Logistics: It Was Good Enough To Steal


December 2, 2013: The U.S. Army has agreed to pay a software firm (Apptricity) $50 million to settle accusations that the army had made hundreds of illegal copies of the Apptricity logistics tracking and management software. The army began using the Apptricity software in 2004, as it sought a solution to keeping track of all the supplies being shipped to Iraq and Afghanistan. Apptricity was a commercial product that was one of the first to provide real-time tracking. So the army began leasing Apptricity for their needs, in part because Apptricity was a small firm and had designed Apptricity so that it did not require any lengthy and expensive modification for each organization using it. Like most large management software systems Apptricity was, in effect, rented and the user paid depending on how much they used the software and on how many computers.

Apptricity worked very well and became quite popular. It was so popular that a large number of troops (in staff, headquarters, and logistics units) wanted it installed. The army had plenty of mobilized geeks who knew how to take a copy of Apptricity and install it somewhere else. By 2008, Apptricity began to suspect that the army was using their software more than they were entitled to. At first army commanders denied the accusations, but afterwards an internal investigation discovered that the accusations were accurate. In fact, some army personnel had hired another contractor to modify some elements of the Apptricity software so it would be easier to copy and distribute to more army users. This saved the army over $180 million.

At first the army tried to delay the investigation, in part because some army officials could go to jail for criminal behavior (modifying Apptricity software to make it easier to steal). Meanwhile, Apptricity decided to speed things up by suing the army for $225 million. Most of that was for lost income and the rest was a fine for stealing the software in the first place. Since the army was the biggest customer Apptricity had they were willing to settle for less if the army kept using (and paying for) all the Apptricity software that the army was now using. The compromise involved the army paying only part of what they should have paid over the last seven years if illegal copies had not been used and would continue to use the Apptricity software which continues to be very popular within the army.

Apptricity is, in effect, similar to the tracking systems used by FedEx and UPS that allow people who have bought something via the web to easily track the movement of their purchase from seller to buyer. This revolutionized the speed and efficiency of getting goods to the troops and finding out what did not make it quickly (because of theft, damage, or human error along the way). Meanwhile, the army has not said whether or not it will punish any of its own personnel for doing the actual stealing of Apptricity software.





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