The Business Software Alliance (BSA), a software licensing watchdog funded by some the world's leading software vendors, has announced that it fined businesses in the United Kingdom £2.2 million (US $3.53 million) for using illegal software in 2010. That's more than double the £960,000 levied against British firms in 2009, which itself was an increase over the amount recovered in 2008.

The results highlight a growing focus from the BSA and its supporters on cracking down on illegal software use globally. But why is it that so many organizations are getting caught out and what can you do to avoid costly fines?

It has to be noted that the majority of software piracy in the developed world is not malicious (although counterfeit software is a major problem in some countries, it makes up a relatively small number of piracy cases in Europe and the United States) – instead it is often down to poor management at the organizational level.

It is often far too easy to install software, share CDs/DVDs around the office or download applications without giving thought to the licensing conditions attached to the software. As a result, it is all-too common to see software being used across the organization that has not been correctly licensed. This can be as a result of IT staff not being sufficiently diligent to check the number of licenses owned by the organization prior to installing software on PCs or, in some cases, by senior management turning a blind eye to their licensing obligations.

Either way, the statistics suggest that organizations are now more likely than not to get caught out. Figures from Gartner and other analyst firms now state than more than 50 percent of organizations can expect at least one software audit over a 12-month period (some firms have experienced three or four requests from separate vendors).

Each audit cannot only cause disruption to the business, but can also be costly in terms of manpower and, if the organization is found to be under-licensed, compliance costs.

Introducing Software Asset Management

The simple way to minimize the costs of an audit and avoid compliance fines is to prepare in advance. Establishing an audit of what software is in use across the network and reconciling this against the licenses purchased by the organization is part of a process called Software Asset Management (SAM). And in addition to reducing potential disruption and costs in the event of an audit, proactive SAM can also save the business money.

Studies conducted by FrontRange Solutions found that the typical organization over-spends on software by as much as 20 percent (buying new software rather than re-harvesting licenses, purchasing outside of volume licensing agreements, continuing to pay support fees for unused applications etc). By understanding what software is on the network, how it is used and what licenses are held, organizations can optimize their available assets and eliminate over-spend on software.

Getting Started in SAM

The simple and most effective way to get started in SAM is to understand what software is currently on the network and whether it is actively being used. Tools like FrontRange Discovery and others create a dynamic inventory of the hardware and software across the network. Identifying applications installed on PCs but not actively used can be one of the fastest ways to start both saving money and reducing compliance risks today.

Some audit tools are offered on a free trial basis. Why not surprise yourself and see what applications you can find on the network that are costing you money and causing an unnecessary compliance risk? The chances are if you don't find it yourself, then someone else will.