Australian software industry loses $264 million through piracy

Software piracy in Australia costs vendors $264 million a year in lost sales, according to the fifth annual benchmark survey on global software piracy conducted by International Planning & Research (IPR).

In the five years to 1999, the survey, on behalf of the Business Software Alliance (BSA) and the Software & Information Industry Association (SIIA), estimated that Australian industry lost $1.4 billion in retail software revenue due to piracy. Australia's piracy rate fell slightly from 33 per cent to 32 per cent according to the latest global study. However, chairman of the BSAA, Jim Macnamara, said having one third of all PC software stolen was an unacceptable situation for the industry.

"Those who feel that illegal copying of software at that rate is acceptable are ignoring the fact that it is not only software manufacturers who are losing out. According to BSAA research, local distributors and retailers lose another $286 million a year in sales revenue through piracy. This is costing Australian businesses and costing jobs," Macnamara said.

"It is also a threat to Australia's future in the information age," he warned. "Consumers and businesses understand and accept that stealing physical property such as cars or groceries are serious offences, but we harbour a Robin Hood attitude towards intellectual property. However, it is intellectual property that is driving economies in the information age and it needs to be valued and protected," Macnamara said. "If Australia wants to be a ‘smart country' and take part in the new economy, it needs to reduce its intellectual property piracy rates which are higher than other developed countries," he warned. Australia's software piracy rate of 32 per cent compares with 25 per cent in the US. Revenue losses to the global software industry due to piracy were estimated at $21.1 billion ($US12 billion) in 1999. North America, Asia and Western Europe accounted for most (83 per cent) of the revenue losses. These regions are the predominant users of software, leading to the most significant losses. The 10 countries with the highest dollar losses due to software piracy are (in rank order): the US, Japan, the UK, Germany, China, France, Canada, Italy, Brazil, and the Netherlands. Total losses for the top ten countries were $14.8 billion ($US8.4 billion), or 70 per cent of worldwide losses. In terms of piracy rates, the study estimates that more than eight in 10 business software applications are pirated in 19 countries including Vietnam, China and Russia.

Study: corporate software piracy topped $21b By Todd WeissLost revenue to software vendors because of piracy by corporate users reached $21 billion ($US12.2 billion) last year and has amounted to more than $59 billion over the past five years, according to a study released by two software industry trade associations. And that's not the worst of the news for vendors, according to the Software and Information Industry Association (SIIA) and the Business Software Alliance (BSA). They said the total losses from software piracy are far greater because the study only included unauthorised use of products in corporate workplaces and not in homes or smaller businesses around the globe.

"I think that this is the tip of the iceberg," said Diane Smiroldo, a spokeswoman at US-based BSA. "This is a conservative estimate when one looks at the impact of online piracy." Peter Beruk, vice president of antipiracy programs at the SIIA in Washington, said solutions to the piracy problem exist but software makers aren't taking universal advantage of them. "The industry has the capability to protect its works from unauthorised usage," Beruk said. Most promising, he added, is the emergence of application service providers (ASP) that store programs on central servers for access by end users instead of having customers install the software on their own systems.

By controlling access to the software at the server, piracy essentially could be eliminated, Beruk said. The ASP model "will probably go farther" than any other approach in making software piracy less of an issue, Beruk said. However, Microsoft gave up its membership in the SIIA earlier this year after the trade association filed a friend-of-the-court brief taking the side of the US government in its antitrust case against the software giant. The SIIA filed another brief this week, along with the Computer & Communications Industry Association, arguing that Microsoft should be broken up into three separate companies.

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