More Than A Third Of All Software Is Counterfeit - InformationWeek

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5/23/2006
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More Than A Third Of All Software Is Counterfeit

According to the Business Software Alliance, 35 percent of all software installed on PCs globally in 2005 was bogus.

PC software piracy stayed stable worldwide last year, an industry trade group said Tuesday, but anti-piracy efforts in some countries -- notably China and Russia -- have beaten back counterfeit programs in a few areas.

According to the Business Software Alliance (BSA), which sponsored the annual survey conducted by IDC, 35 percent of all software installed on PCs globally in 2005 was bogus.

Although that's the same percentage as during 2004, the BSA boasted that piracy rates declined in more than half of the countries covered in 2005's report, and increased in just 19.

In particular, the group highlighted piracy drops in Russia, China, and India -- problem countries in part because of their size, in part because of a culture of counterfeiting -- where fake software fell by 4, 4, and 2 percent, respectively.

"This year marks the second year in a row where there has been a decrease in the PC software piracy rate in China, " said the BSA's chief executive Robert Holleyman in a statement. "This is particularly significant, considering the vast PC growth taking place in the Chinese IT market."

The BSA figures that piracy in China will continue to fall because of recent rulings, including one that mandates Chinese PC manufacturers equip systems with legitimate operating systems. Also, in April Microsoft and PC maker Lenovo struck a deal to pre-install Windows on computers made in China; the pact should mean about $1.2 billion in new business for Microsoft over the next year.

China's piracy percentage, however, remains high even with 2005's drop: 86 percent of all software installed on computers in that country was counterfeit.

But other nations were even less likely to abide by copyright laws. Vietnam, for instance, held a top spot as the world's worst, with 90 percent of its software pirated. (Vietnam was, however, not the sole winner of the worst award; in 2005 it shared the booby prize with Zimbabwe.)

The BSA also estimated losses to software developers caused by counterfeiters. Although the U.S. has the lowest piracy rate in the world -- 21 percent of software installed there is phony -- the impact is the largest, due to the U.S. computer market's size. By the BSA's tally, piracy in the U.S. took $6.9 billion out of developers' pockets. China, France, Germany, and the U.K. rounded out the top 5 by dinging developers to the tune of $3.9, $3.2, $1.9, and $1.8 billion, respectively.

The full BSA study can be downloaded from the group's site PDF format.

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