By Daniel Hunter

More than one in two (52%) small businesses in the UK have either bought or downloaded illegal software - according to research conducted by BSA the Software Alliance, the leading global advocate for the software industry.

And yet for many of those small companies, the experience of buying illegal software proved a risky business:

· Over two fifths (41%) believe their details were used in identity theft.
· Over a quarter (28%) had their credit card cloned
· 41% said their product did not arrive or arrived late
· A third (33%) claimed additional money was debited from their account
· Another 41% complained that they had no way of directly contacting the seller

Furthermore, 88% of small businesses believe that illegal software use opens them up to liability concerns, as a result of buying a product which fails health and safety compliance, causes injury, inconvenience to customers, inconvenience to staff, lost revenue etc.

The BSA research, carried out by Vanson Bourne, polled decision makers with responsibility for purchasing software in 250 small businesses (with 25-250 employees) in the UK.

For a sizeable proportion of these businesses, the way they bought or downloaded illegal software appeared to be pre-meditated. More than one in five admitted to using a software key generator for business purposes (21%) - a small programme that will generate an unauthorised but working registration key or serial number for a piece of software. It is typically used to create an illegal version of a software application.

And 70% of those who have purchased OEM software not accompanied by the hardware did so more than once. The same applies to repeat downloads of normally-paid-for-software for free from torrent sites (83%) and warez sites (67%), as well as normally paid-for software for free from other sites (63%).

For others, the buying and downloading of illegal software appeared to be accidental. A significant amount took action to remedy the situation once they discovered they’d been duped into buying fraudulent software. More than half of small businesses (51%) replaced the software with a legitimate copy; 27% paid for a legal software key and 10% uninstalled the software but did not replace it. However, these actions suggest that in many cases these businesses had to pay twice; making illegal software a false economy; particularly for those downloading illegal software multiple times.

"The practice of downloading illegal software amongst small businesses is clearly widespread. The research suggests that a large number of UK businesses have an unclear understanding of what constitutes illegal software use, at best; and a blatant disrespect for copyright law and business ethics, at worse," Michala Wardell, UK committee chair of BSA, the Software Alliance, commented.

"It's encouraging to see that many of these businesses have taken action to address the error, often at their own expense. But to avoid undue costs and security risks, businesses need to be more vigilant about where they buy their software from in the future. As things stand, too many small businesses are exposing themselves to unnecessary hazards.”

The study reveals an irresponsible attitude to software management. Fifty four per cent of small businesses don’t have procurement records for all of the software their organisation uses. And yet, an average of 43% of capex goes on software — approximately £17,000 per business, to perform vital tasks.

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