I'm no fan of the Business Software Alliance (BSA) or their predecessor CAAST (Canadian Alliance Against Software Theft), regular visitors to our website will know that. I don't disagree with their position that their member companies should be paid for their products -- that would be silly. However, I have always thought that there's something sleazy about their approach. At one time the organization would wait for calls from disgruntled employees seeking revenge on their erstwhile employers. When this didn't generate the revenue they had hoped for the BSA began an aggressive advertising campaign exhorting unhappy employees to "Nail Your Boss!" Then, in 2005, not satisfied with the level of distrust they had created in many small businesses and still disappointed with their take, they began offering bribes. Bribes which today scale to as high as a million dollars. While the typical payoff is only about $5,000, the scheme appears to be working. Last year the organization extracted $13 million from North American companies with nearly 90 percent of that coming from small businesses.
Why the focus on small business? Most likely because small businesses don't have the knowledge or the resources to fight back. Further, small businesses are not likely to have the automated systems to monitor and control the distribution of software nor the staff necessary to do the job manually. In short, small businesses are easy pickings.
Even the BSA recognizes that license compliance issues in small businesses are not typically the result of nefarious intent. Bob Kruger, who directed BSA enforcement efforts from 1993 until 2005, says "More likely these days the disputes are going to centre around negligence or sloppiness." This doesn't prevent them extorting as many dollars as possible from their targets. It's common knowledge that the penalty imposed for a company found to be in possession of improperly licensed software is double the value of the software but, like so much common knowledge, this isn't exactly true.
First, it's three times the retail value and then there are the extras. Let's assume that XYZ Company has been targeted by the BSA and has been found to have 10 unlicensed copies of Microsoft Office Professional Plus 2007 with a total retail value of $6900. They can expect to be hit with a penalty of $20,700, right? Well, no. Under the BSA's creative accounting scheme, XYZ is in violation for each of the component products of Office (Access - $309, Excel - $309, Outlook - $159, Powerpoint - $309, Publisher - $249, and Word - $309) for a total retail value of $16,440 and subsequently, liable to a penalty of $49,320 plus $3,500 in real or imagined legal fees for a total of $52,820 - nearly 8 times the value of the software allegedly infringed.
The BSA deems software to be pirated if a company can't produce a receipt for it. Consider this for a minute. By this logic, all the software bundled with computers sold at Staples, Future Shop, Best Buy etc. and not itemized on the bill of sale will be deemed pirated -- leaving the buyer open to BSA persecution.
So a $600 computer bundled with $1,200 worth of free software can leave you open to several thousand dollars in penalties should you come under the BSA's radar. The BSA claims, in the words of current enforcement director Jenny Blank, that it's not worth the BSA's time to pursue "onesy, twosy random non-compliance." You won't convince MediaEntertainment Inc. of Salt Lake City, Utah where two (2) unlicensed copies of Microsoft software with a retail value of $6,500 prompted the BSA to press for a $16,500 settlement. The parties ultimately settled for an undisclosed amount.
Of course, there is often more at stake than the financial penalties. The BSA and it's member companies like nothing more than to publicize their "successes". In 2001, Ernie Ball Inc., after paying $90,000 to settle a BSA claim, became the unwilling star of a Microsoft advertising campaign. Furious, CEO Sterling Ball ordered that the company become "Microsoft free" within six months and he's never looked back because "even with the fine, I'm way ahead."
Ball's secret? Open source software. By installing Linux and open source applications like OpenOffice.org and GIMP, Ball figures he saved $80,000 from the get-go. And the company continues to save money each year simply from having gotten off the Microsoft merry-go-round of forced upgrades and planned obsolescence
