Forty per cent of software pirated

In what it called the “largest, most encompassing” study ever conducted on software piracy, a U.S. umbrella group representing the world’s biggest software makers recently outlined the damage theft is causing to the global economy.

Looking at 57 countries, the report found that nearly 40 per cent of all business software currently in use is pirated. Some countries merited particular mention for their piracy rates – in China, for example, the report concludes that roughly nine out of every 10 pieces of software aren’t properly licensed.

The Business Software Alliance (BSA), backed by companies such as IBM Corp. and Microsoft Corp., was quick to point out in a press conference this month that a 10-point drop in piracy rates could generate enough tax money to put 6.9 million additional people through college, or provide adequate health care to an estimated 30 million.

“This level of reduction is imminently achievable,” said Robert Holleyman, president and CEO of the BSA.

If such a drop were to occur over the next four years in Canada, which sports a slightly-below average piracy rate of 38 per cent, the BSA said 16,000 more jobs and an additional $8.3 billion in local IT industry revenue would be realized.

In fact, the organization said Canada has already shaved four per cent off of its piracy rate since 1996, during which time the software sector grew by 20 per cent – two trends it says are directly related.

Although relatively low, Canada’s piracy rate is still higher than that of several other Western nations, including the U.S, U.K. and Finland in its level of piracy, something that critics have traditionally blamed on Canada’s less stringent copyright laws and lack of enforcement.

John Gantz, chief research officer at Framingham, Mass.-based IDC, which BSA commissioned to do the study, said countries that focus on reducing piracy rates boost their tax revenues, and will enjoy all the spin-off benefits that ensue.

“If you lower the piracy rate, software spending will go up,” Gantz said. He acknowledged the long-standing argument that those who pirate software never intended to buy in the first place, but said the research taken by piracy slows the introduction of new, beneficial software packages to the market – the kind that would likely be bought by businesses.

“And local vendors in a country tend to benefit more (from lowered rates) than the multinational, packaged software firms,” he added.

The complete study can be found at www.bsa.org/idcstudy.

SIDEBAR:

The view from Canada

The Canadian Alliance Against Software Theft (CAAST), a coalition of Canadian software vendors, as well as Microsoft Canada (which backs CAAST) have swung into action in recent years, cracking down on resellers who sell pirated software “hard loaded” onto PC systems.

Diana Piquette, anti-piracy manager at Mississauga, Ont.-based Microsoft Canada, is one of several staff members dedicated to battling piracy full-time basis at the company. All of Microsoft’s regional offices combat piracy at a local level.

She told ComputerWorld Canada that the country’s 38 per cent rate does not take into account pirated operating systems – only business applications.

“Piracy is thought of very differently than other forms of theft,” Piquette said. “We need to educate people.”

She agreed with the BSA findings that software theft limits the amount of research dollars that can be funnelled into creating new forms of software. “The people who are most hurt are the start-up companies,” Piquette added.

However, she said Microsoft and CAAST do not devote a lot of energy to tracking enterprise software licensing issues. Most experts agree that few IT departments knowingly deploy pirated software – often they let licenses lapse over time, or simply don’t have a good handle on what they may be using to begin with.

“We do a lot of education (with them),” said Piquette. “We don’t try to track it.”

Instead, she advises enterprise IT managers to purchase software inventory management tools to ensure compliance.