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Rising software piracy tops 40% mark

Losses valued in excess of $50 billion

By CBR Staff Writer

The value of unlicensed and pirated software could be as high as the $50 billion a new study has concluded, up 5% on earlier estimates.

The sixth in a series of research studies carried out for the Business Software Alliance has found software piracy rate has risen for the second year in a row. “The worldwide software piracy rate rose from 38% to 41%, because PC shipments grew fastest in high-piracy countries such as China and India, overwhelming progress elsewhere,” the BSA said.

While emerging economies account for 45% of the global PC hardware market, they account for less than 20% of the PC software market. 

If the emerging economies’ PC software share were the same as it is for PC hardware, the software market would grow by $40 billion a year. 

Lowering global piracy by just one point a year would add $20 billion in stimulus to the IT industry according to claims made by IDC, the report’s authors.

The study found that of the 110 economies studied, Russia has made the most progress, with a one-year drop of five points to 68% and a five-year drop of 19 points.

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The lowest-piracy countries are the US, Japan, New Zealand, and Luxembourg, all near 20%, compared with areas showing the highest-piracy, countries like Armenia, Bangladesh, Georgia, and Zimbabwe, which were all over 90%.

By region, the highest-piracy rates are to be found in Central and Eastern Europe, where levels are estimated to be running at 67%.

Piracy is putting a drag on economic recovery and long-term growth, the study concludes. For example, for every $1 of software sold in a country, there is another $3 to $4 of revenues for local IT service and distribution firms. 

It not only undermines local IT service firms, but gives illegal software users an unfair advantage in business, and spreads security risks. The spread of the Conficker worm has been attributed in part to the lack of automatic security updates for unlicensed software. 

Piracy is best counted with a combination of consumer education, strong intellectual property policies, effective law enforcement, and legalisation programs by businesses and government agencies, the BSA said.

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