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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.