Software Licensing Makes Good Sense

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Software Licensing Makes Good Sense Powered By Docstoc
                            BY JEFF BRODIE

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                                                   Software Licensing

Software licensing and piracy: It still amazes me how many organiza-
tions continue to run their business without proper licensing? Time and
time again, we come into organizations that are running their business
using some type of software applications to create revenue for their
organizations or to create efficiencies in their organization and yet
many of the organizations fail to have proper licensing. Let’s talk a lit-
tle 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 simple. You just
grab an application, you copy it and install it and use somebody’s li-
cense key and they think it’s all so simple. Why should someone pay
so much money for this?

      And the question comes down to not—what does a software cost.
 We’d really need to flick that around and go, why do we need that
software? Let’s think about this. Organizations use software applica-
tions to create efficiencies in their organizations, ease of use, and ease
of work. I have seen organizations that use applications that, used to
take 20 people to do the work 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.

 I have seen instances where organizations are running their company
and these are large organizations over a hundred people, having very
little license software in the entire organization. My advice to any busi-
ness owner or IT Person listening or reading this right now is to make
sure that you have an accurate inventory of all the software you use.

      If you don’t need a piece of software, then don’t use it, you know
don’t buy the license. But really you need to understand that you
have an obligation to the developer of that software, the manufacturer
C o d e f u s i o n C o m m u n i c a t i o n s!                        Software Licensing

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 un-
licensed 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 really comes down to if you use this software
even once and it benefits your organization, why not pay for it?

If you can't afford it, then don’t use it or hire someone who has a li-
censed 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 now of going to the corner store and having some-
one to install a computer for you with all of that free software on it.
You know if I think now about the cost of software, let’s say an office
package. First is the cost of that same office package say 15 years
ago. You know, maybe an office it used to cost $3500.00, $5000.00.
 Today you can buy that same office suite as little as $500.00. Why
would we pirate that software? Hey, if you are a home user or stu-
dent, most companies have extremely attractive pricing for you.

Take for instance Microsoft Office, you can get for under a hundred
dollars the same with applications from companies like Auto Desk, for
Auto CAD, they have home versions of their software, academic licens-
ing for their software. They’re not to be used in commercial environ-
ments but they are there for you to purchase and become educated
and proficient with those applications and use them for your home

      Why buy software? You know what? I’ll get back to that in a
moment. The reality is – Where are the inefficiencies in your organi-
zations? You really need to stop and take a look at that. What’s it
costing your organization? Where areyou losing money? Where are
you inefficient? Why? Because, what it really comes down to is it’s
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not the dollars and cents that you pay for a software license, it’s really
the dollars that you burn and throw out the window through inefficien-
cies in your organization.

     When we take a look at a company, our highest and most—our
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 are the highest however,
for many organizations, if we get away from that the second most
highest cost is going to be the cost of your employees.

So that employee cost, when we are inefficient, meaning our comput-
ers are running slow or we’re having then do tasks manually, they
could be automated through proper licensing of software or line of
business applications, then what’s really happening is we’re throwing
money out of the window to have these people work extra hours to do
something that they could be doing 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 line of busi-
ness applications? Everybody is in a specific type of business. If you’re
a not for profit, you’re in some type of humanitarian work or you’re
working for a cause, there’s probably donations and activities that you
need to track. You need some type of a database application to man-
age your events, activities, to be able to track how efficient you are,
how many people you’re serving in your community, and be able to
report that back to your donors and funders.

      If you’re a ‘for profit’ organization, you have to have some type
of application that manages your relations, your interactions with your
costumers. These are typically enterprise resource planning or costu-
mer relationship management applications, therefore automating and
tasking your organization really not—it’s not just about automating the
task in your organization but it’s also to give you a view of the data,
for example what the data is that really alerts you to what’s going on,
C o d e f u s i o n C o m m u n i c a t i o n s!              Software Licensing

what’s happening in your business. Where are you wasting money?
 Where are you making money? Were you making the right choices,
were you making the wrong choices? Until you can really view the in-
formation form your organization, you don’t really know what’s going

You know there are many successful businesses that said , when they
were asked “Why didn’t you quit?” And the answer that came back to
is “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 inef-
ficiency? It’s when you really don’t know, you don’t have the informa-
tion in front of you available to allow you to process what your busi-
ness 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 really 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 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 in there, spreadsheets, word processors, maybe
some presentation applications. These tools are the epicenter for most
businesses. Aside from email, I suspect that the majority of business
used is primarily word processing. Secondary to that 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 they make $50,000.00 a year, let me say it cost $25.00 an hour.
 Could you imagine the amount of time 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 we
want that employee be able to be productive and creative and stay in
the moment when they’re working on that application. We don’t have
C o d e f u s i o n C o m m u n i c a t i o n s!              Software Licensing

them worry about losing information and knowing that their system’s
are going to crash.

Also we want them using the best tools that are available, the software
that’s got the features that we need today, and generally that’s stay-
ing in touch with the releases that organizations make on their soft-
ware. So there’s something called software assurance. Now, software
assurance or maintenance is to keep you current with the versions of
software that are released. So purchase the licenses for your busi-
ness, make sure that you have a license, the antivirus program. Make
sure that your office suite is licensed, that your operating system is li-
censed. Your Windows or other operating system needs to be licensed
so that you get the security patches and updates.

Your mail server, your server applications, you’re line of business ap-
plications, make the investment. You can amortize this over multiple
years. I recently made a purchase in a line of business application
that if I swallowed the pill up front with the amount of $35,000.00 in-
vestment. However, when I spread that out over five years, this is lit-
tle as $500.00 a month. Why wouldn’t I buy that application?

I really look at the efficiencies it’s going to create for my organization
and I can easily see that type of return on a monthly basis and know
that it’s going to be greater as time goes along.

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, if you’re in business, you need to have licensed software.

  Don’t jeopardize your business, your reputation, your career, by us-
ing unlicensed software. Purchase the best software that you can af-
ford and make sure you use it, learn how to use it and be efficient on
it. Get the support you need so that your computers and your network
are stable so 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, that you have
C o d e f u s i o n C o m m u n i c a t i o n s!               Software Licensing

a dedicated resource of experts that understand how technologies

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. You need a trusted partner that you can
work with so that you can become more efficient at what you do.
 Good business, licensed software, pays for support and is more effi-

In closing, I have one simple question for yoy “Are you in business to
be successful?” You know the answer to that. I’ll be happy to speak
with you about any of the issues covered in this paper. I look forward
to speaking to you. Please contact me , Jeff Brodie. at 416-335-9390.

C o d e f u s i o n C o m m u n i c a t i o n s!           Software Licensing


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