Luke
09-10-2002, 02:55 AM
Microsoft says state agency owes $1.5 million Software giant accuses Texas Department of Criminal Justice of 2,082 licensing violations
By Mike Ward
Friday, April 12, 2002
The state agency charged with punishing folks who break the law apparently is itself a scofflaw. Microsoft Corp. has told the Texas Department of Criminal Justice that it owes $1.5 million for having 2,082 "licensing shortfalls," state officials said Thursday.
Using unlicensed software is a violation of federal copyright laws. Larry Todd, a prison system spokesman, said the criminal justice agency has offered Microsoft about $300,000 to settle the claim but so far has received no response. Any settlement would have to come out of the prison system's budget.
Other state officials said they believe that the prison system is the only state agency facing such an issue. "We don't believe any employee willfully or intentionally used a program for any sinister or illegal purposes," said Todd. "But we would admit to not keeping the appropriate or proper records regarding these licenses." A Microsoft spokeswoman said the company does not publicly discuss business involving individual customers.
Kathy Walt, press secretary for Gov. Rick Perry, said the governor "expects all state agencies to abide by copyright laws, as well as other laws." Officials said the issue surfaced in December 2000, when Microsoft approached prison officials about purchasing an "enterprise license": a blanket license covering all the Microsoft software on its computers. "It was for several million dollars. No one recalls exactly how much. But it was well over a million (dollars) — not within our budget, more than we could afford," Todd said.
"We will do what is fair and equitable, but we have to be prudent." The agency audited its more than 11,000 computers to count the Microsoft programs and determine how many had the proper licenses. At the same time, Microsoft checked its own records to determine how many licensed programs the agency had. The result: Microsoft sent the agency a bill for about $1.5 million last October to bring into compliance about 6,000 PCs, many of them more than six years old, Todd said.
"We didn't feel like we owed that much," he said. "We didn't think we had that many PCs out of compliance. We thought we had, maybe, 1,000 PCs that may — I said may — have needed to be upgraded and brought into compliance."
Microsoft disagreed. In a Feb. 19 letter to department Deputy Executive Director Art Mosley, the software giant informed prison officials that 2,082 licenses were needed to cover the unlicensed programs — a number Microsoft said the prison agency had confirmed in its audit. "Despite the fact that the audit was completed and the shortfalls were identified, no effort has been made by the TDCJ to resolve these shortfalls," states the letter from Mary Jo Schrade, a Microsoft attorney.
Noting that negotiations had gone nowhere and phone calls to the prison system's top computer official had gone unanswered, Schrade raised the possibility that the company might send in its own auditors. She wrote: "We certainly do not want to have to enforce our contractual audit rights to send in external auditors to review TDCJ's licensing and deployment but, so far, everything short of that has met with no action on the part of TDCJ."
Todd acknowledges, "Some of our employees may have innocently shared programs, not realizing they were in violation of the copyright law. We certainly are going to pay our equitable dues to Microsoft in a fair and equitable manner, but at this point the amount owed is still under discussion."
Microsoft set a deadline of March 5 to resolve the matter. Todd said the agency is awaiting a response to its settlement offer. As business operations director at the state Department of Information Resources, Pat Hogan oversees the state's information technology network, including the 90,000 computers at state agencies. Hogan said he was unaware of any other agency challenged by Microsoft. Several years ago, he said, the Legislature required software audits to ensure that all software in use was properly licensed and accounted for.
By Mike Ward
Friday, April 12, 2002
The state agency charged with punishing folks who break the law apparently is itself a scofflaw. Microsoft Corp. has told the Texas Department of Criminal Justice that it owes $1.5 million for having 2,082 "licensing shortfalls," state officials said Thursday.
Using unlicensed software is a violation of federal copyright laws. Larry Todd, a prison system spokesman, said the criminal justice agency has offered Microsoft about $300,000 to settle the claim but so far has received no response. Any settlement would have to come out of the prison system's budget.
Other state officials said they believe that the prison system is the only state agency facing such an issue. "We don't believe any employee willfully or intentionally used a program for any sinister or illegal purposes," said Todd. "But we would admit to not keeping the appropriate or proper records regarding these licenses." A Microsoft spokeswoman said the company does not publicly discuss business involving individual customers.
Kathy Walt, press secretary for Gov. Rick Perry, said the governor "expects all state agencies to abide by copyright laws, as well as other laws." Officials said the issue surfaced in December 2000, when Microsoft approached prison officials about purchasing an "enterprise license": a blanket license covering all the Microsoft software on its computers. "It was for several million dollars. No one recalls exactly how much. But it was well over a million (dollars) — not within our budget, more than we could afford," Todd said.
"We will do what is fair and equitable, but we have to be prudent." The agency audited its more than 11,000 computers to count the Microsoft programs and determine how many had the proper licenses. At the same time, Microsoft checked its own records to determine how many licensed programs the agency had. The result: Microsoft sent the agency a bill for about $1.5 million last October to bring into compliance about 6,000 PCs, many of them more than six years old, Todd said.
"We didn't feel like we owed that much," he said. "We didn't think we had that many PCs out of compliance. We thought we had, maybe, 1,000 PCs that may — I said may — have needed to be upgraded and brought into compliance."
Microsoft disagreed. In a Feb. 19 letter to department Deputy Executive Director Art Mosley, the software giant informed prison officials that 2,082 licenses were needed to cover the unlicensed programs — a number Microsoft said the prison agency had confirmed in its audit. "Despite the fact that the audit was completed and the shortfalls were identified, no effort has been made by the TDCJ to resolve these shortfalls," states the letter from Mary Jo Schrade, a Microsoft attorney.
Noting that negotiations had gone nowhere and phone calls to the prison system's top computer official had gone unanswered, Schrade raised the possibility that the company might send in its own auditors. She wrote: "We certainly do not want to have to enforce our contractual audit rights to send in external auditors to review TDCJ's licensing and deployment but, so far, everything short of that has met with no action on the part of TDCJ."
Todd acknowledges, "Some of our employees may have innocently shared programs, not realizing they were in violation of the copyright law. We certainly are going to pay our equitable dues to Microsoft in a fair and equitable manner, but at this point the amount owed is still under discussion."
Microsoft set a deadline of March 5 to resolve the matter. Todd said the agency is awaiting a response to its settlement offer. As business operations director at the state Department of Information Resources, Pat Hogan oversees the state's information technology network, including the 90,000 computers at state agencies. Hogan said he was unaware of any other agency challenged by Microsoft. Several years ago, he said, the Legislature required software audits to ensure that all software in use was properly licensed and accounted for.