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Study Estimates Software Piracy Rate At 35%

A study by the Business Software Alliance is estimating global software piracy at 35% of all software installed last year, coming out to $40 billion in lost revenue for software makers, with 15% more losses since 2005, $5 billion not going to the people who created the software. The report also said that piracy in China dropped 10% over the last three years, saving $864 million in losses, while legit sales in China grew 88% since 2005 to $1.2 billion. Russian piracy dropped 7% over the last three years.

Techdirt says the BSA releases bogus stats every year, and are often debunked. I’m sure there are people who benefit from reports like this (companies like Microsoft, obviously), but there’s no doubt that piracy is real and very expensive for the world software industry. Maybe these stats aren’t perfect, but we know piracy is rampant and a serious issue, and can’t pretend it doesn’t exist or need to be addresses. I’m the first to say that some piracy is often times a necessary evil, but ignoring it helps no one.

May 17th, 2007 Posted by | General | 3 comments



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3 Comments »

  1. The “lost revenue” figures are a total fabrication and an economic impossibility. You can’t “lose” what you never had. M$ receives an enormous amount of revenue from its software sales. If “illegal” additional copies are made (at the copier’s expense) there are no resultant “lost” revenues to M$ — there are no additional costs to M$, either. When you get down to it, the people making the additional copies (the Chinese, for example) are generally too poor to afford the very high prices dictated by M$’s monopoly pricing structure. Even if it was physically impossible to make copies of M$ software there would be little or no additional revenues to M$ — the potential copiers would still be unable to afford to buy copies at the mandated M$ price. Again, there are no “lost” revenues. Nor “lost” costs, either.

    Comment by LouSam | May 17, 2007

  2. Are you trying to say that when software is pirated, there are NO lost revenue at all? That’s ridiculous! Yes, you can make an arguement that the lost revenue does not equal the actual money lost due to piracy, but certainly if no one was pirating software, Microsoft would make more money. That’s a given.

    We’re not talking music here (and if you think file sharing hasn’t hurt the music industry, try telling that to their stockholders) which has little necessity value. We’re talking operating systems. Without one, it’s kind of hard to use a computer. Yes, some people would use Linux instead of buying Windows if they absolutely had to pay for it, but Linux is free now, and people choose Windows because it runs their software.

    Piracy has a cost. Yes, this study is not estimating the cost of piracy perfectly, but no study estimates anything perfectly.

    As for people who cannot afford Windows, without piracy Microsoft would be forced, by the economic conditions in those countries, to price Windows closer to what those people can afford. As is, because of piracy (which Microsoft cannot compete with on price), Microsoft prices Windows too high, so that those who will not use piracy get the company some money. If piracy were impossible, Windows might be lower priced in China so that it would get some sales in that country, as opposed to forcing people into alternatives.

    Is that an assumption? Absolutely! So is what you said. So don’t give me conjecture and try to make an argument like “no resultant lost revenues”. The only fact in this discussion is: Software piracy is illegal. Even if it costs no one lost revenue, it is still illegal, and thus serious. You have two options: Stop piracy, or change the law. Anything else is illegal.

    Comment by Nathan Weinberg | May 17, 2007

  3. The term ‘piracy’ is pure propaganda. Piracy on the high seas involved cannons and death. Even when Drake and his fellows raided the treasure ships of Spain, sailing east from the Americas with gold taken by force from the Incas, they were technically not ‘pirates’ as they had ‘letters of marque’, issued by their Queen, authorizing them to do so.

    Let’s face it, Microsoft’s main asset is the ignorance and timidity of the people who direct electronic data processing in big corporations. IBM used to own that asset. Bill Gates stole it from under the noses of people there who thought that the mainframe would always be king.

    Microsoft has a near-monopoly on the software these people use, and the reason isn’t quality, it’s the purchasing authority’s ignorance, laziness, and timidity. The fact that Microsoft can charge fees that are more than 75% profit proves that this is a form of extortion. By the way, the first layer of the extortion is the hardware manufacturers, who are intimidated into loading Windows(tm) on every mass-marketed PC.

    A number of enlightened places, like the cities of Munich and Wellington, the province of Estremadura, and at least one Latin American country, have standardized on free software.

    Comment by Albert L. Rogers | May 22, 2007

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