The steep price of software piracy in Canada

If you think using pirated software could not possibly harm your business, think again.

According to Symantec Corporation, besides adversely affecting the revenue of legitimate vendors, counterfeit software may contain viruses or malicious code that damage user systems.

“[By buying pirated software] you run the risk of getting a program that could wipe out your whole system,” said William Plante, senior director for global security and brand protection, Cupertino, Calif.-based Symantec Corp.

In addition, corrupted or defective software could ruin the hard drive, forcing business owners to shell out more money for repair services and new purchases, he said.

Pirated software often lacks necessary back up and recovery tools, manuals, warranties and support services that legitimate software offers, said Susan Harper, license compliance manager at Mississauga, Ont.-based Microsoft Canada. “Businesses need to make sure they have all the necessary components of a [software] license [including a] certificate of authenticity and recovery tools.”

Harper cited findings of a 2004 global IDC study that software piracy in Canada rose from 35 per cent to 36 per cent between 2003 and 2004, costing the economy $1.1 billion in lost software sales. Global rates, however, have gone down from 36 per cent in 2003 to 35 per cent in 2004. Still, that translated to $41 billion in lost global revenue.

Harper said small businesses often fall prey – either intentionally or unintentionally – to software piracy because of attractive price points offered by illicit software vendors.

“Sixty-three per cent of [Microsoft] software we see [is] pirated,” she said. Of this, only five per cent [is] counterfeit, and the rest are gray market products, which is software purchased outside of Canada and the US.

She stressed that while gray market products are technically legal software, and should not be a concern for software buyers, they still negatively affect Microsoft’s partner community as the revenue allocation does not go to Canada.

In an Ipsos Reid survey of 855 small Canadian businesses, 91 per cent of the companies polled agreed that software piracy is unethical; however, only 54 per cent regularly check the authenticity of software loaded on their systems.

Symantec is collaborating with US and Canadian customs and immigration authorities to help combat illegal smuggling of pirated software, but the company assumes the bulk of the responsibility, said Plante.

He said government agencies manning the borders have to deal with more heinous threats, such as terrorism, so software piracy should be an industry responsibility. On its part, Microsoft’s investigations involve “secret shopper” sting operations, where investigators pose as small businesses buying software.

Last year, Microsoft filed piracy charges against 23 software resellers, said Harper.

Symantec and Microsoft urge small businesses to adopt certain simple practices to protect themselves from software piracy: avoid purchasing software from the Internet or in response to spam and buy only from reputable resellers; and conduct regular software checks to ensure products installed on computers are legitimate.

Microsoft’s Windows Genuine Advantage Program allows users to check the legitimacy of installed software, said Harper.

Maintaining a simple inventory of all software installed on specific workstations within the company allows business owners to manage their IT systems more cost effectively, according to Chris Ellsay, president,, an Ottawa-based provider of computer and network consulting services to small businesses. helped realty firm Royal Le Page in Ottawa to manage its IT assets, saving the company more than $75,000 in technology resources.

“Software management does not have to be complex for small business owners,” said Ellsay. “All it takes is a binder, where you have a file [for] each computer with a list of all the software installed on it.”

Related links:

Canadian firms pay $270,000 in piracy damages

Microsoft attempts to combat pirated software

Microsoft requires Windows piracy checks

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Jim Love, Chief Content Officer, IT World Canada

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