Software Licensing

In the first ever, “Did You Know” article, we will be discussing the topic of Software Licensing.

In my 20+ years in the field of Information Technology, this is a topic that I have faced quite often. It is also a topic with many different views, questions and practices. Therefore, I decided that it would be a good idea to cover what I’ve learned. Consider the following scenarios (of which I’ve seen all of them).

Company X has already made their money, so it’s ok for me to install the ONE copy I purchased on multiple computers.

WRONG! This may seem like a very obvious nono, but I actually experienced this at a client site by someone responsible for purchasing and managing software analysis. This particular person was a huge proponent of Company A over Company X. At the time, Company A was MUCH smaller than Company X and this person spent most of their yearly budget with Company A’s products.
DO. NOT. DO. THIS! First of all, if Company X does in fact have all that money, do you really want to challenge their legal teams? Second, where is the morality in this? As a small business owner, do you intend to sell to a current dollar amount and then just allow people to steal from you? And finally, legally, when you purchased that software, you also agreed to the terms of its license.

I don’t have enough money to buy a copy of this software for each computer I own, so it’s ok if I just install it on every computer as long as I only have one copy running.

The answer to this one is usually a big NO. However, in the age of digital content delivery, there can be a grey area here. In the early days, each copy of the software was licensed to only ONE computer, but in the subscription software model (or SAAS: software as a service), this isn’t always the case. For example, Microsoft Office 365 allows for one “subscription” to be installed on several devices.
If you’re unsure, read the license. SAAS often requires you to register each install online and will prevent you from installing on multiple computers.

My laptop died and I bought another one that had an older version of the operating system installed. I’ll just use the media from the old laptop on the new one.

If we’re talking about Microsoft Windows, then WRONG! DEAD WRONG! I’ve seen this much too often with Microsoft in particular. With MacOS or Linux, this isn’t such a big deal because MacOS is required on a Apple computer but I would still read the license or check with Apple as things can always change.
Returning to Microsoft, you are purchasing a computer that had Microsoft Windows preinstalled, you CANNOT transfer that software to another machine. It specifically states in the license agreement that this is prohibited. (See THIS DOCUMENT directly from Microsoft) It is for this reason that most of my computers currently run Linux–because the original software licensed to run on them is too old or I have built the machine from scratch.

I upgraded the motherboard in my computer to a newer model but everything else is the same, so I can just reinstall Microsoft Windows!

WRONG. The link in the previous answer covers this as well. The motherboard is ONE critical component of the computer requiring a new license of the Microsoft Operating system. This of course does not apply if the motherboard was replaced due to defect with the same model motherboard.
Thankfully, in the last 10 years or so, OEM systems (Dell, HP, etc) have started putting information in the BIOS (primary firmware of the computer) with even the Operating System install key/license. So, if you have an install disc for these systems, you often won’t be prompted because the motherboard won’t allow you to install without a new software key unless you’re using the exact version of the software.

Laptop A came with Microsoft Windows Home Edition, but I want Windows Professional. Laptop B is broken and had Professional so I can “swap”.

WRONG! Again, the above link applies here as well. I specifically included this example because I have seen it in practice. I’ve seen technicians cutting the OEM key off of the bottom of broken machines and tossing them in a drawer so that they have “extra” copies of their preferred version of the operating system to install at will.

I’m a small company, I’ll never be audited, so I can do what I want.

WRONG! Always err on the side of caution. You may get away with it for months, years or may NEVER get caught. However, if your morality doesn’t preclude you from violating the lessons, remember that there’s always a risk and the financial consequences can be devastating.
I have had several contracts in the past where my sole responsibility was to visit each and every computer in an organization and audit the software installed. There is software out there now that can do this much faster, so the chances are, you will be caught.

Know the Facts

I have seen all of the above scenarios in practice over the last 20+ years. In the event that ANY of these employers, customers or clients were audited, they would be in big trouble and face hefty fines. Very few of us do this, but read your software licenses and know your restrictions. In my case, Linux and Open Source software is often the answer due to financial constraints, but a steeper learning curve or working around the limitations in free software beats the possibility of being caught in violation.

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