Research whitepaper shows companies using more unlicensed Windows software are at greater risk

Today Microsoft is posting a commissioned study conducted by The Harrison Group to determine whether there is a high correlation between the presence of unlicensed software in mid-market companies and IT related problems those companies might face. Not surprisingly companies that have more counterfeit software in their environment tend to have more IT related problems.

Specifically, the research explores the differences between mid-market companies (organizations with greater than 24 PCs and less than 500 PCs) that are committed to using genuine, fully-licensed software to those that allow unlicensed software to play a role in their firm. The research also explores the differences in IT system failure rates, IT spending, perceived risks of counterfeit software, and fundamental company success measurements.

To capture a strong cross-section of large markets, the researchers evaluated companies in the United States, the United Kingdom, China, and Brazil. Each are equally represented in the whitepaper. The findings outlined are consistent across the emerging and developed markets tested. To qualify as a fully-licensed company, all or nearly all of the PCs and Microsoft Windows software needed to be genuine and licensed. It is important to note that most unlicensed mid-market companies own and often use genuine, properly licensed software, but may not manage their IT buying practices closely enough to avoid being under-licensed.

There were three primary findings:

Companies less committed to using genuine software are much more likely to have system failures, leading to lost critical data and employee downtime. The biggest difference between companies that are committed to using genuine software and those that aren't relates to loss of sensitive data and critical system failures that impact more employees and customers. In addition to the larger likelihood of system failures, companies using unlicensed software also experience system failures more often.

Businesses using fully licensed software report they're growing faster, are more profitable, and are more likely to be leaders in their market as opposed to those using a mix of genuine and unlicensed software. Requiring the use of fully licensed software would appear to be one of the building blocks of a successful business. The rest of the company can't perform to capacity if underlying IT systems are not operating as expected. In addition, the findings show employees at companies not using fully licensed software are more likely to be concerned about their workplace, including taking less pride in the company they work for.

Using only fully licensed software doesn't result in higher IT costs for a business. Spending for both IT and software on the basis of a percentage of business revenue is identical for companies that use fully-licensed software and companies that use unlicensed software. This is most likely related to two major factors. First, failures are more likely to occur in unlicensed environments, driving up costs. Second, in both fully-licensed and unlicensed environments, IT spending generally accounts for a small percentage of total company budget. Ultimately, there is no evidence here suggesting using unlicensed software adds to the bottom line; however, there is plenty of evidence of incremental risk.

To learn more about the full results of the study, download the whitepaper here.

Comments

• Anonymous
  September 29, 2008
  Uh right.  Investigators found that Chinese and Portugese language versions of Windows are at greater risk than English language versions.  What a surprise, not.  Although part of the reason might be because of counterfeiting, I think there's a bigger reason:  the difference between moderately inadequate testing and egregiously inadequate testing.

• Anonymous
  September 30, 2008
  Interesting premise but you guys just don't seem to get it. The problem is still that legitimate people who have been validated as genuine are still being hassled by WGA which can only cause them further inconvenience or the risk of a false positive. Whereas pirated Windows doesn't have to put up with that rubbish. You need to come up with a system that actually REWARDS legitimate users rather than risking penalizing them. The only thing I look forward to on my windows installation when I run a WGA check is "will this lock me out this time?".

• Anonymous
  October 01, 2008
  The comment has been removed

• Anonymous
  October 03, 2008
  The comment has been removed

• Anonymous
  October 25, 2008
  Badly run companies do things that are kinda dumb. This isn't really much of a surprise, as doing things that are kinda dumb is, largely, what makes a bad company a bad company. If your company is kinda dumb and isn't making as much money as it could, purchasing more software licenses isn't going to make it any smarter. What I'd like to see out of WGA is more honesty and less nonsense. This report is nonsence, as it attempts to imply that correct licensing causes busness sucuss, rahter than (correctly) identifying correct licensing as a side effect of good management. Rebranding WGA as Windows Licensing Services (WLS) would be more honest and would more clearly indicate what you are trying to accomplish. There is nothing wrong with a company trying to protect it's revenue or prevent theft. Trying to put a spin on licensing by re-defining it as some kind of advantage is largely why Microsoft gets so much negative press about WGA. We know that it's license enforcement. You know it's license enforcement. All this talk about 'Genuine' and 'Protecting the Consumer' gets in the way of that.

• Anonymous
  October 27, 2008
  196 Microsoft Team blogs searched, 85 blogs have new articles in the past 7 days. 194 new articles found...

• Anonymous
  November 03, 2008
  Hello: I purchased my computer from Goodwill and it already had windows XP installed. I now get the message that I might have a couterfeit copy. How can I resolve this? Will my computer stop working all together at some point? Thank you Jeff

• Anonymous
  December 02, 2008
  Jeff, to recommend the best solution for your situation we would need to know some more information about what is installed on the PC and what system is or was licensed for. I would recommend you click on any of the messages that are appearing that relate to your copy of Windows not being genuine. Clicking on those messages will take you to our website and on that page you should look for the 'Validation Advisor' which is designed to help you figure out if you already have a license for what is installed or a valid license for something else or whether the best thing is for you to purchase a genuine copy. If that doesn't work for you then feel free to contact me directly through the blog here and we can assist you further. Thanks, Alex