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Computerworld - You might not realize it, but two out of every 10 of your co-workers might be using pirated software, according to industry statistics. You might be, too, for that matter, particularly if you work in manufacturing or at a small or midsize company with 100 to 500 PCs. You just might not know it.

Your boss, an IT manager or even the president of the company, on the other hand, may be well aware of the "cost-cutting measure," which typically involves buying a single license or just a few copies of PC software and then installing it on multiple computers for use by hundreds, sometimes thousands, of employees.

According to the Business Software Alliance (BSA), which represents the world's largest software makers by revenue, virtually no organization -- large or small, commercial or nonprofit, governmental, religious or educational -- is immune to software piracy. Some industries, like manufacturing, are heavier abusers, however (see sidebar).

According to a report issued jointly by the BSA and research firm IDC in May, global software piracy last year accounted for 41% of all installed PC software, which translates into a $53 billion loss to software makers. In the U.S., the 2008 piracy rate was 20%, the world's lowest. Even so, the economic loss is a stratospheric $9.1 billion.

The BSA does a lot more than merely study software piracy. The industry group provides education about copyright and software licensing rules, plus it offers sample software asset management policies and free online tools so companies can self-diagnose and address potential piracy problems.

The group also employs a small team of software piracy investigators to follow up on the thousands of confidential leads it receives each year, primarily from IT managers and other IT employees. Computerworld was given unprecedented access to the BSA's Washington-based investigators and attorneys, who explained step-by-step how they find corporate software pirates and what they do once they catch up with them.

How it works

It all begins with a lead like this one, which was submitted to the BSA via its standard online fraud-reporting form (www.nopiracy.com) on July 8 and is now being investigated:

"I was the IT coordinator and questioned higher up why I was installing the same CD on all the computers even though we bought one license," wrote an informant. "[The] response was that [my employer] was too cheap to buy all the licenses."

The informant went on to say that "management knew about the issue from Day One and recommended it to save cost. This was brought up several times among the IT staff and was pushed off, as it was considered no big deal."