Software Piracy On The Rise, Study Finds - InformationWeek

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5/14/2008
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Software Piracy On The Rise, Study Finds

Rates of pirated software ranged from a high of 93% in Armenia to a low of 20% in the United States, according to the 2007 BSA and IDC Global Software Piracy study.

Software piracy is more prevalent today than ever, according to a new IDC study sponsored by a software industry group. Worldwide, the study estimates, 38% of all commercial software is pirated, costing the software industry $47.8 billion last year alone.

"By the end of 2007, there were more than one billion PCs installed around the world," the 2007 BSA and IDC Global Software Piracy Study noted. "Nearly half have pirated software on them." And the study predicts the percentage of pirated software may even continue to rise in the near-term.

That said, there are some positive signs for the software industry, according to the study. The amount of software pirated in China has dropped 10% in the last five years to 82%, while in Russia the number has dropped 14% to 73%. Those numbers are still astronomically high, but show signs that in at least some places, anti-piracy campaigns and technologies are helping. The piracy rates dropped in 68 countries in the last year.

However, since markets in developing countries are growing so quickly, worldwide piracy rates continue to rise. The study finds emerging markets more likely to pirate software, especially on users' first computers. And as the dollar falls in strength, the dollar value lost by piracy continues to grow. Additionally, increasing access to the Internet also gives people more access to pirated software.

However, there are factors working in the other direction, namely international and national legal and political pressure, growth of local software markets, pressure from vendors and trade associations, anti-piracy technologies, and ad-funded software models.

In Russia specifically, the study noted a collision of factors conspiring on the side of less piracy. Those included enforcement and education by Russia's government, vendor initiatives aiming to push people toward legal software (think Microsoft's Genuine Advantage, for example), increased bundling of software with hardware, and a spiking oil economy that's put cash in Russians' pockets.

IDC estimates that a drop in worldwide piracy by 10% in the next four years could lead to 500,000 new jobs in the software industry, mostly for local resellers, services companies, and other channel partners of software vendors, as opposed to the major software companies.

There are obvious differences between piracy rates in emerging and developed markets. Regionally, North America saw the lowest piracy rates, with 21% of software being fraudulent, while Central and Eastern Europe saw the highest rates, with 68% of software there being pirated. The United States had the lowest rate of all countries surveyed, at 20%. Armenia came in with the worst rate, a staggering 93%.

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