Unlicensed Software – Some Clouds have a Silver Lining
How a nursing home care training provider found the silver lining in an investigation into unlicensed software use
We established CareShield, training specialists for nursing homes, in 2009 in the midst of a deep recession. Since then we have encountered some bumps along the road, arguably to our benefit, as each experience has made us more efficient, resilient and focused.
One was the difficult decision to downsize the company and consolidate our products after a period of unstructured growth.
The other was to turn an investigation into unlicensed software use into an opportunity to reorganise our software assets, and in so doing equip ourselves with tools to deliver superior online training products to over 300,000 users in the health and social care sector.
In 2011 we purchased Access Academy , specialists in training software, with a view to wholly owning and developing the online training system previously developed by the company for CareShield. In the process we bought all of its assets. We assumed its software was fully licensed. Unfortunately this was not the case. According to analyst and research company, IDC , more than one in four pieces of software in the UK is unlicensed. This means that the chances of acquiring a company with unlicensed software are high. This is significant as simply being found with unlicensed software is tantamount to breaking copyright law and opens businesses up to legal action by BSA | The Software Alliance and software publishers resulting in hefty fines. It’s also the daunting prospect we faced when BSA came knocking on our door.
Crucially, we did not obtain Access Academy’s licensing statements at the point of take-over and therefore couldn’t supply proof of purchase as requested by BSA’s appointed lawyers, nor could we verify whether the licences were indeed transferable. Consequently, a BSA-mandated software audit demonstrated that we were under-licensed. The situation was further complicated by an incomprehensive overview of our licensing situation. We did not know what software was legally ours. The only action we could take, albeit an expensive one, was to wipe the slate clean and start again.
After the Software Audit
In the process of examining how we could legalise our software, we noted that we had inherited a number of developer licenses which can lapse easily. To ensure we didn’t make the same mistakes as Access Academy we bought cloud-based licences on a subscription basis which suited us from a cash flow point of view. As a welcome corollary of this, we will always have the latest software versions, which is impressive given our modest set-up. Our cloud-based, fully updated and licensed software has enabled us to achieve a level of sophistication we hadn’t deemed possible at this point in our journey. Understandably our employees are thrilled. They now spend less time battling with old iterations of software and more time being productive; which only benefits the business.
Working with the BSA to resolve the software licensing issues was a sobering experience and certainly one I wouldn’t choose to repeat in the future but it did force us to examine our software asset management and in so doing effectively future-proof our organisation. Like many other challenges, business owners have an opportunity to turn a negative experience into an opportunity to grow in knowledge, wisdom and endurance.
We are committed to providing the best in class training to nursing home staff at a cost they can afford through e-learning. In the spirit of Friedrich Nietzsche, the famous German philosopher;
“That which does not kill us makes us stronger.”
Saying that, when we acquire another company in the future we will request its licensing statements before the point of negotiation and we’ll certainly ask more probing questions.
Christian Greenshaw is the Managing Director of CareShield
For further reading take a look at is4profit’s business advice article on software use and your liabilities.