Efforts to curb software piracy in Asia are beginning to pay off, according to software industry associations battling the problem. For software vendors like Microsoft Corp., that pay off comes in the form of revenue.
In its earnings announcement Thursday, Microsoft executives said that sales in the Asia region increased more than 15 per cent from the year prior, in part due to efforts combating software piracy in Korea and Hong Kong.
"It appears like we have made some progress in certain areas with anti-piracy efforts," Microsoft chief financial officer John Connors said Thursday in a conference call to discuss the earnings.
Revenue from Asia across all of Microsoft's business units totaled $836 million, compared to $737 million the previous quarter and $709 million in the third quarter of fiscal 2000. Meanwhile Europe, the Middle East and Africa regions saw a decline in sales from the same quarter a year ago.
"Revenue growth was strong in Asia where relatively healthy PC growth led to strong sales of the Office suite," said Scott Boggs, Microsoft's vice-president and corporate controller. "The region also initiated successful anti-piracy campaigns in Korea and Hong Kong, which also contributed to the strong revenue growth."
With the help of the Business Software Alliance (BSA), an industry trade group that works closely with a number of leading software vendors including Sybase Inc. and Novell Inc., Microsoft has begun partnering with governments and law enforcement agencies to combat piracy. The problem pulls an estimated $12 billion from software industry coffers every year, according to the BSA.
"We've had particular success in Korea and Hong Kong," Tim Cranton, a corporate attorney for Microsoft, said in an interview "The greatest strides have been made with their governments to strengthen intellectual property laws."
One such legal measure, passed by Hong Kong's government on April 1, targets one of the major outlets for intellectual property piracy - corporations that run their software without an adequate number of licenses. Hong Kong made an amendment to its Copyright Ordinance that makes it an offense to possess infringing copies of copyright works.
Progress around the world continues to lower the impact of piracy on the software industry. The global piracy rate for PC business software applications dropped to 36 per cent in 1999, the latest year for which figures are available, according to the BSA. While that figure has declined from 49 per cent in 1994, more than one out of every three software applications installed in the world is pirated.
By far, the US accounted for the largest percentage of that piracy, about 30 per cent or $3.19 billion, according to the BSA. The Asia Pacific region accounted for 23 per cent of the losses - about $2.8 billion - led by Japan and China.