said that some 42 per cent of UK software firms were using open source software, and that an additional 22 per cent were interested in adopting open source tools, but had not yet made a decision.

The adoption rate was roughly unchanged from last year, and is close to that in the US, where 41 per cent of businesses were using open source software.

The UK's uptake of open source tools was still significantly behind that of its neighbours. The study estimated that 67 per cent of French firms and 60 per cent of German companies had adopted open source tools.

Of the countries surveyed, China was the biggest proponent of open source software. Some 80 per cent of companies surveyed in China were using open source tools.

Researchers suggested that the low adoption rate was due to continued scepticism at British enterprises about the risks and benefits of switching to open source.

"The proportion of UK respondents who feel that the benefits of open source software outweigh the inhibitors has decreased this year," read the report.

"Significantly, the UK continues to demonstrate a degree of reticence towards open source adoption, with almost a quarter still monitoring developments but not yet evaluating."

The Business Software Alliance (BSA) has started to name and shame those caught using illegal software as part of its its two-month campaign against software piracy in London.

The BSA announced its plans for the London anti-piracy blitz earlier this week and listed naming and shaming as one of the features of the programme, along with customer education and advice about software asset management.

To kick things off the BSA has revealed details of a case taken against architectural and design practice John McAslan & Partners, which was caught using unlicensed copies of Microsoft and Adobe products earlier this year.

The company was forced to pay £10,000 in a settlement as well as forking out a further £18,000 to get the correct licences on around 100 computers.

The BSA managed to run up settlements totalling £400,000 with UK companies last year as it turned the legal screws on those caught with unlicensed software.

London has become the latest battleground for the Business Software Alliance (BSA) as the anti-piracy organisation kicks off a two-month campaign to encourage users to pay for their software.

The BSA has run similar activities in Manchester last year and Glasgow in 2007 working with local MPs and business groups to highlight the need to be compliant.

The London campaign, which starts today, will be run in a similar fashion with 1,000 businesses contacted with the offer of free consultancy around software licences.

The BSA has the backing of Mark Field MP, the member for Cities of London & Westminster and chair of the All Party Group on Business Services.

During the two month period the BSA is also planning to name and shame companies that have recently been caught using illegal software and been forced to settle.

“We urge London businesses to come forward and ensure that their software licensing is up to scratch, checking all software - from office productivity suites, to design packages and fonts,” said Alyna Cope, spokesperson for the BSA country committee.

“Software piracy deprives developers of the rewards of their work and innovation, with the greatest financial impact felt by smaller firms and start-up software companies, and we need to ensure resource and expertise is not being lost at the base of the sector."

Following the campaigns in Manchester and Glasgow the BSA was able to uncover companies not paying for their software and take legal action.

Although the interest in Software Asset Management (SAM) is higher than it has been in the past there are some concerns that it is being driven by fear of compliance rather than to improve business processes for the long-term.

The current focus on SAM is around helping companies both save money by exposing and reducing over licensing as well as pulling them into line to avoid breaking the law.

But a simple SAM audit fails to help customers to develop a software use strategy, said Daniel Power, EMEA managing director at KACE.

“The majority of people in my experience are going for business information rather than ongoing acquisition and usage of software,” he said.

He added that it had been difficult to use SAM in an ongoing sense in the past but now customers were able to use tools to keep on top of their software estate.

Last week, Trustmarque Solutions research showed that interest in SAM was being sparked by a rise in vendor audits increasing the potential risk customers faced ignoring their licensing issues.

At the same time Power said KACE, which has appointed distributor CDG is looking for around 10 channel partners to help it grow the business in the next 12 months.

He said that it wanted channel partners with Symantec/Altris and LANDesk skills because it offered a similar solution.

The recession is having an impact on the way companies handle their software licences as job cuts and increasing vendor audits squeeze firms.

The findings of research carried out by Dynamic Markets for reseller Trustmarque Solutions backed up anecdotal experiences that dealers have seen on the ground with customers.

Cherry Taylor, researcher at Dynamic Markets, said its Software Asset Management: Impact of the Recession research helped to have a clearer picture of the current situation.

“The impact of staff being laid off is directly having an impact and these companies are under pressure and in some cases over compensating and panic buying licences in this very turbulent time,” she said.

The research found that 35% of those companies quizzed had seen more audits from vendors, 83% of those asked had to admit they were not confident that their software licensing was accurate and a quarter thought former employees had blown the whistle to spark vendor audits.

“Challenging software licences is challenging at any time and is much more so right now,” she added.

Tony Fisher, managing director at SAM Partners, warned that the risks to those that failed to control their software assets were increasing as vendors ramped up audits to try and reclaim revenue.

“Anyone who doesn’t have a solid grasp on licensing is caught between the devil and the deep blue sea either having to put their hands in their pocket to pay for licences or opting to keep their heads down and noticing the vendor’s won’t notice you,” he said.

He added that although software asset management (SAM) was still seen by many as a soft benefit it would save money in the long-run as its experience of customer audits showed that often many were over licensed in some departments.

He said that the research showed a growing interest in SAM and the findings were encouraging because they highlighted an opportunity in the market as well as indicating increasing understanding about the need to get on top of software estate management.

The findings come in the same week that the Business Software Alliance reveled that UK software piracy rates had climbed back up to 27% and the Software Industry Research Board held a major SAM conference.

Two Belfast companies have become the latest businesses to shell out thousands of pounds in settlement costs to the Business Software Alliance after being caught using unlicensed software.

The BSA has a policy of pursuing those that are using unlicensed software through the courts, taking settlements when the guilty parties agree to get their houses in order.

The latest case involves radio station owner Northern Media Group Ltd, which had incorrect Microsoft and Adobe licenses, and Ballyforde Ltd which was caught using an unlicensed copy of Adobe Creative Suite.

Northern Media had to splash out £10,000 to update its licences as well as paying a settlement of £2,500. Meanwhile Ballyforde was stung for settlement costs of £1,000 and £3,000 in license fees.

Alyna Cope, member of the BSA UK Country Committee, said that the latest cases would reinforce the message that companies could not afford to risk using unlicensed software.

“Disregarding intellectual property laws to chase cost savings in the short-term will always lead to more harm than good,” she pointed out.

“Neither were criminal in their intentions, but they do demonstrate that a relaxed approach to software licensing is nearly always followed by added expense and hassle further down the line,” she said.

Rosalie Marshall - vnunet.com

Oracle has announced it will acquire Sun Microsystems for $7.4bn (£5.1bn), or $5.6bn (£3.8bn) net of Sun’s cash and debt. This works out at $9.50 (£6.53) per share.

The sale tops the IBM offer to buy Sun for $9.40 (£6.46) per share, which fell through earlier this month when Big Blue withdrew its bid.

Oracle said it expects the purchase to generate more profit than the previous acquisitions of BEA, PeopleSoft and Siebel combined, forecasting the acquired business to contribute over $1.5bn to its non-GAAP operating profit in the first year to over $2bn in its second year.

"The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems," said Oracle chief executive Larry Ellison.

"Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves."

"Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."

Oracle said that Sun’s Java software is the most important software Oracle has acquired. Oracle uses the software to build its Fusion Middleware.