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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 a commerical value of unlicensed software of nearly $10 billion in 2012.*

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: Properly licensed software creates value for enterprises and economies. For example, a body of research shows that fully licensed software improves productivity and efficiency by reducing exposure to viruses and other security vulnerabilities meaning fewer system malfunctions, downtime, and IT repair costs. It also comes with value-added services such as access to upgrades, patches, and manufacturer support services, including training and problem resolution.

These benefits add up helping firms to reduce costs and drive further investment. That, in turn, delivers more enterprise-level production and, ultimately, national economic growth.

"Global Software Piracy Study," conducted by IDC for the Business Software Alliance, May 2011