Unlicensed software a source of system failure?

A recent study by The Harrison Group on behalf of Microsoft has found that mid-market companies that have unlicensed software are more succeptible to system failures than companies that acquire their software through legitimate means.

Their analysis simply reports that this is the case, not explaining why. It also references the growth rates and identifies that the companies buying legitimately tend to grow faster than the others.

In my experience, licensing is simply an element of how Information Technology is managed in a business. For many small businesses, computers are looked at as an expense to be reduced. There is little recognition of the value that it can bring to the company. Under these circumstances a number of things occur. They include:

• Acquiring unlicensed software.
• Using software that is no longer maintained.
• Reacting to software problems after they occur, thereby encountering outages.
• Minimizing the cost of support by attempting to fix it themselves.
• Not using the software as effectively as they could.

All of these issues are symptoms of treating technology as a cost of doing business. Typically, costs are minimized, but there is no recognition that outages can cost money. When systems are down, people are unproductive. This can lead to overtime, customer dissatisfaction and lost sales.

When I am asked to help a company, they often have difficulties that are affecting their business. One of the things that I always look for is how is technology being managed. I usually find a break/fix mentality with an emphasis on mimizing costs. I also usually find that too much money is being spent... on the wrong things. And this affects their business performance. Money is wasted in some areas and restricted in others. Two of the areas where costs are restricted is in the purchase of software and in software maintenance. The result is system failures and lost productivity,

While the study talks about the relationship between unlicensed software and system failure , the real source of the problem is the mindset towards technology. It is considered a necessary cost of doing business rather than a value to the business. In my experience, if the value is recognized, the value increases. The report identifies that this does not nessarily increase the costs.

To see the full report, see http://download.microsoft.com/download/D/C/5/DC503630-3EDD-455D-B155-4FCCA6FCCEA3/TCO%20Global%20Final%20Whitepaper.pdf