Fake Software and the Effects on Your Company Network

The Hidden Dangers of Counterfeit Software

Counterfeit software may seem like a good deal at first, but it often comes with hidden surprises. Microsoft’s Digital Crimes Unit found that over 80% of fake software contains malware, which can:

• Expose Your Data: Hackers can gain access to sensitive business and customer information.
• Lead to Ransomware Attacks: Your files might be held hostage until you pay up.
• Cost You Money: Cleaning up after a malware attack and dealing with downtime can quickly drain your resources.

Cybersecurity Risks on the Rise

BSA | The Software Alliance’s Global Software Survey shows a clear link between unlicensed software and more frequent cyberattacks. For example, in countries like China, where the piracy rate is around 66%, cyber threats are more common. Why? Because fake software often misses out on important security updates, leaving your network open to attacks.

Hypothetical Scenario: IP Theft Due to Fake Software Usage

The Situation:
A design and manufacturing company specializing in high-tech components used counterfeit software to reduce operational costs. The software included design tools and project management applications, which were critical for their day-to-day operations. Unbeknownst to the company, this counterfeit software was embedded with malware, compromising their security.

The Attack:
The malware embedded in the fake software created a backdoor into the company’s network. Hackers exploited this backdoor to infiltrate the system, bypassing the company’s weak security measures. Over weeks, they accessed sensitive files, including proprietary designs, manufacturing processes, and confidential project data stored on the company’s servers.

The Impact:

1. 1. Intellectual Property Theft: The hackers stole sensitive IP, including designs for the company’s flagship product. This information was sold to competitors, who quickly developed similar products, undercutting the company’s market position.
   2. Financial Loss: The company suffered massive financial losses due to lost market share, legal battles, and the costs of investigating and addressing the breach.
   3. Reputational Damage: News of the breach damaged the company’s credibility with clients and investors, resulting in lost contracts and reduced trust.
   4. Regulatory Penalties: The breach led to violations of data protection regulations, resulting in significant fines and increased scrutiny from regulatory bodies.

Response and Recovery:
After discovering the breach, the company should have taken these actions:

1. • Immediate Incident Response: The IT team disconnected affected systems and hired a cybersecurity firm to investigate the breach and remove the malware.
   • Software Replacement: All counterfeit software was replaced with licensed, trusted versions. This included implementing security updates and patches.
   • Enhanced Cybersecurity Measures: The company adopted endpoint protection, multi-factor authentication, and regular network monitoring to prevent future breaches.
   • Employee Training: The company launched training programs to ensure employees recognized the dangers of counterfeit software and cybersecurity best practices.

The Price of a Cyberattack

A study titled “The Link Between Pirated Software and Cybersecurity Breaches” highlights additional risks for users of counterfeit software. According to the study, 65 percent of APAC consumers surveyed stated their greatest fear from infected software is the loss of data, files, or personal information. This is followed by concerns over unauthorized Internet transactions (48 percent) and potential identity theft (47 percent). Surprisingly, 41 percent of these respondents do not install security updates, leaving their systems exposed to attacks by cybercriminals.

Using counterfeit software doesn’t just make you more vulnerable to breaches—it also costs more to recover from them. According to a study by IDC and the National University of Singapore:

• Breaches Are More Likely: Companies using fake software face higher chances of being targeted.
• Recovery Is Expensive: Fixing the damage takes more time and money compared to businesses using legitimate software.
• Operations Can Stall: Downtime caused by attacks disrupts your business and damages your reputation.

Legal and Reputational Risks

Using fake software doesn’t just affect your cybersecurity. It can also lead to legal trouble and damage your company’s image. Violating software licensing agreements can result in fines or lawsuits, and being associated with software piracy might cause customers and partners to lose trust in your business.

How to Protect Your Business

To fully understand the business and national security risks of operating in the PRC, businesses must be proactive in identifying the sensitive personal and proprietary information in their possession. Businesses should also evaluate the relevant PRC laws and policies which may require government access to data and conduct comprehensive and ongoing due diligence.

Here are some simple steps to keep your company safe:

1. Choose Licensed Software: Buy from trusted vendors to ensure your software is authentic and secure.
2. Review Your Inventory: Regularly check the software you’re using to ensure it’s legitimate.
3. Educate Your Team: Make sure employees understand the risks of counterfeit software and follow company guidelines.
4. Boost Your Cybersecurity: Use firewalls, anti-malware tools, and keep your systems updated.

Wrapping It Up

Here’s a case study to illustrate how a tailored IT approach can transform a business:

Client: A leading luxury company.

Challenge: Align local IT infrastructure with global standards and switch to a more reliable IT service provider.

Solution: Solution: We initiated an IT audit to thoroughly understand the network and user setup. This step was critical for tailoring the solutions to fit the company’s global standards and the unique requirements of its China operations. Our actions included upgrading the network, transferring the internet connection to the company’s control, and establishing a robust connectivity solution linking their operations in China with their Asia headquarters. We also introduced an IT support contract for sustained efficiency.

Outcome: Achieved a streamlined IT setup compliant with global standards, ensuring efficient communication and operations.

If you’re looking for expert advice to navigate these challenges, consider reaching out to Jet IT. Our services include consultations, due diligence, and cybersecurity solutions that can help set your company on the right track and safeguard it from potential cyberattacks. With our support, you can build a strong, secure foundation for your business.

CONTACT US today.

FAQ

1. What are the biggest risks of using counterfeit software?

Counterfeit software exposes businesses to cybersecurity breaches, operational downtime, and legal penalties. Malware in fake software can steal data, disrupt workflows, and compromise customer trust.

2. How does Jet IT help businesses transition from counterfeit software?

Jet IT offers [IT Audits] to identify vulnerabilities, sources genuine software, and implements enhanced cybersecurity measures like endpoint protection and multi-factor authentication.

3. What is the financial impact of using unlicensed software?

The financial impact includes fines for licensing violations, costs of malware recovery, and lost revenue from downtime and reputational damage. Studies show recovery costs are significantly higher for companies using counterfeit software.