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60pc software installed in India in 2013 was unlicensed

Unlicensed software which is quite a common trend has not been much curbed over the years. Starting from individuals to major enterprises, the trend is well profound

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Sanghamitra Kar
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Yolynd Lobo BSA India Director

BANGALORE, INDIA: Despite being a cause of concern for the enterprises, the use of unlicensed software has not been reduced much. Although it exposes them to security risks and threats, enterprises are quite reluctant to change and take an effort to put a stop to it.

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Yolynd Lobo, BSA India, director, explains the security implications of the unlicensed software use in the enterprises, and how they can keep  a check on it.

CIOL: The use of unlicensed software despite the security concerns, is a prevalent issue in India. How do you see it vis-a-vis the scenario globally?

Yolynd Lobo: Unlicensed software use remains a significant problem in emerging markets which account for three-quarters of all unlicensed software installations around the world. The BSA Global Software Survey this year has revealed that 60 percent of the software installed in India in 2013 was unlicensed -a 3 percentage point decrease from 2011 though. This translates to over INR 179 billion in commercial value of unlicensed software in India.

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Globally, the rate at which PC software was installed without proper licensing rose from 42 percent in 2011 to 43 percent in 2013. At 62 percent, the Asia-Pacific region has the highest overall rate of unlicensed PC software installations.

In China, the percentage of PC software installed without proper licensing in 2013, dropped by three points from 2011 to reach 74 percent. Brazil and Mexico too witnessed a rate drop of three points from 53 percent to 50 percent and 57 percent to 54 percent, respectively.

CIOL: What are some of the major security risks posed by the unlicensed softwares?

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YL: IT is one of the biggest bottom line costs to a business. For an average company, IT makes up 25 percent of the budget. In spite of this, many business leaders don’t recognize that unlicensed software is an organizational governance issue, which, if left unaddressed can have significant cost implications for the enterprise.

The use of unlicensed software leaves organizations open to the risk of losing critical and confidential data along with other severe security implications. Unauthorized access to critical company information, time and cost involved in disinfecting as well as the loss of intellectual property or proprietary information also pose serious threats to an organisation’s operations.

According to a study commissioned by Microsoft and conducted by IDC across 11 countries, the direct costs to enterprises from dealing with malware from use of counterfeit software will be US $114 billion in 2013.

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As India increasingly becomes a part of the global supply chain and a key exporter to global markets there is an imminent need to become compliant. This need is further escalated in the wake of stringent export laws being passed in some of India’s biggest export markets.

CIOL: How the use of unlicensed software can be kept under check? 

YL: As the complexity in software licensing models and rules increases, often times, we’ve seen that CIOs may not even be aware that their enterprises are using unlicensed software. Even as enterprises strive to become IT compliant, CIOs find it challenging to keep a track of multiple licenses. Comprehensive software asset management (SAM) processes can not only help companies ensure compliance with their software license agreements but also that they are using their software assets effectively and strategically.

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To help organizations get maximum value from their software investments, BSA developed, Verafirm Certified - only enterprise-level certification based on globally recognized ISO 19770-1 SAM standard. The certification is backed by the software industry and leading auditors in India including - Deloitte, ‎KPMG, ‎PricewaterhouseCoopers and ‎Ernst & Young.

Verafirm Certified follows internationally accepted guidelines and benchmarks to ensure that controls are in place to avoid security and operational risks. It allows CIOs to get a full view of their organization’s IT environment. Getting Verafirm Certified demonstrates an organisation’s ethical practices, thus distinguishing it in the marketplace.

In addition to this, organizations should establish formal policies discouraging the use of unlicensed software and conduct employee workshops to increase awareness around use of licensed software.

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CIOL: What is the adoption rate and awareness level of enterprises related to SAM? 

YL: The recent BSA survey unveils that 37 percent respondents have already implemented SAM in their organizations, 12 percent are in the process of implementing; whereas, 50 percent CIOs have allocated budget for SAM initiatives. This reiterates the willingness of CIOs to invest in SAM programs to be able stay compliant and get the maximum return on their software spend.

The global push for improved performance demands effective management of software assets that can help reduce license-related costs, better manage compliance-related risk and enhance the overall operating efficiencies. Therefore, we see enterprises recognize that implementation of a robust software asset management program is crucial.

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However, enterprises often struggle to manage their software assets effectively in spite of implementing SAM in some way or the other. While there are several global guidelines such as ISO 19770-1:2012 software asset management standard, ITIL, and CoBIt, only the ISO standard focuses exclusively and comprehensively on the management of the entire lifecycle of software across the organisation.

The survey findings underscore a mature understanding of SAM by CIOs and highlights the need for a comprehensive, global-standards based SAM tool that helps get a comprehensive review of their SAM policies, processes, outcomes and license positions. To this end, BSA has developed Verafirm Certified, the only enterprise-level SAM certification, aligned to globally benchmarked ISO SAM standards. As firms compete in a globally dynamic business landscape management of software assets has become as critical as the management of other organizational assets such as financial, human or physical.

As per the survey, there is significant awareness gap between workers and IT managers when it comes to software policies in enterprises. The findings also underscore the need for effective software management practices, especially in business settings.

CIOL: What CIOs need to do to ensure the returns from their SAM investments?

YL: With increasing pressure on companies from their customers, government and software publishers to showcase the use of legal software, it has become crucial for CIOs to ensure that their software licenses are in place.

Unfortunately, we have seen that most organizations end up overspending on software which is attributed to the lack visibility into their software inventory. In fact, overspending on software is one of the biggest concerns among over 45 percent of the surveyed CIOs. The major cause of overspending on software is the inability to identify and redistribute unused software. Very often organisations buy and allocate software to users, but fail to redistribute it when employees leave or their roles change. This is because they lack the expertise to track the allocation and usage of software.

As organisations become increasingly dependent on software, investments in software are also becoming significant. To avoid overspending, CIOs must implement an efficient and comprehensive SAM program that can track and allocate software according to its use, thus avoiding under or over utilization.

Verafirm Certification enables CIOs to get visibility into their software assets, thereby, helping them improve ROI and control costs.

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