The Bloor Perspective: Criminal licensing, dot-com job trends and government IT winners

The Federation Against Software Theft (Fast) has recently reported the majority of businesses in the UK still fail to understand the full implications of software licence conditions.

The Fast report found around two out of every three companies admit they do not believe they are managing to reach total compliance with software licence requirements. This is despite the number of organisations being reported for non-compliance rising by some 12 per cent in the last year.

Richard Willmott, head of Fast Corporate Services, has reportedly stated: "The figures made alarming reading. Put simply, non-compliance is a criminal offence. Company directors are criminally liable. We simply cannot believe that nearly two-thirds of companies we contacted have just not taken this issue seriously."

This is the point of which most senior business managers appear to remain completely unaware. The legal liability for the illegal use of software applications on corporate computers rests with the board of directors. If found guilty of non-compliance, the board is criminally liable.

Alas, the PC is sill regarded as personal property by too many users, making the effective management of the machines difficult to administer without very strong top-level management support. Asset management tools such as those supplied by Centennial, MainControl, Peregrine, PS'Soft and Tally exist that address the very topic of software licensing. Indeed, such asset management technologies enable organisations to manage all IT assets effectively, especially licences, reducing the lifetime costs associated with running all computing devices.

Asset management is rightly placed at the heart of the IT Infrastructure Library's (ITIL) management philosophy. Perhaps businesses still believe that licence management is not important enough to spend time and money on, or they think that they will not be caught. However, breaking the law cannot be condoned, especially when the cure (asset management) brings so many other tangible benefits (including saving money).

If organisations don't want to implement effective PC management, perhaps they should simply move on to a thin client, otherwise known as server-based computing, architecture saving themselves time, money and avoiding the risk of being branded 'criminal'.

*The last of the job cuts?*

According to the outplacement firm Challenger, Gray and Christmas, the number of US dot-com job cuts in February 2002 was 670, the lowest since April 2000 when 327 jobs were lost and 62 per cent lower than the 1,802 announced in January 2002. Peaking at 17,554 in April 2001, the figures have fallen every month since, expect for October.

In the broader job marketplace the same firm reported the number of job cuts has fallen from 212,704 in January 2002 to 128,115 in February. Other figures to note from the report are that February 2002 was the fourteenth month out of the last 15 when cuts have exceeded 100,000 and that prior to December 2000, cuts of six figures had only been reached on four occasions since 1993.

Obviously, this is good news but there are still plenty of people looking for work. Statistics earlier in the year indicated that the number of job adverts were on the up - again another indicator of recovery. But the question is how many of those positions are actually being filled?

Even with the cuts, many companies - especially some of the IT services vendors - have people sitting on the bench and so most prospective jobs seekers will be coming up against the internal candidate. Although they may not have as much relevant experience as those from outside, the internal candidate has the benefit of improving head count utilisation and will undoubtedly be far cheaper than getting someone in from outside. So being able to spell their own name puts the internal recruit at the top of the pile of applications.

Those companies that have the vision to look outside their own four walls are still stalling on recruitment. Once bitten, twice shy means that companies need to see positive signs of recovery before sending out the offer letter.

Another adage says that fortune always favours the brave and so when the upturn comes it will be those with the foresight to look outside the box in their recruitment strategy which will be best placed to take advantage of new opportunities.

*UK e-gov contract winners*

The UK government has announced details of a public sector-wide software licensing agreement with IBM, Microsoft and Sun Microsystems. The deal attempts to aggregate the demand for the software for the whole of the UK public sector.

The products covered by the announcement include systems such as Microsoft Office and Windows, IBM's Lotus products and Sun's StarOffice. Office of Government Commerce (OCG) officials, who negotiated the deal, claim that it will save the licensees around £100m over the course of the next three years.

The deal builds on top of recent agreements between Microsoft and the National Health Service (NHS) and the Ministry of Defence (MoD). Peter Gershon, chief executive of the OCG, said: "This will provide more choice in the marketplace and improve value for money for public sector customers."

It is interesting that it has been reported that Microsoft were 'forced' into taking part in the agreement only after the government warned that it was considering "fallback options" in the event that the Seattle giant declined to take part.

The deal covers all areas of the public sector except for regulated utilities and industries such as the BBC and Consignia (Post Office). The NHS and MoD will be able to transfer to the new agreement from their existing deals.

It will be fascinating to see how public bodies act upon this agreement. With no details available concerning the pricing structures to be utilised we shall have to wait and see which applications will be utilised by public sector IT managers. Will MS Office continue to hold sway or can IBM's SmartSuite pick up users or will Sun's StarOffice take over?

One thing is clear though. With more and more public agencies investigating alternatives to both Microsoft Windows operating systems and Office applications, Microsoft will almost certainly have to settle for a smaller chunk of taxpayers' money over the next few years.

Bloor Research is a leading independent analyst organisation in Europe. You can find out more at http://www.bloor-research.com or by emailing mail@bloor-research.com .