When companies use pirated software, there is a lot more at stake then just worrying about the police kicking your door in. There are a number of real risks that are probably overlooked by companies who are intentionally using unlicensed software:
Malware and Viruses
When you use licensed software, you can be pretty confident that the software hasn't been tampered with and only does what it's supposed to do. Pirated software is often used as a medium to distribute viruses and malware.
The Digital Citizens Alliance found that one third of pirated software sources contain malware and are 28 times more likely to have malware then legitimate sources.
Once on your computer, hacking groups and criminals can log your keystrokes (capturing passwords or other sensitive information), outright steal your data, turn your web cam or microphone on, corrupt files, steal banking information, or even encrypt your entire system and hold it for ransom. Malware and viruses can even be spread across your network to other computers within your organization that don't have the corrupt software installed on them.
The infographic says it all. Malware and viruses can be far more costly then saving a few dollars on a software license.
Output Can't Be Trusted
If pirate groups might be using software to install malware, then what else are they doing? Even if unintentional, cracking and modifying the code of a software system can have unintended consequences to the accuracy and output of the product.
Imagine a company using an unlicensed CAD program to design the steel structures of a skyscraper. What if the calculations are off? What if the outputted files aren't 100% accurate? It might sound crazy, but when you think about pirating software in this context, the risks could include millions in damages or even loss of life.
Often times, cracked software isn't an official release and can be riddled with bugs. Unlicensed software also isn't always able to be updated, so you could be missing important updates, fixes, and security patches.
If you're using unlicensed software, you're breaking the law. What if your organization got raided while a customer was there? What if your customers find out you're giving them pirated designs?
There's a pretty obvious stigma associated with performing illegal activities, and customers probably wouldn't stay customers for long if they found out you're not doing business legally.
If you're caught using unlicensed software, there could be big financial liabilities. When someone pirates software, they're infringing on copyright - which carries fines and damages in nearly every jurisdiction. In the US, you can face fines up to $250,000 as well as be held for actual damages, lost profits, and even statutory damages of up to $150,000 per copyrighted work.
Personal Criminal Liability
Software piracy is not just a civil issue, its also a real crime that can come with jail time. The scary part is that it's not just the actual user who's at risk - if you're a company director and don't have controls in place to make sure you're operating legally - then you're also at risk. Ensuring your company is compliant is the responsibility of IT, management, and directors.