Survey shows business rife with software piracy

By ADAM GIFFORD

The Business Software Alliance estimates almost one in three applications on business PCs are illegal.

In its latest global software survey, the BSA, dominated by United States software vendors, estimated New Zealand was responsible for $NZ43 million of the $US12 billion software vendors lost to pirates last year.

"We're not crying wolf, but if 31 per cent of any other product was being obtained illegally there would be widespread concern," said the BSA's Australian chairman, Jim MacNamara.

The estimated piracy rate in New Zealand actually dropped from 32 per cent to 31 per cent last year, but Mr MacNamara said that reflected a lower number of PCs coming into the country.

The survey by the BSA and the Software & Information Industry Association correlates sales of new software and upgrades with hardware sales.

For most countries it estimates there are between four and seven applications on every PC. Some other scales are applied to balance out factors such as people transferring licences they own from obsolete machines.

Vicky McCullough, director of New Zealand's Accordo Group, which conducts software audits for companies, said the 31 per cent figure sounded about right.

"We've already found $7 million or $8 million in unlicensed Microsoft software alone,"she said.

"Some organisations come in nowhere near those figures; others are a lot higher."

She said smaller companies seemed to be better at controlling their software assets. "If it's a larger company, typically things start to go awry. I would like to say it's mostly though lack of controls and not malevolence, but I do see situations where people know they have a problem with unlicensed software but they put it aside. That is on the wrong side of non-compliant."

Mr MacNamara said that because software was not something people could touch, they might resent paying for it. Software vendors resent that even more, and were increasingly taking legal action against illegal use.

"In Australia there can be damages in excess of $100,000 and the directors are made liable," Mr MacNamara said.

The BSA argues that pirate software adversely affects New Zealand's local software industry and economy through higher prices for consumers and less publisher revenue to invest in new products, and is a potential barrier to success for software start-ups.

Software and Information Industry Association president Ken Wasch said too many businesses were getting a free ride on pirated software.

"Businesses continue to communicate, conduct commerce and manage their operations with pirated software, stealing revenue from software publishers," he said. "Software has forever changed the way business gets done, enabling participation in the digital economy.

"Business owners who fail to respect copyright law and pay for software should be prepared to incur fines that could have a significant impact on their bottom-line."

The survey does not relate to the consumer or home market, or to practices like hard disk loading or counterfeiting.

Some companies send out undercover sting teams to check for counterfeit software, or to see if PC resellers are selling software loaded on to hard disks without supplying the disks and licences.

But compared with other countries, New Zealanders are relatively honest.

Some countries such as Vietnam are considered "one disk" markets where many companies have never seen legitimate software.

In 19 countries, including China, Russia and Indonesia, more than 80 per cent of software is illegal. Latin America has a 59 per cent piracy rate, the Middle East and Africa 60 per cent and Eastern Europe 70 per cent.

Greece has 71 per cent and Ireland, home to a high-tech revolution but with lax copyright enforcement, has a 51 per cent of its business applications unpaid for.

The North American piracy rate has steadily declined from 32 per cent to 25 per cent over the past five years, but because of the size of its software market accounts for the largest piracy losses to software publishers.