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.