An industry association estimates software piracy costs $59 billion worldwide, but an anti-piracy firm says that number is too low.
Software piracy jumped 14 percent worldwide, costing
software companies about $59 billion, according to the Business Software
Alliance. However, a security firm said the total costs should be much higher.
The rate of software piracy hit 42 percent worldwide but is
most concentrated in emerging markets, the Business Software Alliance found in
its annual report released May 12. The total has doubled since 2003, when BSA
released the first report.
The most frequent kind of piracy occurs when organizations
purchase a single license and then install it on multiple computers, the
report found. Some 60 percent of those surveyed in the report from the emerging
markets said this was legal for home use and 47 percent said it was legal for
work. Both statements are incorrect, according to BSA.
"The software industry is being robbed blind," said Robert
Holleyman, BSA president and CEO.
Just like PC sales, software piracy is growing steadily in
emerging markets. While emerging economies accounted for half of the global
shipments of new computers in 2010, paid licenses were less than 20 percent of
worldwide sales, according to BSA.
The "rates of theft are completely out of control,"
However, security vendor V.i. Labs warned that the actual
economic cost could be "significantly higher" than what BSA estimated. V.i.
Labs collects software piracy data for its customers and has access to real-world
statistics, Victor DeMarines, vice president of products at V.i. Labs, told
eWEEK. DeMarines stopped short of saying the BSA report was wrong, insisting
that the BSA report just "used a different methodology."
Software vendors use V.i. Labs' CodeArmor Intelligence to
prevent and track down pirated versions of their applications. Based on data
collected by its software, V.i. Labs knows that pirated software has already
cost its own customers $1 billion in lost revenue, according to DeMarines.
Considering that its small sample size was reporting $1 billion in losses,
DeMarines said it was more likely that BSA was underestimating the global
"Our Piracy Pipeline comes from real use of unlicensed
software, and the fact that our customers [are] continually growing the number
of infringing users [they are finding] suggests that the $1 billion that has
been identified is just the beginning," DeMarines said.
DeMarines estimated that the same customers would see losses
of more than $4 billion within the next three years.
The irony was that many users did not realize what they were
doing is wrong, either because they don't realize the software is pirated or
because they don't understand the impact of using such applications, according
"There's an awareness gap where many people don't even
understand that they're stealing software," BSA Vice President Matt Reid told
More than half of the respondents, or 59 percent, said
intellectual property rights benefit local economies and more than 80 percent said
legal software was more secure and reliable than pirated versions.
DeMarines noted that the people who are creating cracked
versions of software are also not in it to make money. There is a "culture of
sharing," where people distribute the software for free because they don't
believe in licensing or feel everyone should have open access, DeMarines said.
Once cracked, the software spreads on a very organized system and is easily
found on search engines devoted to finding pirated software. Major search
engines such as Google and Bing also pick up those links eventually. It's a large
volume business, DeMarines said.
The BSA represents the entire software industry including
independent software vendors and large companies such as Apple, Microsoft and
Adobe Systems. The Global
Sofware Piracy Study
relied on information obtained from Ipsos and IDC to
calculate some of the numbers in the report.
Ipsos surveyed more than 15,000 business and consumer PC
users and included commercial, open-source and mixed-source programs such as
operating systems, games and business applications. Servers were not included.
BSA estimated its $59 billion price tag using IDC's software reports for 80