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BSA Claims 35% of Software is Pirated 617

Posted by Zonk
from the that's-a-lot-of-eyepatches dept.
hdtv writes "Business Software Alliance says 35% of packaged software installed on PCs globally is pirated, and estimates the losses at $34 bln. From the article: 'The countries with the highest piracy rates were Vietnam (90%), Zimbabwe (90%), Indonesia (87%), China (86%), and Pakistan (86%). The countries with the lowest piracy rates were the United States (21%), New Zealand (23%), Austria (26%), and Finland (26%).' TechDirt analysis debunks some of the myths: 'The BSA claims that all of these "lost sales" represent real harm to the economy. It's the same bogus argument they've trotted out before, which is easily debunked. Much of that unauthorized software is being used to make firms much more productive than they would be otherwise -- probably benefiting the overall economy quite a bit.'"
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BSA Claims 35% of Software is Pirated

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  • Ironic (Score:3, Interesting)

    by WinterSolstice (223271) on Saturday May 27, 2006 @06:27PM (#15417752)
    I suspect most of that is Windows software... I think that for Mac software it is probably a bit lower. Most Mac users I know are full on legit. There are a couple... but every Windows user I know has TONS of illegal crap. I wonder - is there a bounty?

    -WS
  • by EZLeeAmused (869996) on Saturday May 27, 2006 @06:36PM (#15417802)
    It's the same bogus argument they've trotted out before, which is easily debunked. Much of that unauthorized software is being used to make firms much more productive than they would be otherwise -- probably benefiting the overall economy quite a bit.

    That's B.S. So a firm might be more productive (and profitable?) using a software package, thus contributing to the general economy. No argument with that. But I fail to see how this debunks the BSA's arguments. Is techdirt (or Mike, or whoever) arguing that the same firm would be less productive if it had paid for instead of pirated the software?


  • by BeerCat (685972) on Saturday May 27, 2006 @06:42PM (#15417832) Homepage
    In the early days, Microsoft turned a blind eye to piracy in US / UK / Canada because "borrowing" the disks from work to install at home was the gateway drug that lead to the rise of Word as the dominant word processor. (WordPerfect Corp dropping the ball with WP for Windows didn't harm it either)
  • Doh (Score:3, Interesting)

    by slackmaster2000 (820067) on Saturday May 27, 2006 @06:55PM (#15417876)
    I've heard a lot of arguments about why software piracy statistics are bogus, but none as *dumb* as saying that companies using software illegally will be more productive because of the software, thus contribute more to the economy.

    Despite the fact that it represents some pretty screwed up values, it just doesn't make much sense. If a company can experience growth related directly to the stealing of software, then they could have purchased the software, and they still should have grown. Buying software is just a cost of doing business, and shouldn't be having that much of an impact on the bottom line all by itself. Perhaps we should all just start bending the rules and pirate and steal our expenses away because hey, we're hiring more employees, we're paying our investors, and we're making more profit, which is good for everybody, right? Yeah, that makes a lot of sense to me.

    When it comes piracy on the private, home use level, I think that the piracy numbers they always come out with are ridiculous. Just because the software is installed and being used does not mean that a sale was lost. This isn't a defense of piracy, just a reiteration of distinction between piracy and theft. They are not the same thing. But if we decided to treat them as the same thing for the purpose of creating an accurate yet misleading argument, then oh no, Software Company X is out a gazillion billion dollars!
  • by 8ball629 (963244) on Saturday May 27, 2006 @07:10PM (#15417942) Homepage
    People steal software because they can get away with it, not because they are struggling. Do those struggling businesses use stolen chairs and desks too?
    In most situations I'm sure you're wrong. Yes they download it because they can but most small companies are struggling especially in the USA (I'm not sure where you're from - looks to be the UK). Right now our economy isn't doin the best and I'm actually employed at a small company. I'm sure our software isn't pirated but we don't do too bad as far as business goes and we don't require too many programs in the first place. We mostly use open source programs but I'm getting a little off topic here.

    My point is some companies HAVE to pirate software to do business. Sure they might buy legit copies after they end up making money but from the beginning most companies just can't afford to go out and buy several licenses of software that goes anywhere from $50-$10,000. You're comment about stealing chairs and desks is a bit moronic as well. If those struggling companies were forced to purchase licensed copies of said software than I'm sure they wouldn't have desks or chairs because they couldn't afford them. And if they could get some desks and chairs they'd probably look to a used furniture store or the like.

    It's kind of hard to find 10 used licenses of any program on eBay.
  • by fermion (181285) on Saturday May 27, 2006 @07:12PM (#15417948) Homepage Journal
    I think that the real harm depends on what you are measuring.

    For example, piracy may help the economy achieve a kind of uniformity of software that is very easy to work with. For example, even is a small firm cannot afford a copy of MS Windows and Autocad, they can always pirate a copy. We benifit because the draftperson does not have to learn multiple systems, and, as the skillset is much easier to garner, can be hired much cheaper than a traditional draftsman. OTOH, as Autocad has no compitition, they probably charge quite a bit more that market, and can continue to do so as they do not need to cater to the small shop.

    So, the primary harm that piracy exacts is probably in terms of promoting high prices and reducing the responsiveness to consumers. In competative markets, like the database, there is an effort to get versions out to users that are either low or no cost. This allows the student or amatuer to gain the experience with product without paying professional prices. This is similiar to what once would happen with equipement, such as typewriters. One could buy an old selectric and gain expereince.

    In noncompetatve markets, however, the only way to get a low cost version of many applications is to pirate. MS would like us to believe that we can buy a used PC, but we must buy a new license to the OS. The student edition of MS Office is $120, which is already way too much, but to get access it rises to $200, which is really a joke. They are charging more for Access than Foxpro! Autocad is little better charging $150 per year. Mathematica is little better. Labview shows what can happen when a competitve market exists, with a version at $80.

    So, what we have is situation in which piracy has lead to extreme economic damage by promoting monopolies in certain sectors. The vendors are perfectly happy to allow the piracy, as it is partially why they are succesful. I will always remember the time in the late 80's when my boss told me he was going to get his first PC because he would not have to pay for any software, unlike on the Mac where most of our software was properly acquired. However, a vendor cannot survive with no sales, so the BSA tries to create opportunity costs, at least for certain customers, that are higher than acquisition costs.

    As a student I got MS Office, Mathematics, Foxpro, etc, for a song, so I did not prirate. If I were a student, or new to the IT industry and just wanted to learn, I would think long and hard about buying the software at the offered prices or borrowing a copy.

    Ideally I would like to see most piracy stopped. I would like to see offer prices that are in line with what a competative market will bear. I also hope that the BSA pulls the rug on china and forces either the software vendors to cut thier price of the Chinese to find another solution. We will then learn hard and fast what it means to not communicate with an important trading partner.

  • by davepk (691946) on Saturday May 27, 2006 @07:16PM (#15417964)
    What does the IRS say about these claims of loss? Surely if a company truely believed the loss was actual they would try to claim it. Does that actually occur? What would the guidelines be from the IRS?
  • by Fulcrum of Evil (560260) on Saturday May 27, 2006 @07:36PM (#15418048)

    I'm sorry but the average home user doesn't have the cash for a copy of Photoshop, so yeah, they pirate it. If they couldn't pirate they wouldn't go out and buy photoshop, they'd download the Gimp.

    Enter Photoshop elements - it's cheaper ($90), works similarly to PS, and is limited in ways that are likely only important to graphic artists, who can afford a copy of PS along with Illustrator, Maya, etc.

  • by realitybath1 (837263) on Saturday May 27, 2006 @07:47PM (#15418089)
    This is the WRONG counter to their claims.

    It may not sit well ethically with some people or be the best counter, but it IS a valid argument. People/the economy can be better off with an illegal activity. Specifically, the claim that is being focused on is;

    real harm to the economy

    rather than the "lost sales" aspect.

    It isn't suprising that the highest piracy rates(per comp. rather than per cap.) are in the poorest countries... and it wouldn't be suprising if the poor stealing from the rich would result in a (world)economy wide productivity boost, since the poor have a much higher productivity increase potential. I think the productivity change from a underemployed/unemployed poor person to working poor person is much larger than that from a well off developed world worker to an even better off worker.

    It also helps smooth out the investment cycle, where you don't get the massive wasted infusions of cash that just get funnelled into a few pockets because economic friction doesn't allow for sound capital mobilization/development over such a short timespan. Sure, Ferrari manufacturing(were else would the uber rich spend that cash?) might suffer a hit, but other sectors will nicely compensate.

    The fun thing about economics is that you can make an argument from almost any side of a debate, with ethics being almost irrelevant. The 'establishment' (for want of a less hippiesque word) has been doing it for a few centuries, and I say it's high time everyone else get in on the act.

    Oh, did the BSA substitute "the economy" for "the economic sector we represent"? Naaaah.
  • by Buran (150348) on Saturday May 27, 2006 @07:57PM (#15418114)
    I'm sorry but the average home user doesn't have the cash for a copy of Photoshop, so yeah, they pirate it.

    Or maybe they go and buy a copy of Paint Shop Pro or GraphicConverter or one of the other quite-capable yet reasonably-priced alternatives that do everything that most home and many business users want?

    The simple fact that someone chooses not to buy Photoshop yet has a potential valid use for it doesn't mean they pirated Photoshop. That kind of argument doesn't account for the fact that alternatives exist.

    I actually once saw the fact that an admitted college student was using Apple's Aperture software turned against said student. If he's a student, the argument went, he must have pirated it because he wouldn't have been able to afford it otherwise. Never mind that the academic price (at the time) was hundreds cheaper than the $500 (at the time) the standard version cost. Never mind that some students DO have the money to buy academically-priced apps (that's the whole point of academic pricing!). Never mind that people are often naturally honest whenever they can be.

    Of course, this being Slashdot, it wasn't too surprising but it disgusted me greatly that the assumption was that illegal activity had occurred when there was absolutely no evidence for it. It disgusts me now, too.
  • by exp(pi*sqrt(163)) (613870) on Saturday May 27, 2006 @08:10PM (#15418155) Journal
    ...when I could have paid. If someone offered it to me for $10 I'd probably pay it. I might even consider paying $12.50. But any more and I'd use the Gimp. So when they do their figures I hope that the BullShit Association counted that as $12.50 and not the $1,000 or whatever ridiculous price it is that Adobe charge.
  • First error. (Score:3, Interesting)

    by Vo0k (760020) on Saturday May 27, 2006 @08:13PM (#15418166) Journal
    The stupid assumption: If I didn't pirate it, I'd pay for it. No. If I didn't pirate it, I wouldn't use it.

    I have about a dozen or so of good original games. The rest of my games is pirated, and you can be sure I wouldn't spend money on them. Legal? No. Fair? Maybe yes, maybe not. Harming economy? Total bullshit. The worst harm to the economy comes from me playing these games instead of working. If I didn't pirate them, the authors wouldn't see a single penny from me just the same. I just wouldn't play them.

    The situation about utility software is even more twisted - same "not pirated=never used" often applies here too. Except pirated means using the software for profit and eventually purchasing originals when you can afford them (earning money on the pirated version first). Means the authors WILL eventually get their fair share. If I'm too afraid of get busted for pirating the software to use it though, they won't see a penny from me.

    Last but not least, Postorder. Opposite of preorder. Preorder is when you pay now, get program later. Postorder is when you download the program now, pay later, at your leisure. Don't worry, Bethesda! I will pay for that copy of Oblivion I got... eventually! :)
  • by TorAvalon (971986) on Saturday May 27, 2006 @08:15PM (#15418170)
    From what I've heard, that's quite true. However, in the years since then they've actually explicitly stated that you can do this in the license agreement.

    Too true. The thought was that you could be only using the Apps at work or at home, but not both. Later my company(and MS) encouraged having the same office suite at home as we did at work. I got a CD of Office 2003 Pro with all the bells and whistles for $25.00. XP Pro was around $50.00, and my favourite thing, AOEII was free. Oh yea same with Mcafee Enterprise(free).
  • by darkonc (47285) <stephen_samuel@@@bcgreen...com> on Saturday May 27, 2006 @08:42PM (#15418255) Homepage Journal
    It's a bit of both. Sometimes people who could easily afford to buy a copy of some software will still pirate it "because everybody else is doing it" --- The fact that microsoft officially winks at pirated copies doesn't quite help reduce the volume. Microsoft knows that if they were to press too hard on pirated copies, people would simply go to cheaper alternatives (including Free and Open Source) that do a completely adequate job.

    Having "everybody" running MS software is to MS's advantage -- especially when they're trying to talk MA out of going with ODF.

    Where the real falacy is is declaring these theoretical sales to be money "Lost to the economy" -- when the truth is that most of the hush money people pay for software immediately leaves the country (going to the Bahamas, or Ireland or wherever it is the gives Microsoft the best discount on income tax).

    Countries like Canada don't even have the advantage of a significant income from R&D spending to offset what is actually lost to the national economy from via Microsoft Software sales.

  • by the_REAL_sam (670858) on Saturday May 27, 2006 @08:55PM (#15418298) Journal
    First things first, take back the name. It's not PIRATED software, it's duplicated, unlicensed software. Nothing was PIRATED, because NOTHING WAS STOLEN.

    The claim that the business LOST $34 billion is flawed, since, in fact, business cannot LOSE what it never HAD: the $34 billion.

    If we correct the grievance claim, and postulate that the business' suffered $34 billion of income deprivation, then that claim, too, is probably flawed. I suspect that most unlicensed, duplicated software is to the benefit of financially poor computer users, who might not otherwise have ANY access to the duplicated, unlicensed software.

    Therefore, I postulate that the only real cost to the corporate world is the tax deductible charity receipt for helping the poorest of the poor with their computers.

    If it were not for "piracy" laws, then they might be able to arrange for some kind of tax deductible charity receipt for unlicensed, duplicated software for low income computer users. But while such laws are in effect, it is unlikely that they will find low income users to be cooperative with any such effort.

  • by Fordiman (689627) <fordimanNO@SPAMgmail.com> on Saturday May 27, 2006 @09:03PM (#15418327) Homepage Journal
    I had a pirate copy of photoshop. The I noticed the Gimp was near as good. Had a pirate of MS Visual Studio - until I picked up Dev C++. Sure, the open source stuff is sometimes a bit less functional than the commercial - but me? I implement the features I want.
  • by mnmn (145599) on Saturday May 27, 2006 @09:06PM (#15418337) Homepage
    I agree with you. I'm from Pakistan and would like to meet ONE person of the 14% who buys software legally. There arent even that many branded computers out there that came with a legal Windows XP.

    However they wont BUY the software. Its way too expensive for what it is in Pakistani currency. Implement sophisticated authentication mechanisms to prevent piracy and watch Linux boom. I'd like to see that happen. Less software will be pirated, and even less will be bought.
  • by Overly Critical Guy (663429) on Saturday May 27, 2006 @09:37PM (#15418428)
    I'm desperately trying to figure out when Slashdot became pro-piracy. It's really become quite a pro-piracy haven these last few years. People think it's perfectly all right to steal software and not pay the author for it. They actually believe it's okay to download, for instance, Doom 3, and not pay John Carmack, even though he spent five years of hard work to release it. Even more hypocritically, you'll often hear that piracy isn't theft, but when a GPL violation is reported, it is referred to as "stolen code." Also, people act as though it's wrong for the RIAA or the MPAA to go after individual infringers (never mind that this is exactly what Slashdotters were calling for during the Napster lawsuit), but when there's a GPL violation, the EFF should get involved and sue the infringers. I just don't understand the disconnect. I have a feeling it really just boils down to money--people want to preserve the means to get stuff for free without having to pay for it. It has nothing to do with morality or ideals at all.

    I also don't get TechDirt's hostile opinion towards the idea that--gasp--piracy is wrong and shouldn't be happening, and that it costs people money. Of course it does. The idea that some section of the economy is magically enhanced because they got to use pirated software ignores the section of the economy hurting from lost sales. And none of it matters anyway, because you don't magically have the right to pirate software just because it would enhance your company. What a selfish and amateurish opinion to have. My company would do better if we could hack into competitors' computers and copy their valuable trade secrets for ourselves, but we don't have the right to do that just because it would enhance our business.

    Finally, I don't get why so many pro-piracy opinions exist in Slashdot comments, invariably with some mention of the "MPAA/RIAA," as though scapegoating some lobby group somehow justifies making sure some musician or filmmaker or software engineer doesn't get paid for something they worked hard on to release and make a living from. I think rooting for piracy is a weak, lazy mindset. It's the easy route to take, and illustrates that one has not thought through it at all. They likely are high school or college students who haven't had to go out into "the real world" and perform work in exchange for income. They're used to running Kazaa and eMule all day long, downloading everything they can find, and they get so used to such convenience that they get bitter and defensive when the free ride is taken away.

    But, I don't expect the amateur opinions around here to change. People will continue to scapegoat the RIAA and MPAA as a lame justification--"The RIAA made me download System of a Down's latest album!" "The MPAA made me download a camrip of X-Men 3!" Slashdot will continue to post vaguely pro-piracy articles such as this one, while ignoring its own Slashdot heroes like John Carmack (id Software was estimated to have lost millions of dollars when Doom 3 was leaked the weekend before its release date). Outside of the green and white bubble of this website, the rest of the world will continue to run on capitalism, the least bad economic system on Earth, and the antithesis to the pseudo-socialist worldview of "share everything and worry about the consequences later" that permeates the discussions.

    Just my two cents.
  • by Kjella (173770) on Saturday May 27, 2006 @10:36PM (#15418630) Homepage
    You wouldn't even need that much hard drive space. Just copy the .iso, delete the copy, then make a new copy. With a simple shell script, anyone (think economic terrorist) could bankrupt Microsoft in less than a week!!!

    To give you a clue on how rich Microsoft is:
    Let's say it's a 150MB CD. Let's also assume that we have a 3Gb/s (but 10 bytes with error correction, so 300MB/s) SATA controller and a RAID array to saturate it. At that speed, copying 150MB takes 0.5 seconds. In one week (604800s), you would be able to do 1209600 copies. Taking a generous retail price of $300 (let's at least take the suite and not just MS Word), that's 362.88 million dollars, or less than 1% of the pocket money Microsoft has, nevermind their total assets.
  • by JWSmythe (446288) * <jwsmytheNO@SPAMjwsmythe.com> on Sunday May 28, 2006 @02:04AM (#15419220) Homepage Journal
    > Has the BSA ever sued an individual/home user of pirated software?

        They threaten a lot of them.

        Look back at this story:

        http://slashdot.org/askslashdot/01/07/07/1829241.s html [slashdot.org]
        http://ask.slashdot.org/article.pl?sid=03/02/02/07 33256 [slashdot.org]

        I've known a lot of people who have a business license for whatever venture of the week they had. They never did anything with the business, and let the license expire.

        The BSA will gather the name and address of everyone with a business license (public records, I suspect), and send the nasty note out to them that they are probably in violation and are subject to investigation.

        If you've been following the BSA BS for long, you'll be familiar with the letters, and the "grace period" where business owners can install the BSA audit software, and then pay for their violations before prosecution.

        Have they sued any individuals? Not that I'm aware of. The BSA is looking for the bigger profit. They stand to make a lot more from businesses than from individuals.

        The BSA, while it sounds like it COULD be a 3-letter law enforcement agency, isn't. They'll threaten to kick your door in and audit your company. They have exactly as much right to do it as I do. If I show up at your door and say I want to audit your software, you can tell me to bugger off, exactly as I'll tell the BSA. Well, that would be assuming any BSA guys found where I live, made it past security. Then they'd find that anyone who tries to kick in my door runs the risk of getting shot on the spot.

        I'd REALLY upset any BSA guys who may show up. I have a whole stack of old hard drives and old servers. I wouldn't cooperate in the least, but they'd spend days plugging in machines to find that they're old Linux machines. More than half the hard drives in one three moving boxes are either not readable at all, or data drives from old servers. Most have been wiped, so if they try to recover anything, they'll find dirty pictures from hosted sites.

        They can be more than happy to look at my main desktop machine. Slamd64.

        Laptop? dual boot Slamd64 and Slackware.

        Since I won't let anyone touch my equipment without my undivided attention, my standard rates will apply. I hope they can afford my bill. They better not disturb my lunch/smoke/coffee breaks. There's a special charge for those.
  • by baadger (764884) on Sunday May 28, 2006 @06:24AM (#15419742)
    "In a world without copyright, the GPL would be unnecessary"

    No, the GPL uses copyright and license terms to force developers to release work under the GPL that they built upon the foundation of other GPL'd code. If you want to mimic a world without copyright, you use the BSD license, because a world without copyright doesn't translate into people sharing code.
  • by HeX314 (570571) on Sunday May 28, 2006 @06:48AM (#15419785) Homepage
    The real hypocrisy is when copyright law gets bashed into oblivion by people who fail to realize that the GPL is completely and totally unenforceable without it.

    If the price I have to pay for the free distribution of creative content is knowing that someone can spin my work and make it theirs, I would pay it with a smile on my face and shake the person's hand afterward.

    Part of creativity is not just creating something but also being able to modify anothers' work for the better.

    In all actuality, the GPL is intended to keep people from greedily stealing someone else's work and forcing copyright on the derivative (and locking up the source). If there was no copyright to begin with, everything would be free and the GPL wouldn't be shattered, it would be rendered moot.
  • Open Source (Score:3, Interesting)

    by MrSteveSD (801820) on Sunday May 28, 2006 @06:52AM (#15419788)
    On the UK BSA website it says...

    Welcome to the Business Software Alliance UK website. We are here to help businesses avoid software licensing problems.

    If that is truly their aim, they should be pressing for businesses to use Open Source software. Searching for "Open Source" on their site reveals that the term occurs only once, in one document. They could also point out the dangers of investing your companies future in proprietary solutions. e.g. I work for a company that has invested hundreds of thousands of pounds in Visual Basic (pre .NET) development and this investment has been blown away by Microsoft's decision to discontinue VB (VB.NET is not VB).
  • Reported to the SEC? (Score:4, Interesting)

    by goldfndr (97724) on Sunday May 28, 2006 @09:29AM (#15420154) Homepage Journal
    Have these losses been reported to the SEC? If they truly are losses, then the BSA members have an obligation to their shareholders to report these losses.
  • by Bing Tsher E (943915) on Sunday May 28, 2006 @09:59AM (#15420245) Journal
    That's right. Because editing bitmaps has radically changed in the last four years.

    Do you work for a software company?
  • by A beautiful mind (821714) on Sunday May 28, 2006 @01:02PM (#15420877)
    "I'd REALLY upset any BSA guys who may show up. I have a whole stack of old hard drives and old servers. I wouldn't cooperate in the least, but they'd spend days plugging in machines to find that they're old Linux machines. More than half the hard drives in one three moving boxes are either not readable at all, or data drives from old servers. Most have been wiped, so if they try to recover anything, they'll find dirty pictures from hosted sites."

    The bad thing is that they go after running and operative businesses, like the following story which is under huge discussion currently on the hungarian unix portal:

    A business had 4 computers, a win2003 server and 3 programmers' desktops. BSA and the police came with a warrant and packed them all up. Three months went by and they got back their server and desktops either completely wiped or with some BSA monitoring tool installed. They have lost a half year's work (the backups were on the server they took) and have damages in the tens of thousands of dollars equivalent of HUF. This is just a latest of their actions as dozens of such stories circulate.

    Questions arise: why was the warrant granted? They didn't find anything illegal there, so I'm guessing its entirely just because the BSA wanted one. They costed the small company a lot of money completely unnecessarily and the reason they named for doing so was because they found encrypted partitions (the ext3fs ones, which still doesn't explain why the win2003 got wiped!). Another question: Why are we not safe from these freaks even if you're using the software completely legally or not even using their software? Seems the BSA's word alone is enough for the police to jump on the case, especially as they funded some "courses" for the police on how to act.

    Mind boggles.

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