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Counterfeit Software Creates Major Risk for Businesses

By all estimates, the rapid spread of high-speed internet has led to a new era in digital distribution, as subscription-based models have changed the game in ways that make life far more convenient.

Streaming services like Netflix, Hulu, and Amazon Video give people convenient access to a wide selection of movies and television series for less than PHP 500, and Spotify offers a huge music library of more than 35 million songs from different eras and genres. Likewise, the concept of software as a Service (SaaS) uses cloud computing technology to enable individuals and organizations to make use of authentic, licensed software at a much lower cost than purchasing an entire suite.

However, despite the abundance of affordable subscription-based software, many companies in the Philippines still resort to using software which they are not properly licensed to use, often acquired through illegal means. The Asia Pacific region, to which the Philippines belongs, has the highest rate of unlicensed software use in the world, at 57 percent.

Like downloading or purchasing pirated movies and music, acquiring and using unlicensed software is not just a problem for the software’s creators. It also introduces various risk factors which can affect the businesses and individuals who acquire it and everyone who uses it.

Some risks aren’t worth taking

Cybercriminals, knowing that many organizations in the Philippines and across the globe seek out unlicensed software online, often spread versions of this software which carry invasive malware. Some types of malware damage the functioning of the host’s computers or other electronic equipment, while others are designed to steal and exploit user data.

Malware attacks cost companies USD $2.4 million (PHP 12.6 million) on average and can lead to downtime that cripples the company for up to 50 days. Each infected computer can cost a company more than $10,000 to fix. Worldwide, these attacks create annual losses of nearly USD $359 billion.

Additionally, software is legally considered intellectual property, meaning it is protected under the respective IP laws of each country as well as international law. Companies caught using unlicensed software can be subject to police raids and face legal consequences such as heavy fines, confiscation of equipment, and individual jail time.

When successful cyber-attacks – especially those involving customer data – or charges linked to unlicensed software become public knowledge, these revelations often cause serious damage to the reputation of the company involved among customers and investors. Such breaches of trust are likely to result in drops in sales and stock market performance, which can further impact the company’s financial losses.

Legalize and protect

In light of this situation, BSA | The Software Alliance, in partnership with the Optical Media Board (OMB) and the Intellectual Property Office of the Philippines (IPO), has launched the Legalize & Protect campaign, a six-month program designed to end corporate use of unlicensed software in the Philippines, therefore improving the state of business and competition and enhancing the country’s reputation in the international software scene.

BSA is launching this campaign concurrently in Thailand, Indonesia, and here in the Philippines, following a similar campaign in cooperation with the Vietnamese government which has shown promising results so far. Target industries include – but are not limited to – manufacturing, IT, finance, professional services, construction, healthcare, consumer goods, engineering, architecture, and design. Since the Vietnam campaign began, many companies there have made the switch to fully licensed software across all their operations.

In the months ahead, BSA will use public education to ensure business leaders are aware of the risks of using unlicensed software.  Its efforts will include marketing, communications, social media content, and in some cases direct appeal to businesses to legalize their software assets.

While BSA exists to protect the rights of its industry members, it believes that the best way to do so is by showing businesses that using licensed software is ultimately in their best interests. According to the International Data Corporation (IDC), switching to authentic, licensed, legally acquired software more than makes up for any initial expense: enterprises gain an average 11% increase in profits when they do so, as it reduces the risk of cybersecurity crises and contributes to an image of the company as legitimate and trustworthy. Going legit is truly the best way forward.

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