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Angry employees tattling on companies that violate software licenses

Disgruntled IT pros are blowing the whistle on companies with out-of-compliance licenses

By , Network World
February 17, 2011 08:51 AM ET

Network World - In a tough economy, disgruntled or fired employees are reporting their companies' questionable software licensing practices and exposing a culture of widespread software piracy.

Rampant software piracy by IT professionals was clear in a survey of 200 IT professionals on IT Ethics conducted by Network World. While 89% of respondents said it was unethical for an IT employee to make the company fall out of compliance with software license agreements, 70% said they have directly witnessed other IT folks knowingly violating software licenses.

One survey respondent told Network World that IT professionals are often ordered to violate software agreements by managers on the business side of the house. Additionally, 69% of respondents said they've directly witnessed their IT professional peers looking the other way when employees use the network to illegally install unlicensed software or share DRM-protected files.

The Software and Information Industry Association (SIIA) confirms that its caseload of corporate piracy is on the rise. The SIIA says that frustrated IT professionals are increasingly fingering their employers for failing to buy enough copies of the software used on the job.

The SIIA, which litigates software piracy cases, says the number of reports it received about corporations violating their software licensing agreements increased during the second half of 2010. SIIA is now investigating more than 40 complaints per month, up from 30 a year ago.

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SIAA gives out anti-piracy rewards to whistleblowers -- $127,000 to 24 sources in 2009 and $57,700 to 16 sources in 2010 -- who report incidents of corporate end-user software and content piracy that are later verified.

"The reason people report to us is because they are disgruntled," says Keith Kupferschmid, senior vice president of intellectual property at SIIA. "They may have been fired. They may have not gotten the bonus or raise that they wanted. They end up getting angry and reporting to us."

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IT professionals "absolutely understand that this is an ethical issue," Kupferschmid says. "Ninety-five percent of the people who end up reporting noncompliance are from the IT world. They tell us this is immoral, this is unethical. They use terms like that. It's usually not the IT people who are responsible for the company falling out of compliance. They're trying to do the right thing, but they are being forced to do the wrong thing."

IT professionals are "probably more ethical than other employees, at least in the software compliance area," Kupferschmid says. "The reason is that they work in this area and they respect it. They don't like it when other people don't."

The number of reports received by SIIA declined during the 2008 recession because IT professionals were thankful that they had jobs and less likely to betray their employers. At its peak, SIIA was investigating 70 complaints per month. The number of actionable complaints is rising again because employees are starting to feel more secure in their jobs, and they're more comfortable becoming whistleblowers, SIIA said.

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