Research whitepaper shows companies using more unlicensed Windows software are at greater risk

Today Microsoft is posting a commissioned study conducted by The Harrison Group to determine whether there is a high correlation between the presence of unlicensed software in mid-market companies and IT related problems those companies might face. Not surprisingly companies that have more counterfeit software in their environment tend to have more IT related problems.

Specifically, the research explores the differences between mid-market companies (organizations with greater than 24 PCs and less than 500 PCs) that are committed to using genuine, fully-licensed software to those that allow unlicensed software to play a role in their firm. The research also explores the differences in IT system failure rates, IT spending, perceived risks of counterfeit software, and fundamental company success measurements.

To capture a strong cross-section of large markets, the researchers evaluated companies in the United States, the United Kingdom, China, and Brazil. Each are equally represented in the whitepaper. The findings outlined are consistent across the emerging and developed markets tested. To qualify as a fully-licensed company, all or nearly all of the PCs and Microsoft Windows software needed to be genuine and licensed. It is important to note that most unlicensed mid-market companies own and often use genuine, properly licensed software, but may not manage their IT buying practices closely enough to avoid being under-licensed.

There were three primary findings:

Companies less committed to using genuine software are much more likely to have system failures, leading to lost critical data and employee downtime. The biggest difference between companies that are committed to using genuine software and those that aren't relates to loss of sensitive data and critical system failures that impact more employees and customers. In addition to the larger likelihood of system failures, companies using unlicensed software also experience system failures more often.

Businesses using fully licensed software report they're growing faster, are more profitable, and are more likely to be leaders in their market as opposed to those using a mix of genuine and unlicensed software. Requiring the use of fully licensed software would appear to be one of the building blocks of a successful business. The rest of the company can't perform to capacity if underlying IT systems are not operating as expected. In addition, the findings show employees at companies not using fully licensed software are more likely to be concerned about their workplace, including taking less pride in the company they work for.

Using only fully licensed software doesn't result in higher IT costs for a business. Spending for both IT and software on the basis of a percentage of business revenue is identical for companies that use fully-licensed software and companies that use unlicensed software. This is most likely related to two major factors. First, failures are more likely to occur in unlicensed environments, driving up costs. Second, in both fully-licensed and unlicensed environments, IT spending generally accounts for a small percentage of total company budget. Ultimately, there is no evidence here suggesting using unlicensed software adds to the bottom line; however, there is plenty of evidence of incremental risk.

To learn more about the full results of the study, download the whitepaper here.   

Comments (8)

  1. ndiamond says:

    Uh right.  Investigators found that Chinese and Portugese language versions of Windows are at greater risk than English language versions.  What a surprise, not.  Although part of the reason might be because of counterfeiting, I think there’s a bigger reason:  the difference between moderately inadequate testing and egregiously inadequate testing.

  2. says:

    Interesting premise but you guys just don’t seem to get it. The problem is still that legitimate people who have been validated as genuine are still being hassled by WGA which can only cause them further inconvenience or the risk of a false positive. Whereas pirated Windows doesn’t have to put up with that rubbish.

    You need to come up with a system that actually REWARDS legitimate users rather than risking penalizing them. The only thing I look forward to on my windows installation when I run a WGA check is “will this lock me out this time?”.

  3. egone says:

    You can’t afford to believe everything you read… I been watching Mico$oft since windows 3.0.. With this latest white paper that you might as well uses the paper to wrap up fish from the fish market… This research is like comparing apples to oranges and tell you what is going to kill you first… I just don’t buy it one bit… Vista is a nice operating system but it is NOT the GREATEST Operating System in the world… For one the OS had major problems when it was released. Because they wanted to push it out before giving it full production test… Sure they have the Beta program. Most people don’t give enough information to support the needed fixes or just get ignored until the server fills with error reports from active users. I can be about 80% sure that most of the error reports come from counterfeit software users. Most of the IT Departments I talk to don’t use vista for the fear fact that it will be unstable or will not interface well with XP Machine.. This is the list of business that are still using XP; Citi Financial, State of Vermont, walmart and TD Banknorth etc… Migration for many of these places would worse then the financial… plus how is pirated software any different then tax evasion… no matter who you are you should find out why you haven’t got tax bill to pay to India… and don’t play dumb like you didn’t know you had to pay 57 Million US dollars to India… and stop with re-hype commercials they just show how you guys screwed up windows vista real big to the point nobody wants it. there is reason why we don’t want it and we all seen the results and forums of problems.

    Take care of scareware like Microsoft!!!

    I hope you guys plan on releasing windows cloud with better reviews. 1st impressions are better then 2nd and 3rd impressions…

    just out a little more focus on the next release. Remember the Blue screen of Death on priemer of Windows 98 when trying to plug in a scanner ROFL think about it before you write crap like this problems occur no matter if your legit or counterfeit so get over it and make better piece of crap and in the first place then maybe the world won’t want to pirate the software in the first place.

  4. draitaba says:

    On the other hand, Linux doesn’t have Windows Genuine Advantage. Or invalid licenses. Or random acts of “lost critical data.”

    I also don’t see how having non-genuine Windows leads to employee downtime. What the hell are your IT employees doing if they aren’t fixing broken Microsoft products?

    And quite obviously, holding valid license keys is much more likely to make you succeed in your business field. Things such as innovation, marketing, and good quality products have absolutely nothing to do with it.

    If over 50% of BUSINESSES aren’t buying product licenses, shouldn’t that tell you something about either your software, your prices, or just the general opinion they have of your company?

    I support Open Source. No software costs, license keys to keep track of, and under the hand of a professional they have limitless potential.

  5. rdamiani says:

    Badly run companies do things that are kinda dumb. This isn’t really much of a surprise, as doing things that are kinda dumb is, largely, what makes a bad company a bad company. If your company is kinda dumb and isn’t making as much money as it could, purchasing more software licenses isn’t going to make it any smarter.

    What I’d like to see out of WGA is more honesty and less nonsense. This report is nonsence, as it attempts to imply that correct licensing causes busness sucuss, rahter than (correctly) identifying correct licensing as a side effect of good management.

    Rebranding WGA as Windows Licensing Services (WLS) would be more honest and would more clearly indicate what you are trying to accomplish. There is nothing wrong with a company trying to protect it’s revenue or prevent theft. Trying to put a spin on licensing by re-defining it as some kind of advantage is largely why Microsoft gets so much negative press about WGA. We know that it’s license enforcement. You know it’s license enforcement. All this talk about ‘Genuine’ and ‘Protecting the Consumer’ gets in the way of that.

  6. 196 Microsoft Team blogs searched, 85 blogs have new articles in the past 7 days. 194 new articles found…

  7. jeffblk says:


    I purchased my computer from Goodwill and it already had windows XP installed. I now get the message that I might have a couterfeit copy. How can I resolve this? Will my computer stop working all together at some point?

    Thank you


  8. MSDN Archive says:

    Jeff, to recommend the best solution for your situation we would need to know some more information about what is installed on the PC and what system is or was licensed for.

    I would recommend you click on any of the messages that are appearing that relate to your copy of Windows not being genuine. Clicking on those messages will take you to our website and on that page you should look for the ‘Validation Advisor’ which is designed to help you figure out if you already have a license for what is installed or a valid license for something else or whether the best thing is for you to purchase a genuine copy.

    If that doesn’t work for you then feel free to contact me directly through the blog here and we can assist you further.

    Thanks, Alex

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