ILLUMINATION
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ILLUMINATION

Why Small To Medium Businesses Can’t Afford Licensed Systems

The demographic doesn’t lie when it comes to using counterfeit software systems to operate small to medium businesses.

Photo by Science in HD on Unsplash

One of the ongoing struggles for small but growing economies is that their small to medium businesses can’t seem to afford licensed software services. This has increased the chances of software piracy over the years for consultancies often “helpless” to install such forms of software systems for needy businesses.

The dilemma is that the long term recurring costs for affording systems are unmanageable from cost to profit ratio. Maintaining them is another hassle. In economies where the cost of setting up IT services is the yearly capita of an Individual. Many small businesses either rely on pirated software or custom low-quality software systems to operate. Most international companies who offer IT and cloud-based services are expensive. As some business models just can’t afford it.

Even if we accommodate business functions with services such as FAAS(function as a service) into the mix where small businesses will only be charged when the feature or function is used. Function as a service allows businesses to scale only when they need it and they are not charged for the idle time of software systems.

But still, in the long run, it is extremely costly for small businesses belonging to economies where the cost to operate infrastructure is just that high.

Call it a cheap way of customizing the costs to operate businesses.

Most small businesses try to escape costs by installing software that doesn’t add maintaining costs in the future. They want a “singular installation, one-time fix” for their businesses. Which in terms of software systems is impossible.

As with time these systems breakdown, requirements exceed, bugs render the system unusable. All of this demands either a data backup, followed by a clean install or data migration but I can fairly assure you — how hard it is to migrate data from a pirated corrupted server to a newer one.

A recent report from Microsoft shows that 91% of purchased systems in India have pirated copies of software installed on them. Where Indonesia was 90%, Taiwan was 73%, Singapore was 55% and the Philippines was 43% respectively.

According to the survey carried out by Microsoft— nine South Asian countries including India have a high rate of pirated software on their systems. The worst statistics belonged to countries like the Republic of Korea, Malaysia, Thailand and Vietnam, all of them possessing 100% of the bought computer systems stuffed with Illegal pirated software.

Global Percentage of Pirated Systems on Statista.com

The list goes on, there is a plausible reason why most people would install pirated copies is to save cost to run systems. At most all copies of software that is downloaded online are packed with trojan viruses that hijack personal information to anonymous hackers. There is a high demand for scripted pirated software that is packaged and sold as the “original copy” in many parts of these countries.

Counterfeit Software — An Alternative to Piracy

Some services install this counterfeited software to purchased systems when contacted by the right buyer. In my experience as a systems analyst, I have seen many people who would pay a substantial price just to get their hands on such pieces of software to run their businesses. Many people sell it just like that. And in any scenario, if the software system breaks down — their role is to find the flaws, troubleshoot and fix them.

There is an entire circle of business that runs around the installation of counterfeit software. There are perhaps companies who illegally violate the copyrights of software companies that create such software, and then reverse engineer and sometimes completely rip it off to sell as the original to buyers.

The demand for cheap, accessible software systems is high in these countries. I have colleagues who have shared their personal experiences over the years. The results of such experiences are daunting for the company who actually commissions the software.

Though most businesses that run the software risk of getting viruses, their personal information gets stolen when using pirated software — worse if their system is rendered unusable. Although the chance of something like that happening is minimal at best — when expert pirates commit to implementing such a lucrative solution. They have a fix of everything when it comes to their set of IT skills.

That is how the small guy works, from tinkering with scraps of the big guy.

Purchasing hardware for servers for small businesses can be a hassle but one that they can invest in. Installing the system, however, is a whole story altogether. Hiring a Network Engineer to maintain the system is another trouble that they try to avoid.

Thus using systems that fit their budget is how they do business. They use a mix of opensource and counterfeit systems to make things work. Most costs paid are usually at the end of the month, and sometimes they even rent systems and software from Independent contractors who distribute software systems to government and defence.

Photo by AbsolutVision on Unsplash

Most small businesses mitigate the impending risk such as fraud, data theft and information corruption by using counterfeit software from independent contractors who install and update their systems. This is how the chain works in the world of counterfeit systems. Sometimes the systems are cheap imitations of the real thing but at times they do get the job done, with a one-time license fee. They train the staff and the people who use the software as well.

Their work ethic is the same as people who do real business. And by that, I mean the original contractors who sell Microsoft systems to people and businesses alike. Sometimes, some firms will implement these services on the side to generate extra sources of income through freelance channels. But the income they generate is swept behind the taxes and legal means. Though almost all of the work they do is considered illegal.

But when you’re working in a circle of crooks — no crook will speak nay against the other. It’s how their code goes as they say.

It is how they do business. It is how the world works at least in places where there is income deprecation and software are just downright expensive to install and maintain. One such solution can be if official companies dial down the cost of their services and systems to match the demographic of the country they are selling it to making it affordable for the local market.

But this business model doesn’t seem to be the case for most software distribution companies. Some European companies have monthly system operation costs that are perhaps the average revenue of what a small business makes in a year.

Literacy is another issue, people are not literate enough when installing pirated software. They do it without a care in the world, because there is no law enforced to mitigate their actions. In short,

Nobody gives a shit about software law, that’s the cold hard truth.

They don’t care. One such reason is because of the high cost of these companies selling the official copy for such a high price. It seems an endless cycle for counterfeiting application in all fields of software. Whether its servers, mobile applications, desktop applications, games, services etc…

All of them are counterfeited in this day and age. You can see them in your ads as well as your application stores. They are everywhere. Because there is a demand, and thus they are made to reimburse that demand. People make money and save costs which further drives their businesses.

When an error arises, and it does — they usually call the same IT guy who installed it. They back up their data and keep a spare stash of information saved on a local drive. Thus by taking these steps, they ensure their systems are never halted and optimized to run their daily tasks with efficiency.

The Takeaway

According to recent research on software piracy, Results stated the measures that might help improve controlling piracy are as follows:

  • Maturity of a literate individual, the quality of political governance as well as the economic infancy and development of a country — all contribute towards the impact on the scope of software piracy.
  • Self-aware individuals, higher economic and political privileges are shown to have positive impacts on moderating piracy concerns.
  • Greater dissemination of the Internet and computer technologies, other things equal, actually support the legal use of the software product.
  • Affordable access prices help to reduce piracy and allows users to buy official software.

Overall the psychological, economic, institutional, and technological factors may enforce software piracy laws to some extents. But as previously mentioned, it is hard to implement when there is no proper system to meet the needs of small businesses. Both governments and corporations have to work together to meet the needs of people to defeat piracy.

A question that remains is, who will invest in such a venture to support this cause? to make software readily available to all businesses who require them to function regardless of their size, stature, or revenue.

Until then the market for counterfeit software systems and pirated software is high in demand. Unless there is an intervention from the IT conglomerates, the future of such a system of availability is quite far from happening any time soon.

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Riku Arikiri

Riku Arikiri

It’s never black or white. Sometimes there’s a bit of spicy red in there as well.

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