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Technology
Licensing: Software by the Numbers
(archrecord.construction.com - 4/03 issue)
By Alan
Joch
Think of a pirate. It’s not an
image you might associate with architects, unless perhaps
you’re Bob Kruger, vice president for enforcement for
the Business Software Alliance (BSA) in Washington, D.C.
The BSA, an industry group composed
of software heavyweights such as Microsoft, Adobe, Apple,
Autodesk, and Bentley Systems, considers anyone who makes
illegal copies of commercial applications a pirate. Kruger
says a “fair number” of them are CAD users within
the architecture industry. “Most of the companies we
investigate are not fly-by-night operations,” he says.
“They’re good, well-managed companies that pay taxes
and obey Occupational Safety & Health Administration requirements.
But when it comes to software management, they have a blind
spot.”
Architects are not alone. Across all
industries, about a quarter of the commercial software in
the U.S. is being used illegally, representing approximately
$2.6 billion in lost revenues for software companies, according
to the BSA. In response, the group is becoming more aggressive—some
say excessively so—in enforcing licensing agreements.
Currently, 500 companies are negotiating with BSA lawyers
to resolve compliance issues. Over the past 12 years, the
organization has received more than $83 million in penalties.
Claims can include fines of up to $150,000
for each copyright infringement, in addition to charges of
two to three times the standard price for any software a violator
must purchase so that the number of licenses they own is equal
to the number of people using the software. In extreme cases,
software vendors may attempt to recover profits attributable
to their software in court, a potentially deadly blow to an
architectural office that routinely uses CAD applications.
License violators may also face prosecution under federal
copyright laws, which carry maximum fines of $250,000 and
jail time.
Getting religion
Almost all of the BSA’s enforcement
cases begin with a lead submitted to its “hotline”
by a disgruntled employee who reports an employer that is
out of compliance. If BSA investigators find merit in the
claim, they usually send the alleged violator a warning letter
designed to instill fear. Some letters even advise the software
user to close down its business until any licensing discrepancies
are resolved, says Robert Zielinski, chair of the intellectual
property and information technology practice at Wolf, Block,
Schorr and Solis-Cohen, a Philadelphia law firm.
Most software makers offer
only individually licensed copies of their products (diagram,
far left). But Autodesk and Bentley Systems offer network
server licenses for their CAD software, in which license information
resides in a single place (near left). Users are notified
automatically in cases of noncompliance.
Images:
Courtesy Bentley Systems
Zielinski says these letters are
becoming more commonplace, with more of them going to smaller
companies that may once have felt they could fly under the
radar screens of big software vendors. “Before they receive
a letter, these companies don’t understand the importance
of software licenses,” Zielinski says. “But once
the letter comes, they get religion very quickly.”
Besides the emotional jolt, a letter
can also be a budget buster, even for companies in compliance.
One IT director for an architecture firm says his former employer
spent almost $10,000 in staff time to document all its Microsoft
software licenses after it received a compliance letter, even
though they had the required number of licenses.
The BSA contends that accounting for
licenses is straightforward. “You’re just adding
up the number of software programs you’re using and checking
it against how many software licenses you own,” Kruger
says. But users believe that even conscientious companies
can easily run afoul of overly complex agreements. One “gotcha”
comes when companies recycle old computers. For example, a
designer who receives a new workstation may pass down her
old computer to somebody within the administrative staff,
without deleting the CAD software that was on the machine.
The software may never be used again, but because it still
resides on the hard drive, it may turn up as a violation in
a software audit.
Other people become confused by the
myriad license types offered by software companies. Some allow
registered users to legally install software on both a desktop
and notebook computer, while other agreements limit usage
to a single computer. Also, IT managers may find themselves
constantly working to keep staff members from loading software
brought in from the outside. “When you have zillions
of computers in a company, it’s hard to make sure nothing
sneaks in,” says Peter Theis, IT director at Roger Ferris
+ Partners in Westport, Connecticut.
Of course, some noncompliance cases
involve the outright disregard of agreements by companies
trying to cut costs for expensive software, particularly CAD
programs, which cost upwards of $2,000 to $3,000 per seat.
Other scofflaws flaunt what they consider to be unfair and
restrictive license agreements. For example, some agreements
give software vendors the right to enter a business to perform
an audit whenever it suspects a violation. “Some of this
stuff is sickening,” says one architect in the Northeast.
“When you use the term ‘piracy,’
you’re making an analogy that’s way over the top,”
says Bradley Kuhn, executive director of the Free Software
Foundation, a Boston-based group that advocates the development
of freely distributed “open source” software, such
as the popular Linux operating system. He believes current
licensing policies and “tip lines” foster distrust
among coworkers, and that a new business model built on freely
distributed source code is the answer to copyright infringement
problems.
Kuhn concedes the handful
of free CAD programs now under
development are not yet ready for prime time, but he believes
that situation could change if more professionals supported
the free software movement. “If consumers took half the
money they’re paying for CAD licenses every year and
gave it to some free software project, [open source versions]
could be developed and people wouldn’t have to pay for
licenses anymore,” Kuhn says.
Compliance strategies
Since market-ready, open-source CAD
applications won’t be available anytime soon, how can
architects make sure their company avoids a threatening letter
from the BSA enforcement division? The first step is for upper
management to articulate a formal policy regarding licensing,
says Ken Sanders, FAIA, chief technology officer for Gensler
in San Francisco. “Architects have a reasonable expectation
that clients will comply with the terms of the contracts they
sign—so it’s reasonable for us to comply with the
software licenses we sign, even if we don’t always think
they’re the best terms,” he says.
In addition to communicating that philosophy
to employees, Sanders says senior managers must be committed
to such compliance in their own minds. “If you express
ambiguity, people take cues from that,” he says. “You
need to sit down and talk from the standpoint of how acting
this way is part of being a good citizen. You may not agree
with all the copyright laws and think it’s not reasonable
to restrict the use of software, but at the end of day, when
comes down to an agreement you have signed with another party,
you must honor it.”
GASP, by Attest Systems,
is one of several tools that helps firms manage software licenses
electronically. The software can run reports that help IT
managers determine if they have enough copies of products
available for the number of users needed.
Image: Courtesy Attest Systems
To ease the logistics of compliance,
IT directors suggest purchasing network server licenses of
software applications whenever possible. In this model, a
predetermined number of “seats”—say 10 licenses
of a CAD application for a department of 15 designers—reside
on a single server. Any 10 people may use the application
at a given time, but the system locks out additional users
until somebody logs off. This relieves architects from constantly
monitoring usage to make sure no one is using a program illegally.
Currently, Autodesk and Bentley Systems offer this licensing
arrangement for their respective products. However, other
vendors important to architecture firms, including Microsoft
and Adobe, don’t provide these types of licenses. “This
means we have to manually keep track of, for instance, who
has Photoshop installed in each machine, which is difficult,”
says James Brogan, AIA, IT director for Kohn Pedersen Fox.
“I’m disappointed there isn’t a server license
for these other software packages.”
Third-party auditing programs are also
available to help IT departments keep accurate records of
licenses and software installations. These products include
Express Software Manager from Express Metrix, KeyServer from
Sassafras Software, Inventory from Altiris, TS.Census from
Tally Systems, and GASP from Attest Systems. Prices are based
on the number of computer users in an organization. A 100-seat
version of GASP costs $22 per seat. (The BSA Web site lets
companies download a free trial version of GASP, which will
audit 100 computers for 60 days.)
Theis, of Roger Ferris + Partners, says
architecture firms, especially larger ones, that don’t
make use of auditing software face “a nightmare”
trying to comply with licenses. “You could spend hundreds
of hours” matching what’s on each computer to a
master list of licenses, he says.
Keeping this information in an electronic
record helps a company not only stay in compliance, but also
know where it stands if an audit letter arrives. If that happens,
Zielinski tells his clients to respond quickly and honestly,
even if they’re not in compliance. “We counsel clients
never to swap out hard drives or reformat disks [to hide illegal
software copies]. That only makes things worse and really
makes you look guilty.” Instead, he says, companies should
conduct internal audits to understand how they got out of
compliance and what they need to do to resolve the problem.
The subsequent fines may be stiff, but this avoids walking
the plank into a federal courthouse.
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