Survey: More Than One-Third Of Software Is Pirated

Moreover, the software industry association sees troubling signs developing with the use of peer-to-peer techniques that could worsen the situation.

In reporting figures for 2003, the BSA said the loss represented nearly $29 billion. "That's over a third of the industry's revenue," said BSA vice president for enforcement, Bob Kruger, in an interview. "That translates into less innovation and . . . fewer jobs."

The survey, conducted for the BSA by market-research firm IDC, cast a wide net in 2003, and for the first time covered PC operating systems, local-market software, and consumer software, including games. In previous years, business-software applications were the sole focus of the report.

The study revealed that only $51 billion of the $80 billion in software purchased in 2003 was legally acquired. In compiling its data, IDC interviewed more than 5,600 users in 15 countries and called upon its analysts in individual countries to evaluate their respective country markets. Kruger noted that market surveys were first developed on the total amount of software installed, then those figures were compared with the amount of software that was sold. Somewhat simplified, the difference was the figure representing pirated software.

"For years we thought the trend was positive," said Kruger, adding that the new figures are cause for concern. "And now there are new forces at work, [namely], the spread of peer-to-peer. Right now, it's primarily music." He noted that the spread of broadband throughout the world will make it even easier to pirate software through peer-to-peer techniques.

So, what's the solution?

Kruger said a campaign of education and working with business and government entities will help stem the piracy tide, although in some countries and regions there doesn't seem to be much immediate hope of slowing the theft. In the former Communist countries of Eastern Europe, for instance, the survey revealed that the piracy rate was 71 percent; in the Ukraine alone, bootlegged software made up 91 percent of installed software.

Kruger said some governments and authorities protect software pirates, making it nearly impossible to halt practices that are illegal elsewhere. "In many cases, they [the pirates] are untouchable," he said.

Software piracy waxes and wanes from country to country, according to the survey. Also high up in piracy activity are Latin American countries, with piracy estimated at 63 percent, accounting for losses of $1.3 billion in the region. In the Asia/Pacific region, the piracy rate was 53 percent, with $7.5 billion in losses. In the Middle Easter and Africa, the 56 percent piracy rate was responsible for losses of more than $1 billion.

Legitimate software companies in Western Europe and North America fared better. With a piracy rate of 36 percent in Western Europe, the region saw $9.6 billion in losses. In North America, losses totaled $7.2 billion, while the piracy rate was just 23 percent. Said Kruger: "In the U.S., we have a strong tradition of protecting intellectual property."

*This story courtesy of Techweb.com.