Q&A: After Software Piracy Raid, Ernie Ball Rocks On Without Microsoft5:54 PM EST Fri. Oct. 19, 2012
On a quiet Friday morning in 2000, the headquarters of Ernie Ball Inc., a popular guitar string manufacturer in Coachella, Calif., was suddenly raided by armed U.S. Marshals. The federal agents weren't looking for drugs or firearms or fugitives.
They were searching for unlicensed Microsoft software.
The agents seized the company's computers, shutting the business down. Sterling Ball, the company's owner and president, later learned the federal agents were acting on behalf of the Business Software Alliance (BSA), which received an anonymous tip that Ernie Ball Inc. was using pirated software inside the company. [For more on software piracy, check out the CRN iPad app exclusive "Software Piracy: Are You A Trusted Adviser Or An Accomplice To A Crime?"]
Sterling Ball was incensed, and what happened days later made him even angrier -- the BSA and Microsoft began running anti-piracy marketing campaigns that named Ernie Ball. Feeling betrayed and smeared, Sterling Ball swore off Microsoft and pledged to replace all of the vendor's software with open-source alternatives. More than a decade later, Sterling Ball is still recognized as a champion of open-source software and as one of the most vocal critics of Microsoft's and the BSA's anti-piracy efforts.
"I would have liked for some other things I accomplished to be on my headstone," he said. "It still bothers me to this day. But after we went open source, life's been just wonderful."
Ball recently spoke with CRN about that fateful software raid, his transition from Microsoft and his thoughts on open-source alternatives.
Take me through what happened the day you got raided.
I wasn't in the office. It was Friday at 10 a.m., and I got a call from someone who said "Armed U.S. Marshals are here; they've down and seized all our computers." They shut my business down. And there were armed federal marshals. If they say there weren't, well, I disagree.
Had you received any kind of notice or warning from Microsoft before the raid?
We never heard anything from anybody until they barged in on us that day. And they had to be disappointed with what they found.
What did they find?
I think we had 70 or 75 computers. And, they maybe found a dozen computers with software on it that shouldn't have been there. So for example, the receptionist has a computer that the engineering department used to us, and it had an [Autodesk] AutoCAD program on it -- but she obviously wasn't using it, and we could prove that it hadn't been accessed in years. But, that's a violation to them. We made mistakes not wiping our computers clean, but I didn't feel very good paying that much money to the BSA for such a small amount of stuff that was out of compliance, especially when it wasn't even being used.
And, let's talk about how the BSA found out about us. They got a lead on me from an idiot disgruntled employee. The BSA had billboards for "Nail Your Boss!" and they used to advertise on websites like Monster.com. Now, I don't believe anyone should be stealing intellectual property. I make and create stuff for a living and have a career based on intellectual property. But, there's a difference here -- if you're intentionally trying to defraud Adobe and Microsoft and Autodesk, then I've got no sympathy for you. But at the same time, with all those millions of dollars as a nonprofit, what is the BSA really doing to make things better? Why don't you do something good with the money besides using it for marketing for more tips?
NEXT: Moving On From Microsoft
What happened once you started negotiating with the BSA? How long did it take?
It took about six to nine months. We never dealt with the BSA, only the lawyers they used. They got a lot less than the original number they wanted from us. We ended up paying $90,000. I wasn't a struggling guy; I had a longtime family business with some net worth. At the time in 2000, we had been in business for about 38 years. We are a solid business with no debt. But, it took everything I had to fight the BSA and make that settlement. It was wrong. They pissed me off. If I was a bigger business, I could have fought them more.
And, I'd like to point out that of that settlement fee, $35,000 was for legal fees -- and that was the only number the lawyers refused to negotiate [The BSA says it doesn't comment on specific details regarding settlements or audits]. My business is so much bigger since then. It was such an insignificant cost. And, it's not the software that makes the company; it's innovation and commitment to customers and commitment to products. Software is a tool.
And I'd like to ask, why is the BSA a nonprofit? Are they a charity? Where is all that [settlement] money going? Is it going toward computers for schools? I don't know.
The BSA says it uses those funds for awareness campaigns and education.
Excuse me, but that sounds like advertising to generate more money. That's my point. That sounds like a weird nonprofit. I have a nonprofit that raises $8 million for children with sick kidneys. My idea of a nonprofit isn't somebody who takes $52 million and creates flyers and billboards so they create more "Nail Your Boss!" campaigns and get more settlements. That's always concerned me. Why are they a nonprofit? I guess I just don't understand what a nonprofit is.
A lot of these companies that get hit with these audits don't have the money, and that money could go to hiring new people, buying more software or PCs. It could go toward contributing to a stronger economy [instead of the BSA]. And I'm only talking about companies that are truly innocent. If you're a growing business and you're stealing software, then you shouldn't cry if you get caught. But like I said, it's impossible to be 100 percent compliant. If they are really catching pirates and thieves, then fine -- everyone deserves what they get. But, the problem is there really is a white area where they're not pirating and a gray area where it's really questionable.
So what happened after the raid? How did you move on from Microsoft?
I talked to the IT department -- all three of them -- and I said, "You probably think you're going to get fired. Well, you will -- in six months if we're using any kind of Microsoft products, then you're fired." So it was really funny, because they were relieved at first. But then I went into the IT room, and they had a whiteboard out with markers and they had all these lists of different programs, but they were stumped, and they just could find replacements. So, I said, "Let me help you guys out," and I took the eraser and erased all the big name programs. We just didn't need a lot of those programs because we'd never use them as a business. By the time I was through, they only had to get a database program, a word processing program and spreadsheet program and an operating system.
NEXT: Embracing Open Source
Why did you decide to dump Microsoft?
I was a really good Microsoft customer. And I've said this before -- I believe Bill Gates deserved everything he got. But, they never treated me like a good customer. They never called me and said, "Hey, we've had reports that you've had some issues with [software] compliance." And I don't know if Microsoft is still following up BSA raids with newspaper articles and ads smearing companies like mine. That's not right. They used that raid to single me out for a marketing push. That's why my beef was with Microsoft -- how dare they take my family-owned business and drag us through the mud to sell their software at a discount.
What did you move to once you dumped Microsoft?
First we went with Linux. We also used OpenOffice and a few other open-source programs. Then we moved to OpenSolaris. It's been a long time so it's hard to remember all the other open-source programs we used back then. And there are so many different choices today. It's not like it was 10 or 12 years ago. A lot of people have Mac Minis in the office. We like Apple. And you know what? Everybody likes getting Apple products. I watch Microsoft react to Apple today and it's hilarious. Think about that for a second. Imagine me saying that 10 years ago!
Do you use tablets?
Yeah, we use iPads for certain things. I think the prices have to come down a little before they become a tool people use on the factory floor; right now you can tell how highly compensated someone is by whether or not they have an iPad. And personally, I use iCloud. I love it. I have iPad, I have it on my desktop and I have it on my phone. And, I have two iPhones. We have a lot of Apple stuff. My dad, Ernie Ball, had one of the first Lisas.
Your decision got you quite a bit of publicity back then. What was it like to suddenly become the anti-Microsoft poster boy and open-source champion?
It was hysterical. It was my 15 minutes of fame, I guess. For some reason, World Trade Magazine ran out of people to put on the cover one moth, and they decided to put me on there. And, I started noticing the magazine in airports and stores and everywhere. And then I was on CNet and other places. Some folks at Sun Microsystems saw that I mentioned OpenOffice in one of the articles I was in, and they invited me to speak at Comdex [in 2002]. I spoke at LinuxWorld too. And I had packed houses.
What are your thoughts about software licensing and piracy today?
I don't know what it's like. I don't know if it's easier or harder to be in compliance. It's like asking a guy who's been clean and sober for 10 years what Budweiser tastes like. But that's the greatest thing -- I don't pay anybody anything. I don't have to worry about the licensing. No one is ever going to come into my business and raid me and shut me down and then send out a press release to make me look bad. It's not going to happen.
Would you ever go back to Microsoft?
I'm not going back into that. I don't want to ever get raided again or even think about it. There's only one way I'd do it. If someone at Microsoft said, "You know what? We're sorry." But, Microsoft will say they're sorry to me when pigs fly.
PUBLISHED OCT. 19, 2012