Software piracy — the intentional or unintentional use of unlicensed software — is widespread in this country and its impact is far-reaching. Approximately 21 percent of software in the United States is unlicensed, which resulted in more than $6.9 billion in losses to the U.S. economy in 2005.*

Software piracy poses a risk for all companies, but particularly for small businesses. The risks of noncompliance are severe and can result in legal, financial and technological damages:

Legal: Software piracy is illegal, and offenders may be held liable under both criminal and civil law. In the most serious cases, individuals caught selling or using illegal software may face jail time. In 2006, Danny Ferrer of Lakeland, Fla., was sentenced in federal court to six years in prison after he was found guilty of selling more than $4.1 million worth of illegal software.

Financial: While some people think they are saving money by using unlicensed software, the costs of being caught are far greater than purchasing software legally. Financial penalties for using unlicensed software may reach up to $150,000 for each infringement, not to mention legal fees and lost revenue. American businesses have paid more than $139 million to BSA to settle software cases since the organization began its U.S. settlement program in 1993.

Technical: Businesses that do not use fully licensed software are not eligible to receive technical support or software updates. Additionally, pirated software may be incomplete or otherwise damaged, resulting in inferior quality and performance. BSA members have reported that pirated copies of their software have been degraded so severely that they produced inconsistent, inaccurate or even unsafe results.

"Global Software Piracy Study," conducted by IDC for the Business Software Alliance, May 2006