What exactly are the risks of using pirated software?

Forget about lawsuits.

What about your own self-respect? Is your self-respect less valuable than the cost of some software? What about the karmic consequence? Is the karmic price less costly than a discount obtained under false pretenses? And what about these consequences to the other person whose credentials you use if they cooperate in the ruse?

If you are intending to build software, think seriously about "taking" from a fellow software builder, even if they are a big company.

The law may not respect my opinion on the matter, but I think it's a more logical approach to the issue.

If the software is integral to your money-making and you cannot afford it up front, it's my opinion that it's better to pirate it, make some money, and then buy the software as soon as is reasonably possible. I'd definitely assume that the law and possibly even the corporations don't agree with that opinion (i.e. you can't contact them ahead of time and get some sort of delayed payment deal out of them,) but in the end, you will have bought the software (win for the software company.) The alternative, on the other hand, is that you never start a business in the first place since you can't afford to, and the software is never purchased (loss for the software company.)

Although not applicable to your situation, I also think that pirating software (not media) is fine so long as you don't make any money off of it. Why? Because you learn the software, and if, in business ventures, a need for the software comes around, then not only will you already know how to use the software (win for you,) but you will be far less likely to buy competitor's software (win for the software company.) If, however, you never learned their software, you'd be much less likely to buy it, and personally, if I was under the impression that a software company was so aggressive in their anti-piracy measures that they'd sue someone that merely tinkered with their software and never never made anything of value (i.e. willing to destroy people's lives for no legitimate reason,) then I would do everything in my power to avoid purchasing their software. If a company like that sues a poor person for $500,000 or some similar amount of money, they might as well have put a gun to their head and pulled the trigger. I take that pretty seriously and don't approve of it when it comes to situations where they should've just turned around and walked away. For example, many years ago, the one Metallica CD that I owned got thrown in the trash when Lars went off on Napster, trying to justify the ridiculous lawsuits for hundreds of thousands of dollars brought against teens and their parents. A multi-millionaire that wants to destroy the lives of those that're already poor... how disgusting!

At any rate, I think these are two constitute legitimate exceptions to the "piracy is bad" rule. Of course, trying to put these exceptions into law would be difficult and make enforcement difficult as well, but it's sort of an honor system. If you're making money with a piece of software, you should buy it. Same goes for free or open-source software. If you're making money and can afford it, help those that helped you.

I agree with Kenneth's answer regarding self-respect, karma, etc... However, the issue is much bigger when you have employees.

How can I expect our employees to treat our company fairly if I'm cheating the guy who developed our software?

When your company uses pirated software your employees see that you are OK with a bit of cheating. They realize that leaving early is probably OK if they don't get caught. They realize a little bit of lying is OK in most circumstances. They realize that your ethics are at least a little bit grey and they might not always be able to believe what you say.

Using pirated software has a real and long-term affect on your company culture. And the affect is not good.

Here are the pros and cons in my opinion on using pirated software:

Pros:

• It doesn't cost you anything.
• You don't lose out if you decide that the program isn't for you or a competitor has a better product that does a better job. You didn't just lose $2000 when a competitor has a similar and more effective product for $1000.

Cons:

• The chances of getting a virus or malware are low, but there is still a risk. A lot of keygenerators have rootkits and trojans which can in some cases cause damage to your operating system and/or files.
• If you own a company using pirated software you face the risk of being litigated by the company you've stolen the software off. Software companies tend to go after companies more-so than individuals as companies will most likely have to pay more if there is a court case as opposed to an individual.
• You're morally bankrupting yourself.
• If you're using pirated software you don't actually realise someone most likely paid cash for the cracked licence you are using (not in all cases) and that they're probably going to get into a lot of trouble as a result of your infringement. I've seen a lot of cracked software using credentials of someone who purchased it (their first and last name) making it easier to go after them and make all infringement liable to them.
• Pirating software can become addictive.
• No support for the product
• No free updates

I did some custom software for a company that was later purchased and they made sure they bought all the code from me and that there were no other issues. Nobody wants to buy a law suite.

BSA offer reward for reporting if employer uses pirated software so there's that risk always.

Your reputation also will take serious hit if you get caught. With pirating yourr self, you send signal that it's ok for you... If you get caught and news spread, why you think anyone would pay for your software/product and not pirate it if you are doing the same thing?

You don't need latest version of software to get going, so finding second hand copy of earlier version photoshop is always cheaper option...