Almost a half of all PCs in operation worldwide use pirated software, according to the Business Software Alliance (BSA). The industry body came to the number after tasking research firm Ipsos Public Affairs with a poll of 15,000 users in 32 countries, albeit a tiny fraction of the more than one billion clients used across the …
Bad news for BSA members
If you gave the really big software players - especially Microsoft and Adobe - the option of instantly deleting all their pirated software across the whole world, I'm pretty sure they wouldn't take it. If people were forced to pay for the commercial software, they ... wouldn't. They'd find a free alternative, and the massive take-up of Linux or Gimp or whatever would destroy the lock-in effect of the big players. When a critical mass of people are using free (as in beer) software, the market share of the big companies would collapse.
Much the sames as the big-boys mess about with students as such, leaving them alone and offering extremely silly discounts. MS, Adobe, etc, need all those "virgin" app users to feel comfortable with their software packages so they will head out into the workplace and recomend their use!
Having received a load of phishing letters recently from the BSA, I have asked myself: am I 100% sure all my software, on all my 10 machines, is licenced correctly? The answer is no, only 99% as these machines have been moved around, re-puposed over the years. Although they were all completely legit when bought can I prove it?
So I just spent 2 hours trying to find out how much it would cost for 10 copies of MS office (value licence) and move them all onto the same platform. I failed as no proper prices are avilable online, but I am sure it will be thousands. Or I can scrub it all and go openoffice for zero outlay, and guarantee no further internal compatibility problems, no bother from BSA, free future upgrades.
I am sure others in small businesses will be thinking the same, for all sorts of other software. Yes there will be internal disruption, but it's a one time hit, then the pain lessens.
If BSA/MS has any sense they will be backing off the gas pedal on this one.
Piracy != theft
In order for theft to occur someone must loose something. The 'lost sales' argument doesn't hold up under scrutiny, therefore piracy is NOT a form of theft but is a seperate crime altogether (and make no mistake: it is, and should be, a crime). I'd say that the first step to reducing it is to treat it as such instead of trying to treat it the same as shoplifting a copy of the software.
Isnt shoplifting a copy the same as downloading it from a torrent?
apart from the cost of a disk and some cardboard ( 50p) ?
sorry to be pedantic )
true the lost sales dosent hold up completly, but if there are 100 pirate copies then maybe that represents 10 people who would have actually paid for it if there was no chioce.
"The 'lost sales' argument doesn't hold up under scrutiny"
huh? run that by me again...
Simple, they never would buy the pirated goods. It's pirated or nothing for them (or Free alternative, of course).
No, it's not the same.
If you walk into a shop and steal a copy of a software product it's the shop owner who takes a loss not the vendor. Eg if I stroll into Woolworths and steal a £40 Xbox game woolies have just lost £25 (or whatever they used to pay for games, no idea what the margins are on xbox games).
... of pulling figures from your arse.
"true the lost sales dosent hold up completly, but if there are 100 pirate copies then maybe that represents 10 people who would have actually paid for it if there was no chioce"
Prove even ONE copy out of '$59bn of "stolen" software' represents a lost sale.
it's simple enough
the BSA likes to imagine that, in an ideal world in which piracy was somehow impossible, every single person who in the real world pirated a piece of software would buy that piece of software instead.
this is generally considered to be extremely unlikely; most people who aren't the BSA expect that a lot of the pirate downloads are by people who, if they didn't have the choice to pirate Photoshop, would not pay $1,000 for a legit copy, but would use a free alternative or simply live without.
I thought it was a civil offense.
> I thought it was a civil offense.
That depends on the jurisdiction and the circumstances of the infringement.
In the UK, for example, it becomes criminal if the copying is performed in a commercial setting; the penalty can be up to ten years inside...
I still have loads of customers who ask me for unlicenced copies of various bits of software, and most of them get extremely put out when I tell them - yet again - that I will not do that for them.
 See section 107 of the Copyrights Designs and Patents Act 1988
"In the UK, for example, it becomes criminal if the copying is performed in a commercial setting; the penalty can be up to ten years inside..."
...or transportation to the colonies.
Oh wait, I made that last bit up. But then the Tories are in power...
Oh wait, I made that last bit up. But then the Tories are in power...
Thank god for that; if the zanuLabour party was still in power you'ed probaly be arrested and locked up in a cell without ever seeing a court room, solicitor, or even any evidence!
someone must loose something...
You mean, like, a wild animal or something... Like, wow!
Most people only use something if it's free or close to. Otherwise the lowest common (working) denominator wins i.e. OpenOffice, which is unfortunately Oracle's baby nowadays.
If people had to pay for an OS then most would be running Linux, FreeBSD or even Solaris!
Cheers from the front-line of human knowledge!
I could do with transporting to the colonies, I'm gonna hve to £1000 for someone to fly me later this year
"The highest instances of pirated software were in China, followed by Nigeria, Vietnam, Ukraine, Malaysia, Thailand, Indonesia, Saudi Arabia and South Korea."
So far so good.
"The evidence is clear: the way to lower software piracy is by educating businesses and individuals about what is legal – and ramping up enforcement of intellectual property laws to send clearer deterrent signals to the marketplace."
Wait, what?! How the hell are they going to deter a Nigerian 419'er from downloading a hooky copy of Windoze then? Oh, education, of course. Make them learn proper English grammar, that way they'll be more successful in their scams and can therefore afford the software.
""It took hundreds of millions of thieves to steal $59bn worth of software last year. Now we have a better understanding of what they're thinking," said BSA president and CEO Robert Holleyman."
Hmm, I wonder what the average is? I'd like a better understanding of what they are thinking, too. Please
"The evidence is clear: the way to lower software piracy is by educating businesses and individuals about what is legal"
Yes, I agree, just use Linux, then you can show these characters the door.
Enterprise support costs an arm and a leg and quite often costs more than a proprietory package that comes with support
PS: That isn't a dig at linux, I really like it and use it. It's just some of the people who shout loudest about using linux for everything have no idea what TCO means
Maybe so, but..
in the context of the BSA etc., using Free software (not necessarily GNU/Linux) means that you never, ever have to worry about licences, whether you've got enough bleedin' CALs or whatever. Imagine if everyone was doing it - the competition would drive support costs way down, & software quality/feature set would improve likewise.
I'd also like to say "$59bn worth of software" should be "$59bn price of software" - its pretty debatable that some of those licences are worth more than $0.
Not free: Free
There's a difference.
> Enterprise support costs an arm and a leg
It doesn't have to.
This is part of the point of Free software: if everyone can see, modify, and redistribute the source, then you end up with a competetive market for support. Costs go down if you shop around.
> quite often costs more than a proprietory package that comes with support
You do, of course, need to make sure you're comparing apples with apples. IME, the support bundled with many of these proprietary packages is rarely worth that title; for real support, you generally have to pay extra.
> some of the people who shout loudest about using linux for everything
> have no idea what TCO means
That was a Microsoft marketing campaign of a few years back. And what came out of it was that the TCO of Free software is generally much lower; Micrososft's figures took the tack that users of Free software would need mahoosively expensive training courses to get up to speed, whereas users of Microsoft products would not need to spend anything ever on support costs. This is, of course, utter bollocks.
[Disclosure: I make my living supplying support for Free Software.]
And what are the enterprise support costs for running "pirated" software?
Can we have a strawman icon?
Re: Linux != Free
A lot of enterprise software charges extra for support. Microsoft is one of the biggest offenders here. It costs us $250 every time we pick up a phone to call them. EMC, Cisco (yes, they have software), Adobe, and basically every big education software company (I work for a school district) have support contracts that cost just as much as support contracts for Linux. Support is only free with the proprietary software for consumers. Enterprises pay out the nose for it.
Besides, an average Linux geek is able to get free support by hitting a chat room or IRC channel populated by above average Linux geeks quicker than some of those companies can return your call.
The evidence is clear
The way to stop piracy is to have appropriate pricing models. People recognize that the software development costs are the same whether a million copies are sold as when 100 million are sold. They also have an idea in their head, rightly or wrongly, about what a "fair" pricing model for a specific piece of software is, and when they believe the pricing model is too high, they are much more likely to install or "loan" one license to more PC's than the license is for. When the pricing is perceived to be "fair", then they usually respect the license restrictions.
how do you know how much is fair?
The problem is: what is a fair price? How does the user know what is fair? I mean yes, the development cost is the same when selling 100 million copies or selling 1 copy, but how do you know how much we sell? Did anybody bother to calculate how much it would cost to develop that software? Did anybody ever think that for each sale made there is a cost in support and in the sale it's self? Sometimes up to 50% goes to the person/company that sold the product, not to the one that made it. Did you know that? Does that go into your fair price too?
I have a software company in Eastern Europe (where price are considered to be small and everybody outsources). A programmer costs about 3000$ a month with salary/taxes/social security. Developing a small application (like dentist office management tool) needs a few months and a team of a few people to develop. For a 6 month of work and 4 programmers we already have 72000$ just in development costs.
Now what is a fair price for the application? What do you think is fair? 200$? Noooo....you'll scream....windows does more and costs less. Unfair! Lets steal it instead. Well it's all about volume. My case there is a small target audience, reached hard. We are not expected to sell millions of copies. In fact in order to break even (and not make any profit at all) we are going to need to sell 360 copies at 200$. But oh wait: the application doesn't sell it's self so put some marketing in it. Selling 360 copies requires finding 360 doctors and convincing them to pay 200$ (if they think it's fair), and don't already use another app. For each sold application you'll have a cost in marketing. Then you realize that with the cost of sale you need to sell about 500 copies to break even.
You sell your 500 copies and you notice that your phones are ringing all the time. There are 500 users that need support. You hire some support people to answer the phone and assign a developer or 2 permanently on dealing with bugs and issues, and offering patches to customers. Just supporting your small application costs about 10000$ a month.
In the end you realize you can't sell more then 500 copies because there aren't enough dentists around you that need it. Most of them already use a competitor product (or if your product is truly good - most of them will use a pirated copy of your product) or some simply use Excel (most likely pirated). Your own pirated copies become your competitor. You can't sell because they already have it for free.
Now the above is just hypothetical. It's just an example. We sell a different kind of application with a different (unfair) price. The hard truth is in our case that we know there are about 3 times more copies in use then we sold (we have some callbacks in the app). We are at the point where we haven't even broken even yet and I think it's unlikely to. We are about to discontinue the application ironically not because it isn't needed or used but because of people steal it instead of buying it.
As for difference between piracy and theft: is there any? If you shoplift a dvd/cd with my software from the store or download it from a torrent do you think it makes any difference for me? The dvd it's self only costed 50 cents. I don't even care about it. The real value was the software in wich I invested possibly hundreds of thousands of dollars. Why is it any different that you go shoplifting for software in a store or download from torrents? From my perspective the difference is 50 cents. Why does somebody go to jail for this 50 cent difference if he steals from the shop around the corner and just a file (perhaps) if he downloads it? I don't get it. I go out of business anyway....
We're not talking small niche software makers making specialised enterprise applications for small specilalised markets here. FWIW, just about everyone who's thought about it for a bit understands the tendency that the more bespoke, the more expensive. You may in fact be pricing your software a tad too cheaply. Not because you're not making a profit (that too of course) but because "everybody knows" your software /is/ a niche product, and is comparably cheap for such a specialised product/.
Let me give you a real-world example: Someone I know makes clay cups and dishes and such by hand, and tried to sell them at faire. Priced at five euros a mug, they didn't sell. Priced at fifteen euros, they sold in large quantities. Apparently five was just too cheap.
Of course physical objects don't copy as easily as software, unless it can be done by the chinese in plastic, but that doesn't mean price elasticity doesn't translate. I could be horribly wrong in my analysis, but the point is that you may have to rethink your pricing. Clearly, it is not working for you right now.
The BSA, OTOH, has been "studying" large-scale piracy because that's where the money is for their backers. They're very much a shill for big software. Windows may be far too expensive at $200, and not merely (but also) because they make obscene profits selling millions of copies, but moreso because "everybody has to have a copy"* and thus doesn't really have a choice in buying. The market mechanisms are a tad different at that scale.
But even if that wasn't the case in the western world, there's still the problem that the BSA is conveniently overlooking and that's that while $200 for a copy in "the west" is about what we've come to expect from vendors now becomes horrible price gauging in less developed places. And even in the west, "everybody knows" that with the huge profits they're making (picture somewhere over 90% margin on each copy sold), micros~1 could drop the price to $20 and still make a profit.
In fact it would be better if they did for them too because it'd force them to bleed so much on the unprofitable parts of their company that they now can just keep and prop up with the old money makers, windows and that office suite.
So instead of trying to squeeze $200 out of people who don't make that a month, or to take failing to do that as an excuse to double up the legalistic squeezing of people here, as the BSA is advocating with this "report" again, they ought to think more about what the would-be buyers think it is reasonable to pay. That's quite a different take from the current marketeering efforts that entirely centre around figuring out what is they think is the maximum that same buyer can be made to pay. They're squandering the trust in their market position that way, and it's only because they're so big that they can get away with it.
The thing is that this is about big software makers, not small ones. The same thing, by the by, is true for big media. I recently heard about a small film maker in I think it was Kenya, where the market for one dollar black market DVD copies is far, far larger than the market for twenty dollar official big name DVDs that nobody can afford as the average buyer doesn't make that in a month, who made a film and distributed it himself for a dollar a piece, and made reasonable money out of that. Instead of trying to sell it for ten and still see no monies from the black market copies at all. The point is that you need a strategy to match the market. The BSA doesn't do that. They just demand more legislation and more enforcement and that is that.
Oh, and it is "itself", not "it is self", just as "it's" is short for "it is", and is not a possessive. No, I'm not a native speaker either. This is a hint, not critique.
* I don't use their software, but I digress.
Just to explain my downvote - you missed the point of this article. As the commenter above me very eloquently said, this is not about specialist programs but about programs with huge sales volume and making vast amounts of money.
Developing Countries Pirates - No way
In order for developing countries to get on they have to beg, steal and borrow so it is no suprise this report shows them to be the worst pirates. If large corporations and western civilizations showed more respect to these people (i.e. treated them as fairly as their own) then they would not need to pirate in the first place.
So the ludicrous conclusions of BSA presume that people in developing Thailand would be willing to pay a years salary for a piece of software that cost a Brit / Yank / etc a weeks salary... if only they were better educated about the law.
Also, the estimate "Almost a half of all PCs" seems a tad optimistic. Generally the sort of people that fill in "Are you using illegal software?" questionnaires are only the ones who aren't doing it. From my experience the estimate ought to be "Almost all".
WTF are they pirating ?
I ( by dint of collecting the old computers that others throw out ) have more license keys for windows 2000(still the best windows), XP, Vista and 7 than I actually use .
What software is there that is worth pirating? I gave up on office when it failed to properly run the text through the paragraphs of a pamphlet ( yes, version umpteen of commercial software from the industry leader had a stupid bug in it ) and now I use open source because I am less annoyed with problems with a free product than problems with something that cost me money.
Transcoding, disk burning, remote login, web browsing, hard disk utilities and anything else I need I do with open source.
Read the license. Getting a 2nd hand computer with a copy of Windoze on it doesn't give you a valid license - it's non-transferable.
From the "Microsoft Windows License guide":
"Q. I have acquired a used PC with the original manufacturer’s
Windows desktop operating system COA on the computer’s case
and the matching copy of the original OEM recovery media disk
or recovery media image that came with the PC when it was new.
Is the Original Equipment Manufacturer (OEM) Windows desktop
operating system on this used PC properly licensed?
A. Yes, in this case it appears that you have the genuine OEM
Windows desktop operating system software which is designed
exclusively for computer manufacturers to preinstall on their
//Though Linux is still a better choice for a used PC, IMHO
$59bn lost sales?
Don't believe you.
Maybe $59bn "marked retail price" but most of those wouldn't have resulted in a sale, and the user would have learnt another (free) piece of software to do the same job.
Cryptographic licensing ins't that hard, but none of the major software only players use it - because a pirate copy still has positive value on their business plan, it promotes the software, and perpetuates lock-in.
There are some problems with your post.
"Cryptographic licensing ins't that hard, but none of the major software only players use it - because a pirate copy still has positive value on their business plan, it promotes the software, and perpetuates lock-in."
Exactly. That's why in the good old days, 1234-1234567 was a valid product key for Windows NT.
Thieves not liars
if they actually confessed to using pirated software... so not entirely that dishonest..
It's not about price
"The way to stop piracy is to have appropriate pricing models."
If software is pirated because it is overpriced, there would be no Adobe or Microsoft, they would have filed for Chapter 11 years ago and everyone would be using OO, Gimp etc on Linux.
So it isn't about price.
They keep MS and Adobe afloat because they get audited every now and then. If people didn't have pirated MS warez, they would've gone down the Linux path, thus depriving MS from adopters, which will in turn recommend whatever they use at their workplaces.
The way to stop piracy is to have appropriate REGIONAL pricing models
Microsoft and Adobe price their software at the maximum level that the developed world can take. They then force that price level on third world countries where the dollar level purchasing power is much lower.
Take a look at The Economist's Big Mac Index for an example of what I mean.
There's a strong correlation between the countries at the bottom of the BSA list and the countries with the worst index score on the BMI.
So if all Windows editions were £5(say) for a legit copy on a DVD with massive discounts for bulk & you could install on multiple machines, you think people would still bother to pirate them as much in the UK? Maybe some would on principle, but businesses wouldn't - the same goes for any other software.
If its cheap enough, surely anyone would rather have a legit copy with all extras & manuals & no malware risk, than say a torrented cracked copy.
Mars Bar Index
There's also the Mars Bar Index that depicts the true historical rate of inflation.
Thanks for that
"The way to stop piracy is to have appropriate REGIONAL pricing models" and give my employer yet another incentive to outsource my job to somewhere cheaper ... cheers
Another One To File Away Under...
"But they would say that, wouldn't they."
Organisation that needs to justify its existence issuing press release, justifying its existence. I suggest that the bin is a better place for these things.
The easiest way to lower the 'piracy' figures is to stop making them up!
The evidence is indeed clear, but the conclusions are tenuous
The way to deal with piracy is to give everything away for free.
(Or ensure everyone in the world is on an even economic footing, of course. But lets be reasonable here)
Any other suggestion is merely discouragement.
"The highest instances of pirated software were in [some others] Saudi Arabia."
how you gonna type without any hands, sparky?
I dont know if you'd get the hand treatment for stealing software from the western infidels , only for eastern things, like letting your wife go to school, or out in public
The bullshit of "lost sales"
MS Office is a good example of pirated software not being a lost sale.
I know many people who have downloaded and use pirated versions of MS Office because that's what they’re familiar with from work but they would all soon learn to use one of the free alternatives like open office if confronted with a licensing fee.