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Time to audit your software and cough up for licenses

By Glenn Mulcaster

Flexibility in software licensing is a big requirement for small Web firms that work on cross-platform projects.

Damian Anderson, co-founder of Crank Media, the Hobart Web design house and content developer, says small companies are often excluded from discount licensing plans aimed at large-volume buyers of software in corporate or educational sites.

His company, which has a dozen staff and about 30 computers for development work, was recently exposed by an anti-piracy software group for running unlicensed software on some of its internal systems. The company runs a mix of Windows and Macintosh systems.

The Business Software Association of Australia (BSAA) is a group formed by the local subsidiaries of US software companies Adobe, Autodesk, Macromedia, Microsoft and Symantec. It is affiliated with the Business Software Alliance which operates internationally on behalf of North America's largest software application publishers. The BSAA starts a campaign next month in Australia to encourage small companies to cough up for software licence fees. It issued a statement last week explaining that Crank Media and another Tasmanian developer ICS Multimedia, also of Hobart, had been caught using illegal software.

Anderson accepts the rebuke by the BSAA and says Crank should have heeded calls by the software industry to get its licences checked before it was tapped on the shoulder last year.

"There was enough publicity about the BSAA campaigns last year," Anderson says.

He says Crank was conducting a software audit about the same time as the BSAA's first contact. The association received a tip-off that Crank's software was not all legitimate and sought an explanation.

Meanwhile, Anderson says, Crank uncovered some copies of Macromedia and Microsoft software that needed licences and had ordered about $8000 worth of software licences. The BSAA separately demanded money for licences and damages on behalf of the software publishers. Crank called in the lawyers before agreeing to a $10,000 settlement.

Anderson says software auditing is one of the key quality assurance issues Crank identified last year when a consultant prepared a business review of the company.

Anderson says there was no deliberate attempt to avoid software licence fees; it was simply a case of the small company growing quickly and being focused on output.

He says Crank maintains a good relationship with software publishers such as Macromedia and is a participant in the local Macromedia Users Group which met last week in Hobart.

On the same day Macromedia Australia's technical and developer relations manager met with Crank in Hobart to discuss licensing and development issues.

"This was all sorted out last year from our point of view," Anderson says. "It's business as usual for us."

The company is one of four Australian developers working on a national online education project managed by a national group called the Le@rning Federation.

The bulk of the work undertaken at Crank will be built using Macromedia's Flash.

John Treloar, managing director of Macromedia Australia, said his company had changed its licensing structures about nine months ago to help smaller purchasers. Previously, volume discounts applied only to companies that bought a minimum of five licences for any software titles. This was not helpful to Web design houses that would require only three or four licenses.

Macromedia publishes software including Flash, Dreamweaver and merged last year with Allaire, publisher of Cold Fusion.

Treloar says it is easy for software developers and Web designers to overlook licensing issues but often a simple software audit would reveal that a company has too much software.

Anderson says it is difficult for companies to monitor software when different projects required multiple licence purchases across multiple computer platforms and some of the licences were bought for only a small component or feature of the software suite or toolkit.

Large corporate buyers sometimes turn to multi-vendor software distributors or volume licensing managers such as Express Data, Data#3 or Spectrum Software.

Treloar concedes smaller companies cannot often justify hiring a third party to manage the licensing arrangements.

He says legitimate buyers of software did not want to be at a disadvantage to their competitors when they are all using the software to do business.

Treloar says he visited a data centre in Melbourne recently and was told Cold Fusion was running on a whole rack of servers.

"I pointed out they only had a licence for two or three servers and within a few days they updated their licences," he says.

"It's easy for us to check on Web servers that use Cold Fusion because we can do a Google search and look for .cfm files on Australian domains."

Treloar says if he could reduce the amount of his company's software being pirated in Australia, estimated at between 50 per cent and 66 per cent, he could employ at least three more staff.

He believes many Web designers felt they were being disadvantaged in competitive tendering. "Some of them look at the prices being quoted for development work and wonder if their rivals are 10 per cent cheaper because they aren't paying for the software," Treloar says.

First published March 26, 2002

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