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BLOG: Doing things the ‘right way’

Aaron Tan Dani | Nov. 4, 2011
New laws are eliminating the unfair advantage created by illegal business practices.

As children, one of the first game-playing skills we learn is the ability to cheat - surreptitiously moving our game piece out of turn, peeking at the other players' hands or downloading the codes needed to use illegal copies of our favourite video games. It's part of our nature as humans to seek an advantage over those whom we're competing against -- even if that means breaking the rules. 

Within the business world, this behaviour earns labels such as collusion, insider trading, fraud, and theft. The mechanisms used include practices as diverse as stealing trade secrets, the use of child labour, or the dumping of hazardous waste. Each of these practices is illegal, and the victims of each are fairly obvious, for which reason the enforcement of such crimes is fairly common.

These all share the same motivation as cheating at a childhood game: to achieve an unfair advantage over competitors. There's another business practice that stems from the desire to compete, which is at least as rampant and just as illegal: the use of stolen software.

According to the Business Software Alliance, the commercial value of unlicensed software installed on personal computers in the Asia-Pacific region reached a record US$18.7 billion in 2010 as 60 percent of software deployed on PCs during the year was pirated, more than double the losses of US$7.5 billion in 2003 (Source: http://portal.bsa.org/globalpiracy2010/downloads/press/pr_asia.pdf)

Admittedly, the financial benefits of using stolen software can be great. Rough estimates suggest that doing so can increase your profit margin by as much as a third. 

For many years, multinational companies have relied on the services of contract manufacturers in Southeast Asia and have benefited from lower costs that stem in part from the manufacturers' use of stolen U.S. technologies. Some of these companies may have been complicit. Others may have merely turned a blind eye or been blissfully unaware. 

But when the tables are turned, companies that rely on unfair business practices as their competitive advantage may suddenly find themselves at a competitive disadvantage.

Businesses need to ensure that their IT architecture not only stands on solid footing but also one that is flexible and scalable enough to grow with the business. The easiest way to enable this is to build your IT architecture with genuine software.

New laws to promote fair competition

New laws in the states of Washington and Louisiana in the U.S. suggest that the tables are definitely turning. Under these laws, no longer will companies be free to engage in illegal practices in order to cut costs and under-price their law-abiding competitors.  Furthermore, the Washington law imposes limited responsibilities on companies for the illegal practices of their contract manufacturers. If a contract manufacturer is discovered to be using stolen IT, then the company that hired the manufacturer may need to take steps to rectify the situation in order to avoid any impact. Within this context, companies that use pirated software may become considered as more of a liability.

 

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