Software Licensing
Software licensing and piracy: How many organizations run their business without proper licensing? Time and time again, we come into organizations that are running their business using some software application to create revenue for their organizations or to create efficiencies. Yet, many of the organizations fail to have proper licensing. Let’s talk a little bit about this.
Software licensing, you know, people look at it, and they don’t see the value in software. Today, especially, they see it so simply. You grab an application, copy it, install it, and use somebody’s license key; they think it’s all so simple. Why should someone pay so much money for this?
The question comes down to what does software cost? We’d need to flick that around and go: why do we need that software? Let’s think about this. Organizations use software applications to create efficiencies, ease of use, and ease of work. I have seen organizations that use applications that used to take 20 people to do the job, and now they are getting all that work done with two or three people, and yet there’s still a challenge for these people to understand the value of purchasing that software.
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I have seen organizations run large organizations with over a hundred people, with very little license software in the entire organization. My advice to any business owner or IT Person listening or reading this right now is to ensure you have an accurate inventory of all the software you use.
If you don’t need a piece of software, don’t use it; don’t buy the license. But you need to understand that you have an obligation to the developer of that software, the manufacturer, to pay the licensing fee; you’re using their intellectual property. Let’s be blunt here, just so that everybody understands it. You are stealing when you use unlicensed software; it’s theft, you know, we look at unlicensed software, and people use it and think, oh, you know, “It didn’t cost anything; therefore, why should I pay for it” or “I’m only using it once in a while,” but it comes down to if you use this software even once. It benefits your organization, so why not pay for it?
If you can’t afford it, don’t use it or hire someone with a licensed copy; pay them what you need to and have the work done what you need to do. It’s not worth putting your business at risk; that’s right, you have got to understand there’s a risk to operating with unlicensed software.
Gone are the days of going to the corner store and having someone install a computer for you with all that free software on it. If I think now about the cost of software, let’s say an office package. First is the price of that same office package, say 15 years ago. You know, maybe an office used to cost $3500.00 or $5000.00. Today, you can buy that same office suite for as little as $500.00. Why would we pirate that software? Hey, most companies have extremely attractive pricing if you are a home user or student.
Take, for instance, Microsoft Office, which you can get for under a hundred dollars, and the same with applications from companies like Auto Desk; for Auto CAD, they have home versions of their software and academic licensing. They’re not to be used in commercial environments but are there for you to purchase, become educated and proficient with those applications, and use them for your home uses.
Why buy software? You know what? I’ll get back to that in a moment. The reality is – Where are the inefficiencies in your organizations? You need to stop and take a look at that. What does it cost your organization? Where are you losing money? Where are you inefficient? Why? It comes down to not the dollars and cents you pay for a software license; it’s the dollars you burn and throw out the window through inefficiencies in your organization.
When we look at a company, the highest and greatest expense on our balance sheet is the cost of our employees. Go ahead and take a look at your balance sheet now; pull it out. Now you tell me what the largest expense is. Sure, if you’re a manufacturing company, perhaps the cost of your materials is the highest; however, for many organizations, if we get away from that, the second highest price will be the cost of your employees.
So, when we are inefficient, meaning our computers are running slow or we have tasks manually, employee costs are automated through proper software licensing of business applications. We’re throwing money out of the window to have these people work extra hours to do something they could do in less time, making them more efficient. Now, let’s talk about purchasing software for your business.
Line of business applications-what do I mean by a string of business applications? Everybody is in a specific type of business. If you’re a not-for-profit, on some humanitarian work, or working for a cause, there are probably donations and activities you need to track. You need a database application to manage your events and activities, follow how efficient you are and how many people you serve in your community, and report that back to your donors and funders.
If you’re a ‘for-profit’ organization, you must have some application that manages your relations and customer interactions. These are typically enterprise resource planning or customer relationship management applications; therefore, automating and tasking your organization is not just about automating the task in your organization; it’s also giving you a view of the data, for example, what the data is that alerts you to what’s going on and what’s happening in your business. Where are you wasting money? Where are you making money? Were you making the right choices, or were you making the wrong choices? Until you can view the information from your organization, you don’t know what’s going on.
You know, many successful businesses said when they were asked, “Why didn’t you quit?” And the answer that came back was, “I didn’t realize how bad off I was. I didn’t know I was already bankrupt.” So, how do you get to bankruptcy? How do you get to inefficiency? It’s when you don’t know; you don’t have the information available to allow you to process what your business is doing. Would you rather know up front and be able to, of course, correct it along the way so you’ll be able to push your business in the direction that it needs to go so that it can grow and service a greater community, serve more clientele and help you be more successful in your mission whether that’s for profit or it’s for serving a greater cause.
Buying licenses, I said I would get back to this. Well, here we are. Microsoft Word is a great productivity suite, and it’s very inexpensive. Look at all the tools you get: spreadsheets, word processors, and some presentation applications. These tools are the epicenter for most businesses. Aside from email, I suspect that most business is primarily word processing. Secondary would be using spreadsheets, databases, and presentation software all in one suite.
They always say that the average employee, for even numbers, let’s say, makes $50,000.00 a year; let me say it costs $25.00 an hour. Could you imagine how long it would take for an employee today on a typewriter to create a proposal where they have to type everything up? You know what, I don’t even want to think about it, nor do you, because it’s not the case. However, what we do want is for employees to be able to be productive and creative and stay in the moment when they’re working on that application. We don’t have them worry about losing information and knowing their systems will crash.
Also, we want them to use the best available tools, the software that’s got the features we need today, and generally, stay in touch with the releases organizations make on their software. So there’s something called software assurance. Now, software assurance or maintenance is to keep you current with the released software versions. So purchase the licenses for your business and ensure you have a permit for the antivirus program. Ensure your office suite is licensed and your operating system is approved. Your Windows or other operating system needs to be approved so that you get the security patches and updates.
Your mail server, your server applications, and you’re line of business applications invest. You can amortize this over multiple years. I recently purchased a string of business applications that if I swallowed the pill up front with the amount of $35,000.00 investment. However, when I spread that out over five years, this is as little as $500.00 a month. Why wouldn’t I buy that application?
I look at the efficiencies it will create for my organization, and I can easily see that type of return every month and know that it will be greater as time goes on.
So buy those licenses and make sure you’re current. Avoid breaking the law and stealing someone’s intellectual property. If you’re making money or in business, you need to have licensed software.
Using unlicensed software does not jeopardize your business, reputation, or career. Purchase the best software you can afford and make sure you use it, learn how to use it, and be efficient. Get the support you need so that your computers and network are stable and you don’t have crashing systems. You know, it’s the same thing with running licensed software. Make sure that you’re paying someone to take care of your computer systems and have a dedicated resource of experts who understand how technologies work.
You know a good technology company will come in and learn your business and apply technology appropriately to that. You don’t need to understand technology. It would help if you had a trusted partner to work with to become more efficient at what you do. Good business, licensed software, pays for support, and is more efficient.
