Software licensing and piracy: How many organizations run their business without proper licensing still amazes me. Time and time again, we come across organizations running their business using software applications to create revenue for their organizations or create efficiencies. Yet, many of the organizations fail to have proper licensing. Let’s talk a little bit about this.
Software licensing- you know, people look at it, and they don’t see the value in software. Today, especially, they see it as so simple. You grab an application, copy it, install it, and use somebody’s license key, and they think it’s all so simple. Why should someone pay so much money for this?
The question comes down to what does software cost? We’d need to flick that around and go. Why do we need that software? Let’s think about this. Organizations use software applications to create efficiencies, ease of use, and ease of work. I have seen organizations that use applications that used to take 20 people to do the job, and now they are getting all that work done with two or three people, and yet there’s still a challenge for these people to understand the value of purchasing that software.
I have seen instances where organizations are running their company. These are large organizations with over a hundred people, having very few licenses for software throughout the organization. I advise any business owner or IT person listening to or reading this right now to ensure you have an accurate inventory of all the software you use.
Let’s be blunt here, just so that everybody understands it. If you don’t need a piece of software, don’t use it; don’t buy the license. But really, you need to understand that you have an obligation to the developer of that software, the manufacturer, to pay the licensing fee; you’re using their intellectual property. You are stealing; when you use unlicensed software, it’s theft, you know, we look at unlicensed software. People use it and think, oh, you know, “It didn’t cost anything; therefore, why should I pay for it?” or “I’m only using it once in a while,” but it comes down to if you use this software even once and it benefits your organization, why not pay for it?
If you can’t afford it, don’t use it or hire someone with a licensed copy, pay them what you need to, and have the work done what you need to do. It’s not worth putting your business at risk; that’s right, you have to understand there’s a risk of operating with unlicensed software.
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If I think now about the cost of software, let’s say, an office package. First is the price of that same office package, say 15 years ago. You know, maybe an office used to cost $3500.00, $5000.00. Today, you can buy that same office suite for as little as $500.00. Gone are the days of going to the corner store and having someone install a computer for you with all that free software. Why would we pirate that software? Hey, most companies have beautiful pricing if you are a home user or student.
Take, for instance, Microsoft Office. You can get the same for under a hundred dollars with applications from companies like Auto Desk. For Auto CAD, they have home versions of their software and academic licensing for their software. They’re not to be used in commercial environments, but they are there for you to purchase, become educated and proficient with those applications, and use them for your home uses.
Why buy software? You know what? I’ll get back to that in a moment. The reality is – Where are the inefficiencies in your organizations? You need to stop and take a look at that. What does it cost your organization? Where are you losing money? Where are you inefficient? Why? It comes down to not the dollars and cents you pay for a software license; it’s the dollars you burn and throw out the window through inefficiencies in your organization.
When we look at a company, the highest and most-our greatest expense on our balance sheet is the cost of our employees? Go ahead and take a look at your balance sheet now; pull it out. Now, you tell me what the largest expense is. Sure, if you’re a manufacturing company, perhaps the cost of your materials is the highest; however, for many organizations, if we get away from that, the second-highest price will be the cost of your employees.
So that, employee cost, when we are inefficient, means our computers are running slow, or we’re having them do tasks manually, which could be automated through proper software licensing or line of business applications. We’re throwing money out of the window to have these people work extra hours to do something they could do in less time, making them more efficient. Now, let’s talk about purchasing software for your business.
Line of business applications: What do I mean by a string of business applications? Everybody is in a specific type of business. If you’re a not-for-profit, you’re in some humanitarian work, or you’re working for a cause, there are probably donations and activities that you need to track. You need some database application to manage your events and activities, to track how efficient you are and how many people you’re serving in your community and report that back to your donors and funders.
If you’re a ‘for profit’ organization, you must have some application that manages your relations andand interactions with your customers. These are typically enterprise resource planning or customer relationship management applications; therefore, automating and tasking your organization is not just about automating the tasks in your organization. Still, it also gives you a view of the data, for example, what the data is that alerts you to what’s going on and what’s happening in your business. Where are you wasting money? Where are you making money? Were you making the right choices, or were you making the wrong choices? Until you can view your organization’s information, you don’t know what’s going on.
You know, many successful businesses said when they were asked, “Why didn’t you quit?” And the answer that came back was, “I didn’t realize how bad off I was. I didn’t know I was already bankrupt.” So, how do you get to bankruptcy? How do you get to inefficiency? It’s when you don’t know; you don’t have the information in front of you available to process what your business is doing. Would you rather know up front and be able to, of course, correct it along the way so you’ll be able to push your business in the direction that it needs to go so that it can grow and service a greater community, serve more clientele and help you be more successful in your mission whether that’s for-profit or it’s for serving a greater cause.
Buying licenses, I said I would get back to this. Well, here we are. Microsoft Word is a great productivity suite, and it’s very inexpensive. Look at all the tools you get there: spreadsheets, word processors, and maybe some presentation applications. These tools are the epicenter for most businesses. Aside from email, I suspect most business users primarily use word processing. Secondary would be using spreadsheets, databases, and presentation software all in one suite.
They always say that the average employee, for even numbers, makes, $5,0,000.0 a year; let me say it costs $25.00 an hour. Could you imagine how long it would take for an employee today on a typewriter to create a proposal where they have to type everything up? You know what, I don’t even want to think about it, nor do you, because it’s not the case. However, what we do want is for employees to be able to be productive and creative and stay in the moment when they’re working on that application. We don’t have them worry about losing information and knowing their systems will crash.
Also, we want them to use the best available tools, the software that’s got the features that we need today, and generally, that’s staying in touch with the releases that organizations make on their software. So there’s something called software assurance. Now, software assurance or maintenance keeps you current with the released software versions. So purchase the licenses for your business and and ensure you have a permit for the antivirus program. Ensure your office suite is licensed and your operating system is approved. Your Windows or other operating system must be approved for security patches and updates.
Your mail server, server applications, and line of business applications invest. You can amortize this over multiple years. If I swallowed the pill up front with a $35,000.00 investment, I recently purchased a line of business applications. However, when I spread that out over five years, this is as little as $500.00 a month. Why wouldn’t I buy that application?
I really consider the efficiencies it will create for my organization. I can easily see that type of return every month and know that it will be greater as time goes on.
Avoid breaking the law and stealing someone’s intellectual property. If you’re making money or running a business, you need licensed software. So buy those licenses and make sure you’re current.
Using unlicensed software does not jeopardize your business, reputation, or career. Purchase the best software you can afford and make sure you use it, learn how to use it, and be efficient. Get your support to keep your computers and network stable to avoid crashing systems. You know, it’s the same thing with running licensed software. Ensure you’re paying someone to take care of your computer systems, and have a dedicated resource of experts who understand how technologies work.
You know a good technology company will come in and learn your business and apply technology appropriately to that. You don’t need to understand technology. It would help if you had a trusted partner to work with to become more efficient at what you do. Good business, licensed software, pays for support and is more efficient.
