Big Businesses Taking Risks on Software

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by | May 16, 2016

With the introduction of online retailers like eBay and Amazon, it is almost second nature for any money-conscious individual or business owner to compare pricing in search of a good deal. Unfortunately, when it comes to computer software, many business owners are paying a huge price when attempting to “save” on their software licensing needs.

Imagine going online to Amazon or eBay, searching for business software, and finding the exact product needed at prices that are 40-60% cheaper than trusted distributors like Microsoft or Royal Discount. Sound too good to be true? It normally is; in fact, many businesses have trouble discerning the difference between software that seems legitimate, and software that is actually hacked, compromised, stolen, or worse, just plain illegal.

This happens daily, and most unsuspecting users are not aware that they are taking an uncalculated risk with serious repercussions. The fact that these horror stories typically occur through “verified” resellers with high initial customer satisfaction ratings is enough to make any small business owner cringe at the thought of buying “cheap.” Something must be done, and beckons the question: “How can this happen and how are people getting away with this?”

Surely, Fortune 500 companies like eBay and Amazon must have checks and balances in place to prevent these sorts of risky transactions from occurring, especially on big purchases. Sadly, the answers are not quite so simple.

Why Amazon and eBay’s Model Is Flawed

Popular retailers like Amazon, Google Shopping and eBay encourage merchants and resellers to distribute products through their platform. This concept is similar to that of a shopping mall. Google, Ebay and Amazon are the mall, and the resellers are the stores within the mall. While initial background checks and verification are required to open a “store,” the products themselves are distributed at the mercy and discretion of the reseller, merchant, or store owner. That being said retailers such as Amazon and eBay typically host thousands, if not millions of products, in markets worldwide – which makes the manual review of products slow, cumbersome, and often ineffective in prevention of fraud.

Hackers and illegitimate resellers are utilizing these platforms to push seemingly authentic products to users and businesses at blowout prices in attempts to make a quick buck. The software they sell often works for a short period of time, comes in an OEM/Genuine box and typically includes all of the features found in the more expensive, manufacturer-backed versions. The problem is, after time passes, the software typically expires, has a lack of support, and poses serious security and legal risks. Microsoft actually scans for these products and over time, is known to issue audits to companies suspected of buying questionable & illegal versions. When businesses are caught doing this, they are typically handed an Audit by Microsoft, which forces the user to buy a new legitimate copy of the software (at full price), and costs thousands in fines and lost productivity.

Non-Tangible Risks – Software & Cyber-security

While the aforementioned story sounds like a worst case scenario, the hole goes deeper. Cyber-security threats are at an all-time high. Hackers release stolen and compromised versions of software as a “back-door” into the business infrastructure – giving them access to all of the company’s data. This can be particularly valuable for thieves looking to steal personally identifiable information, credit card numbers, business reports, and other sensitive information that could threaten the operation of a business. While the hacker normally takes a loss on the sale of the illegitimate goods, in return they receive a wealth of information and access that is ultimately more valuable than any front-end sale or profit from the software itself. This poses a huge threat to entrepreneurs, business owners, and ultimately the customers of the business. In fact, globally, cyber-security breaches cost businesses approximately $300B (billion) annually. Protecting company assets has never been so important.

Security and Peace-of-Mind Are Invaluable

It is not unheard of for businesses to spend thousands of dollars on software each year to keep up with the ever-changing demands of a telecommuting workforce. Software can be expensive, and the lure of a good deal can often overshadow sound thinking and research. That being said, the risk of losing the business, time, data, and peace of mind just isn’t worth it – We asked Joel McElroy, Software Licensing Specialist and owner at Royal, an online retailer and distributor of Genuine Microsoft Products, about the importance of buying direct from licensed experts, to which he replied, “Don’t lose big on cheap computer software – the risk of a Microsoft Audit, or worse, a lawsuit is enough to drive any profitable business into severe financial trouble. It hurts me to see customers going to Amazon in search of the cheapest solution, only to find out that they will have to spend double or triple later down the line to clean up the mess. It just isn’t worth it – in many cases businesses are only saving a few hundred bucks in the short term – yet will have to spend thousands when the software stops working, they get hacked, or Microsoft runs an audit. Stay away from deals that seem too good to be true, and read the PRODUCT review ratings, not just the merchant ratings.”

How To Protect Against Fraud

There are many simple methods of prevention – the first is researching the reseller, the product, and comparing SKUs and prices. In most cases, software that is illegitimate will have negative product reviews, further down on the respective product page – a little reading will go a long way. Another simple and effective method of avoidance is buying direct from a Microsoft Partner or licensed software distributor. These distributors will be backed by Microsoft (or the respective brand) and will have seals and certificates on their website(s) to convey this relationship – accept no imitations, they are either a certified partner, or they’re not.

Royal Discount Microsoft Licensing Experts


Questionable Licenses? Here’s What To Do –

For users who suspect that they’ve bought illegitimate or compromised software, work with an expert to self-audit the business before it’s too late. Experts like Royal Discount specialize in helping companies become compliant, minimize their risk, and will work together with Microsoft to ensure the software is replaced with genuine licenses and keys for the affected machines/users. Being proactive and self-auditing can save a company from a hefty fine and gets things back to normal relatively painlessly. When investing in software, don’t take any shortcuts. Ask the experts, and refrain from any deal that seems “too good to be true” – it normally is.


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