Software Piracy At the Beijing Branch Office? 614
spirit_fingers writes "I'm the IT manager for a west coast design company that has a small branch office in Beijing with 5 employees, a few workstations and a couple of servers. Recently, it came to my attention that the Beijing office has been routinely installing and using pirated software on their computers — MS Office and Adobe Creative Suite, mostly. We're very buttoned up about being legal with our software here at the home office, and I consider it unprofessional and risky for our Beijing office to be engaging in this practice. When I called the local office manager on this, he shrugged and replied, 'Well, every other shop here does it.' So I was wondering if there are any IT manager Slashdotters here in the the US who may have experienced something similar with their colleagues in APAC, and how they handle a situation like this." Click the link for more of this reader's thoughts on the subject.
Up until now, the powers that be here in the States have had a relatively laissez faire attitude about what goes on at the Beijing office and our accounting department hadn't noticed that Beijing never submitted receipts for software, until I questioned them about it.
I have no doubt that "everyone else does it" in that environment. Frankly, I could care less what those guys do with their personal computers, but when it comes to company-owned gear my attitude is to stay legal no matter what anyone else is doing. And it's not like they need to do it to save money: the Beijing branch turns a tidy profit. It just seems to be an attitude so firmly ingrained in the culture over there that no one gives it a second thought.
My response (CC'd to our CFO) was to ask for copies of all receipts and serial numbers for the software they're using. and see what happens. This came down today, so I'll give them a day or two to come up with something.
You're too small to be on their radar (Score:2, Interesting)
A few things come to mind (Score:4, Interesting)
Set a policy and enforce it (Score:5, Interesting)
Create a written IT policy for hardware and software. Make sure everyone knows what it is. Create a business ethics policy and ensure that components of it address using unlicensed software. Make sure that your employees are trained on these policies and that a record of training goes into their employee file. If the employees violate the policy, warn them in writing and file the notice in their HR record. If they violate the policy again, fire them. If they want to keep their job, they will fall into line and stop exposing the company to unnecessary legal risk.
I'd go the other way, personally (Score:3, Interesting)
I'd say trying to get some people in a third-world country to pay rich American monopolists extra money is an immoral act.
Re:Given it'smostly MS Office and PDF stuff.... (Score:5, Interesting)
But I'm curious -- did you actually get that multi-national company to use any open standards, or are they still doing Exchange and Word?
I tried, but failed badly. I was with them from 1996 to 2002; and in late 2000, the MNC entered into an alliance with Microsoft globally, to use Windows and other Microsoft products. Initially I joined them to set up an SGI-based development network on IRIX and OGL; this was disbanded in 2002 and I quit.
My impression is that in many Western economies, the pricing for Microsoft products isn't that big a deal; so people tend to think of it as a problem that will disappear if they can throw some money at it. But on Server products, things got very expensive and complicated with Craptive Directory and Exchange 5.5; so many Directory Service Replication errors, and a nightmare for the sysadmins. It's like a treadmill... we need to keep running (upgrading) but seldom move forward.
this is usual... (Score:2, Interesting)
Re:Given it'smostly MS Office and PDF stuff.... (Score:5, Interesting)
I have to admit I smiled a bit with joy when that happened. :-)
Re:I'd go the other way, personally (Score:1, Interesting)
And if the whole point of off-shoring work to an office in China is because it's cheaper, are these hidden costs factored in?
[Disclaimer: my project was recently off-shored to China.]
Re:He's Right (Score:5, Interesting)
Not everyone does it, as well as being illegal it's a big reputational risk. Living in China I find it quite fascinating seeing the differences large international companies, small international/foreign companies, and large/small local companies work. This topic is an example of such.
[Cue Slashdot car analogy.] Large international corporations often do not let their senior foreign staff own a car, even if such staff state a preference to do so. A rented car and driver are cheap. The risk to the reputation of the company (and international companies often hire on their reputation for being well backed financially, esp. in white collar sectors) should a senior staff member have a well publicised accident are sufficiently high to cause this behaviour. Many more examples exist.
Aside from other concerns like IT security, backdoors in commonly pirated software, lack of availability of software updates, the reputation with the OP's customers is at risk. Perhaps that is how the home office could be persuaded to put some force on the foreign office.
Outsourcing brings with it cost cutting - legal software may appear highly expensive to the overseas office. It MAY BE THE CASE that the manager of the overseas office is pocketing the money, or will pocket the money if legal software is demanded, and providing fake receipts. This is not unusual. The home office should audit all software. China provides an environment where QQ (a hugely popular instant messaging program) or other software may be installed on machines and local IT/security staff have lower standards than that of the home office. Again, an audit and remote administration should be mandatory.
I would point out that this case is not unique to China, all developing economies share work and cultural environments which may surprise, disorientate or confuse the home country office. A professional consultancy* can often be hired at good rates to ensure best practice is maintained in any developing or unfamiliar situation, helping to avoid potentially costly mistakes and lapses in judgement.
*I run such a company but I'm not going to astroturf. Slashdot is for my fun time.
Re:He's Right (Score:5, Interesting)
Bollocks. Never seen it, or heard of it, except from software vendors trying to scare people. And I live in Hong Kong and have seen a fair sample of pirated software. Pirates are actually pretty good at customer service, most give full refund or exchange on demand. They have no interest in selling infected software, it would just rebound on them. Can't say it never happens, but there has been plenty of infected factory fresh legal software. The risk is not larger, in my experience.
Re:The company's policy (Score:1, Interesting)
now tell me please how tracking the legality of software used in the company creates any added value ? I mean the job of tracking licences and other legal shit is completely useless work that noone is interested in. It only becomes an issue if you are going to get sued for using pirated software which appears not to be the case in china so who cares ....
Re:He's Right (Score:5, Interesting)
When you say unfair to usa, you forget that those pirated softwares are exported using US prices, being charged to india/china/russia/brazil salaries.
A single copy of a software may cost as much as one year of an employee's salary there.
Re:He's Right (Score:5, Interesting)
Re:He's Right (Score:2, Interesting)
No I'm not. Let me quote it again:
Outsourcing is just another commodity in this "Free Trade" world that is unfair to the USA. How can USA companies and their employees compete with people who steal?
Mind you that realities are different. The cost of pretty much everything in a place like the aforementioned places is way lower, being the salaries lower as well. That's why good food seems almost free for a 1st world tourist in those places.
But this reality is not passed to software. American companies outsource jobs to those places exactly because they're cheaper, but charge their software the same.
When I was a grad student there, I couldn't afford even the educational prices for an office license. So I tried to convince my teachers to accept the broken .docs that openoffice 1.x did at that time with little success. I eventually had to pirate it myself.
Now I can afford iWork (and a mac anyway), but that's because I live in europe. I would pretty much doing the same thing if I was there, because I need to, not that I want to.
Re:He's Right (Score:4, Interesting)
Re:He's Right (Score:0, Interesting)
Re:I'd go the other way, personally (Score:4, Interesting)
"Maybe we should stop paying for Chinese goods?" Uh, I think we're already doing that. And just to be Democratic about it, we've stopped buying everyone else's as well. You might have noticed the global slowdown and other countries blaming the U.S. They are correct, the U.S. people are officially tapped out, spent, broke, going back to basics and saving their money. And the rest of the world is livid about it.
Gerry
Re:Let the directors decide. (Score:5, Interesting)
If the people using the software have no qualms in contacting the developers directly, then it seems to be a fairly entrenched problem that's going to take an awful lot to stamp out. Whilst talking about this topic many people may think 'windows+office' the fact is that piracy is affecting every developer large and small (and I work for a small one). I applaud anyone who takes an interest in stamping the problem out at their office, though unfortunately it's not going anyway anytime soon...
Re:No cross-culture training in your company, eh? (Score:3, Interesting)
No, it was an attempt by the original poster either to use some buzzword acronym, or perhaps to avoid seeming to be racist by using the word "Chinese". Certainly APAC includes China but it also includes many other countries where patronising its people by giving them a lecture about "how we do business in the USA" would be both unnecessary, inappropriate and offensive. (Of course Chinese would probably also find it insulting, but I'm just speaking as an Australian.)
Re:I'd go the other way, personally (Score:3, Interesting)
This is a cold-war-era classification, but "third world" has become such a common way of saying "poor country" that it stuck. However, Mao Zedong had its own classification, in which China was still in the third world:
He's Not Right (Score:3, Interesting)
Re:He's Right (Score:5, Interesting)
Yes copyright infringement is theft of labor. It's no different from if you hired an employee to mow your grass, and then you refused to pay them.
There are more than two things happening. You are seeing the fruits of the labor, and the money changing hands. You're overlooking the work your neighbor put in to mow your lawn. The difference with software is it's not like mowing a lawn. With lawn mowing, every x units of work you invest get you paid for x units. If you mow 2x lawns you get paid 2x. There is always a 1:1 investment, and anyone that fails to pay you directly impacts you, in two ways. One, you worked, and two you missed an opportunity to work for someone else (lost a sale) because you were busy mowing the deadbeat's lawn and couldn't mow the other guy's lawn that would have paid you.
Software development is a whole different business model. You invest y units with development and marketing, and then you sell x units and get paid x. If you sell 3x units, you get paid 3x. Once you've spent y, changes in x have no affect on y. You can increase your x beforehand by pouring more money into y with continued marketing and development, but it's nowhere near a 1:1 relationship. If somewhere along the line you sell another 1x units and don't see the payment of 1x, it doesn't even appear on the books so to speak. It's "icing on the cake".
Theft is usually described as depriving someone of their property or failure to compensate them for their labor done for you. (often referred to as "theft of property or services") We can clearly see no deprivation of property, so the question is one of labor. How much labor did we fail to compensate you for by copying that application? (how much additional work did I just cost you by copying the application instead of buying it?) None.
If you don't pay your neighbor for mowing, he's wasted his time when he could be mowing someone else's lawn and getting paid for it, or he could be doing some other work, or he could be relaxing. You've clearly affected him. But if this morning I install this single license on a second computer over to the right, I haven't affected Adobe in any way this morning.
The only way to justify it is to say that if I hadn't copied the app, I would have bought it. OK that could be viewed as theft of a sale. But that always has to assume I would have bought it. While sometimes this assumption is true, often times it's not. We see that a lot with copying music. When I see someone with 350 albums of music on their 1T hard drive, do I really think they would have bought 350 CDs if they hadn't been able to download them? Isn't that just a little bit ridiculous? I'm not denying the possibility, but it's nowhere the scope imagined. That same person may have bought a dozen or two dozen CDs or more even, but not 350. Software I'd expect to be much the same.
So there are two important differences - copying doesn't have the same direct impact to the vendor as theft, and copying does not necessarily imply a lost sale.
It's here in the states too (Score:1, Interesting)
A few years ago while I was IT Director, a Vice President of the company told me they don't pay for Microsoft Office. He said they are an imaging company so it's not hard for them to just copy Office. He was confused about why I should care. He said Bill Gates is rich enough and I should be glad for the opportunity to stick it to him.
I solved the problem. I told him I wouldn't do it. I told him if he sent me an email telling me to do it I would be more than happy though. He started to stutter and stammer and I said very upbeatly, "Just send me an email!"
I never got the email. He never mentioned it again. I switched everyone in the company to OpenOffice.org except a handful (himself included) of users who had legit licenses. The few that didn't I purchased legit copies for.
I worked for the company for another 3 years, during which the VP was eventually fired for having an extramarital affair with one of his subordinates.
Re:No cross-culture training in your company, eh? (Score:3, Interesting)
No, it was an attempt by the original poster either to use some buzzword acronym, or perhaps to avoid seeming to be racist by using the word "Chinese". Certainly APAC includes China but it also includes many other countries where patronising its people by giving them a lecture about "how we do business in the USA" would be both unnecessary, inappropriate and offensive. (Of course Chinese would probably also find it insulting, but I'm just speaking as an Australian.)
Now that I see your point I have to say that you are absolutely right. I focused on the topic of this discussion (the company with the 5+ employee office in China) and kept thinking that by "APAC employees" he was referring to those 5+ in the China office. After looking at the big picture then it becomes pretty clear that the comment in fact sound patronising and conveys a bit of the old proverbial colonial attitude.
Re:He's Not Right (Score:3, Interesting)
Your analogy is just as flawed as that of stealing from a grocery store.
Software, unlike groceries from any source, has an immense up-front development cost, and in many cases a substantial ongoing cost (several posters have mentioned the huge number of support calls they receive from countries where their software isn't even sold...) Those costs represent a major investment. Selling the software is how you get a return on that investment.
Pirated software doesn't inherently increase the developer's costs directly, but it decreases their return on investment, which is very similar. Factor in support calls and it can become a significant cost, but even without that piracy can be a major problem for a software shop that in unable to produce sufficient revenue to recoup costs.
Re:He's Right (Score:3, Interesting)
are photoshop, SQL server, office and windows 7b1 "a true necessity" ? Even when linux/gimp/OO.org do exist (not are completely equal, but do exist) ?
Food or shelter is something different here, and of course "it's OK" can be taken from the law or morals.
Re:He's Not Right (Score:3, Interesting)
in Star Trek, the needs of the many, out weight the needs of the few or the one. Open Source would rein _the_ way software was done, not the One Microsoft Way way.
LoB
Re:He's Right (Score:4, Interesting)
Heck, there's a clone builder a few miles from where I work (in Michigan, in the US) that used to (10 years ago) load up EVERY machine that they sold with pirated Windows and tons of software (games, Office, etc). You got a 20 GB hard drive on it (this was a while ago) it was half full of pirated stuff.
I helped a friend spec a machine there, and we told them that we needed legal copies of Windows, Office, and one or two other things, and we did NOT want any other software on the machine. It took them a week to get the software (they didn't have a SINGLE legal copy of Windows or Office in the building!) and they totally screwed up the install, because they normally just Ghosted in the OS (with a pirated copy of Ghost I'm sure) with all the pirated crap on it, and they weren't used to doing bare-bones installs on fresh machines. I wound up having to reinstall everything myself.
This was a place that sold a few thousand PCs a year, with a storefront, in the US. And they did it for years, and I never heard of them getting in any trouble over it.
Re:Whoa, steady now (Score:1, Interesting)
China is well known for using corporate (and other) espionage to further their political agenda.
Really? It isn't well-known to me, among others. You see, when you make a claim like that you need to be able to prove your case. Otherwise it merely ranks as "smug ignorance", on par with all the other prejudices - such as "all muslims are terrorists" or "Jews are money-grabbing misers".
It's well known. You are either massively ignorant or lying. And no, it's not the same.
Thinking realistically about states that have no concept of law superior to the most powerful man is nothing like prejudice against people groups.
Probably it's pointless to say that here, since the filter that determines whether I am heard is evidently comprised mostly of people who have no concept of truth superior to the most powerful opinion.
And, you might be right- if you suck up enough and hand them your country, maybe the red guards won't shoot you first.
Re:He's Right (Score:4, Interesting)
There can be a lot of politics and cultural issues involved here.
I've known people sent to foreign plants with a mandate to institute some change, and they've made changes to the plant design only to come in the next day to find those changes reversed. The changes were made again (with managers nodding the whole time) and again the changes would be reversed overnight. Said changes involved welding pipes and adding hardware and stuff like that (this was a chemical plant). It was apparently something to behold. In this case the cultural issue was that "yes" meant "yes, I understand" and not "yes, I agree." Having traveled a little to asia on business myself I've encountered similar situations (not to this extent).
Rarely will company senior management step in on something like this, unless there is a real cost to the company involved. They just care that they can say that they're outsourcing x% of their work or whatever the driver is. As long as those Chinese branch workers are selling product or are being paid less or whatever the driver is, the office isn't going to be closed. And if the branch office manager was hired because they're friends with the local party leader then good luck getting rid of him.
Business in China doesn't always work the same as business in the US. The cultures are very different. Sometimes you need to put your foot down, and sometimes you need to decide if a hill is worth dying on...