Are Australians still thieves?
Are Australians still thieves?
By Liam Tung
May 16, 2007: We’ve fought hard over the last 200 years to shake off our image as thieves and convicts. Back then we could be shipped off for stealing a loaf of bread. Today, our light fingers go for software.
The Business Software Alliance (BSA) yesterday released a report which estimates of the $100 billion spent on software used by businesses each year, approximately 35% or $40 billion is pirated or used beyond the licence’s expiry. The global survey, conducted by IDC on behalf of BSA concluded that while the worldwide rates were steady at 35%, the value of those losses increased by 15%.
Within this picture, Australia represents 1.5% of the $40 billion global market in software piracy, but the 35% rate of piracy in Australia (down 2% since the 2005 survey) is 10 percent higher than comparable countries like New Zealand and the US.
Jim Macnamara, director & spokesperson for BSA said, “This two per cent reduction in piracy is pleasing for Australia, but a rate close to 30 per cent remains unacceptable. It’s good to see some movement in figures, but Australia is lagging behind the US and New Zealand markets which have rates of 21 to 22 percent.”
He admits there is no explanation why New Zealand has lower rates of piracy but says the US could be explained by awareness campaigns.
He attributes the increase in losses to expanding markets such as China but maintains that the indicator to judge the success of BSA’s war on piracy is the percentage figure, not the dollar value.
The increase in lost revenue came from five key regions:
• Asia Pacific, increased from US$8 b to US$ 11.5 b
• North America - increased from US$ 7.6 b to US$ 8.1 billion
• Central/Eastern Europe - increased from US$ 3.1 billion to $4.1 billion
• Latin America - from US$2 billion to US $3.1 billion
• Middle East/Africa - up $300 million from $1.6 billion.
Meanwhile the European Union and Western Europe experienced decreases in software piracy by roughly 10% each, representing lost revenues of US$10 billion each.
In more than half the 102 countries studied, the piracy rate exceeded 60%. Typically these were lesser developed countries. In less than a third of the countries, the piracy rate exceeded 75%. Emerging markets in Asia Pacific, Latin America, Eastern Europe, and the Middle East/Africa accounted for one-third of PC shipments today, but only ten percent of spending on PC software.
BSA noted a marked decrease in the rate of piracy in China over the last three years by 10%, reducing losses in China by US $860 million. Year on year however the figures were less impressive, dropping 4% since the 2005 study from 86% to 84%, leaving it in fifth position in the APAC region’s worst offenders list. In front were Vietnam, Pakistan, Indonesia and ‘other countries’.
The expansion of the Chinese market for software is indicative of why the overall losses from software piracy increased 15% despite the stagnant rate of piracy software. The increase in the overall size of the Chinese market for software since 2003 has grown by a staggering 358%; between 2005 and 2006 alone it had increased by 88%. Legitimate software revenues in China are now worth approximately $1.2 billion. With this increase and despite the 4% drop in piracy rates in China, the overall loss in value from the remaining pirated software increased by US $1.6 billion.
Some of the activities BSA claims are driving out piracy in the Chinese market are a mixture of education and legal actions, including regulations requiring a legal operating system on all PCs made and sold in China, government and enterprise legalisation programs, internet regulations and WIPO Treaties Ratification, the BSA Annual Meeting in Beijing April 2006 and administrative actions against end users.
According to IDC in its 2005 report “Expanding Global Economies: The Benefits of Reducing Software Piracy”, the effect of a 10% drop in piracy in China could directly contribute US$135 billion to Asia’s economies, create 2 million new jobs and generate US$14 billion on tax revenues.
The local perspective
BSA has welcomed the Federal Government’s allocation of $12.4 million over two years to tackle the problem of intellectual property (IP) crime. This consists of $8.3 million over 2 years to strengthen the capability of the Australian Federal Police to pursue serious and complex IP crime. The Commonwealth Director of Public Prosecutions will receive the remaining $4.1 million over two years for new prosecutors and training to enable the prosecution of IP crime and finance the pursuit of proceeds of crime.
McNamara believes the additional funding will bolster BSA’s four pronged approach, involving awareness campaigns, provisioning free downloadable software asset management tools to businesses, litigation and technological measures such as product registrations.
He says, “It’s not a quick solution but these methods are working. We think it’s a combination of raising awareness and assistance in the middle. Many SMBs haven’t thought about licensing. There’s also a lot of under-licensing which occurs by accident. Quite a lot of industry money has been spent on offering audit management tools downloadable.
Litigation is limited to serious offences. McNamara says, “It must be substantial or a flagrant, repeated abuse. We’ve had court cases where IT managers were trying to get budgets, but management refused to buy software.”
He says, “A number of years ago, nobody cared about software piracy. We want the government to care. We don’t think management or the government cared. Now the Federal Government has increased funding on large scale IP theft, while the Federal Police will go after counterfeiters, including companies and management in breach.”
McNamara believes the rise in corporate governance issues and ISO 9000 standards relating to software mean that the issue will be treated with more gravity. He says, “The law in Australia holds that a manager - even if they don’t know about it - if they should have known it, can still be held liable. When you look at legal environment, we’re finding it’s on the radar of management.”