Buy cheap, buy twice warns FAST | FAST

Buy cheap, buy twice warns FAST

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Don’t be fooled into thinking that cheap Chinese products are software compliant

The Federation Against Software Theft (FAST) has issued a warning to UK business to check the validity of software licenses before they buy hardware products imported from China.

The warning follows a recent enforcement case FAST was involved with at the London Palace Bingo Club in London. The Club, having moved with the times, had replaced its historic paper based bingo cards with the latest in tablet technology. With over 225 tablets, each running Microsoft Windows and the bespoke bingo software programme, Timeplay Software, the London Palace Bingo Club is proud of the fact that it is at the leading edge of IT in a traditional industry.

Situated at the top of the Elephant & Castle Shopping Centre it is one of the biggest bingo venues in the UK, with seating for over 2,000 people in an area the size of Wembley Stadium’s football pitch!

Over time the tablets were replaced by cheaper Chinese imports none of which had the correct Microsoft licenses. FAST advised the Club to undertake a software audit, which it did in conjunction with SAM specialist Phoenix Software, which worked with the IT director. The Club was reported via a whistle blowers report in January 2013.

Alex Hilton, CEO of FAST, stated: “IDC’s latest figures for illegal software use in China has found that the proportion of PCs using pirated software stands at a staggering 77 per cent. While the Chinese government is doing a lot in terms of promoting software legalisation there is a long way to go. The same report estimates that the illegal software market in China is worth nearly $9 billion in 2011, verses a legal one of less than $3 billion.

“Given the sheer scale of the problem in China itself is it any wonder that exported hardware, such as the tablets at London Palace Bingo, contained unlicensed software. So we would recommend that any business considering cutting costs by buying and using cheaper Chinese products, be aware that there is very often a highly complex and convoluted supply chain with goods passing through several suppliers before they reach the ultimate end user. So we would urge consumers to think again at the very least and check the legality of the licenses any product purports to have. Arguably it is a false economy – if in doubt stick with products from trusted sources.”

Working with the IT director at the Club, FAST identified significant under-licensing of Microsoft products.  As a result it bought a MS Open License for 255 Windows Pro 8 products bringing the Club into compliance.

Chris Pugh, IT Director, London Palace Bingo Club, stated: "We looked at purchasing hardware direct from manufacturer in order to lower our total cost of ownership and believed the pre-installed software was fully-licensed. The information we were given was incorrect and the FAST investigation highlighted the risks involved in dealing direct with manufacturers in China. It was an honest mistake on our behalf and we welcomed FAST's intervention which has improved our understanding of the risks and resulted in positive changes to our procurement process and software asset management."