Microsoft: Pirated Software to Cost Businesses $491 Billion in 2014

Developers aren't the only ones stung by pirated software. Businesses also risk getting burned by running software that may have been tweaked by cyber-criminals.

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Microsoft has released a new study from IDC and the National University of Singapore (NUS) that warns businesses of the risks of running unlicensed software. The study is based on a survey of 1,700 IT professionals, government workers and consumers in 15 markets.

The study, sponsored by Microsoft, "revealed that enterprises are particularly hard hit by malware introduced via pirated software," David Finn, associate general counsel and executive director of Microsoft's Cybercrime Center, wrote in a blog post. This year, IDC forecasts that "businesses will spend $127 billion dealing with security issues and $364 billion dealing with data breaches."

In total, businesses will spend nearly half a trillion dollars ($491 billion) cleaning up after pirated software in 2014. Finn added that "almost two-thirds of these losses, or $315 billion, will be the result of organized crime—malware launched by financially motivated criminals."

Last year, in a similar study also conducted by IDC, the companies predicted that enterprises would spend $114 billion in 2013 to eliminate malware from counterfeit software.

At the same time, governments stand to lose more than $50 billion recovering from malware-ridden pirated software. Government officials polled by IDC are most concerned about "the loss of business trade secrets or competitive information (59 percent), followed by unauthorized access to confidential government information (55 percent) and the impact of cyber-attacks on critical infrastructure (55 percent)," wrote Finn.

Consumers will also get hit hard, in terms of cost and time. IDC and NUS expect individuals to spend $25 billion and 1.2 billion hours fixing infected systems. And there's no guarantee that buying a supposedly new, off-the-shelf PC will keep users safe.

In a forensic analysis of 203 computers that were bought "new" in 11 countries, NUS discovered that 61 percent were loaded with pirated software. "Most of the infected computers had more than one malware threat on them, and any one threat could infect multiple files."

According to IDC, other highlights include the following:

1. Consumers and enterprises have a 33 percent chance of encountering malware when they obtain and install a pirated software package or buy a PC with pirated software on it.

2. When asked about their biggest fears associated with a security event, 60 percent of consumers put loss of data or personal information in the top three and 51 percent placed unauthorized access or online fraud in the top three.

3. Despite these fears, 43 percent of consumers don't routinely install security updates on their computers.

4. Because of its large installed base of PCs and high piracy rate, the Asia-Pacific region will incur more than 40 percent of worldwide consumer losses and more than 45 percent of enterprise losses from malware on pirated software.

Echoing the company's stance on software piracy, Finn said the study shows "how vital it is that individuals, small businesses, enterprises and government institutions buy new computers from reputable sources and demand genuine software." Microsoft's recent push toward software subscriptions, namely Office 365, may help turn the tide.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...