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The Pirated Software Problem in the 3rd World 252

RockDoctor writes "Dark Reading carries an article by one Nathan Spande who works in Cambodia. Locally he finds that OpenOffice.Org and MS Office are the same price ($2), or $7-20 by downloading. He discusses why the economics of OpenSource don't work in this environment, and how it contributes to global computer security issues through the "little extras" (trojans, spambots and other malware) that typically accompany such "local editions" of software. The economics of software outside the west are very different to what most people are used to."
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The Pirated Software Problem in the 3rd World

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  • Way I look at it (Score:5, Insightful)

    by goldcd ( 587052 ) on Sunday February 11, 2007 @11:43AM (#17972624) Homepage
    is that it creates a level playing field.
    Both MS office and OpenOffice are available at the same price and with the same level of support (precisely none apart from what google'll provide you with).

    I'm not quite sure why there's any kind of surprise about this information. In the western world where you have to pay for MSOffice and Open Office is free, MS Office is still winning - why you'd expect a different result in an environment MS Office is free, is beyond me.

    In my humble opinion the best thing to increase the penetration of Open Office around the planet (along with linux and every other OSS product that competes with MS) would be if MS introduced a completely secure DRM system to ensure that not a single un-licensed copy of their software was unable to function anywhere on the planet - forcing those that couldn't afford it to switch to OSS.
    Always amuses me when people here bitch about WGA, as it has the potential to be the greatest force in switching people to OSS.
  • From the information in the article, it appears that the economics of open source work much better than the economics of closed-source, proprietary software. The business model of OpenOffice.org is perfectly happy when local vendors sell their software at $2 per disk. The business model that Microsoft Office is based upon is violated when that happens.

  • by ajs318 ( 655362 ) <sd_resp2@@@earthshod...co...uk> on Sunday February 11, 2007 @11:48AM (#17972678)
    This is exactly how Microsoft kills off the competition.

    They tolerate piracy because it has benefits for them. If people are pirating MS software, they are learning how MS software works, and they aren't using competing software. They can catch up later and demand their money; by which time, they're betting, most people will already be so used to Microsoft that they will pay up rather than go for a cheaper / free alternative.

    If MS clamped down on piracy right now, then people would switch to cheaper / free products in a heartbeat.
  • by tomstdenis ( 446163 ) <tomstdenis@gma[ ]com ['il.' in gap]> on Sunday February 11, 2007 @11:51AM (#17972694) Homepage
    god and all that is holy and sacred on the planet ...

    Free Software is not, repeat NOT, about cost. It's about liberties that accompany the software. For instance, in these poorer countries they're free to choose the hardware/software combos that suit their budget and economy, and not what Redmond wants them to use.

    It also gives them access to the formats and internal workings. Meaning local jobs supporting the tools [ports, language packs, addons] are possible organically without having to first sign your soul over to msft [or whomever].

    Tom
  • by Joe The Dragon ( 967727 ) on Sunday February 11, 2007 @11:54AM (#17972712)
    WGA and other drm does not work with slow links. How can you sell apps that need to be online for checking if they are legal and licensed with forced big updates / patch downloads when you need to pay $0.10 or more a mb.
  • by Lumpy ( 12016 ) on Sunday February 11, 2007 @11:57AM (#17972738) Homepage
    In the western world where you have to pay for MSOffice and Open Office is free, MS Office is still winning - why you'd expect a different result in an environment MS Office is free, is beyond me.

    I also bet you believe we are winning the Iraq war, GW saved us from WMD's and the easter bunny is real as well.

    Here are some major facts. Microsoft products have a earth sized avalanche more marketing than Open office does. If you go and ask 100 random people chances are that less than 3% will know what open office is. Hell they even get high schools and colleges to market it for them by offering "office suite classes" that are nothing more than a 10 week marketing class they get people to pay to go to( in college).

    Do the same in businesses, survey 100 CEO's and CTO's less than 10% will know what Open office is. Business leasers also feed the marketing themselves.. Where is that powerpoint(tm) your excel(tm) or word(tm) file?

    So by your logic, people are choosing Microsoft office because it is better while in reality most people do not even know a choice even exists.
  • by ardor ( 673957 ) on Sunday February 11, 2007 @11:57AM (#17972740)
    You didn't read the article, did you.

    The poor DO NOT CARE about free-as-in-freedom. OpenOffice does not give them the chance for getting a job, MS Office does. So MS Office wins.

    You can start thinking about free-as-in-freedom once your belly is full.
  • by garcia ( 6573 ) on Sunday February 11, 2007 @12:12PM (#17972858)
    If MS clamped down on piracy right now, then people would switch to cheaper / free products in a heartbeat.

    They are here in the developed world by turning off automatic updates and further locking down their products while going after small businesses that aren't using officially licensed products.

    Yet, no matter what, people are not going to switch en mass to the free alternatives because they aren't ready for the desktop, people aren't comfortable with them, and the interoperability (while better) still isn't good enough to allow for people to "switch in a heartbeat".

    Sadly, the day will never come when we will be able to do as you claim.
  • by brouski ( 827510 ) on Sunday February 11, 2007 @12:22PM (#17972940)
    That's great for the people that get them first-hand from the group's FTP server.

    What about the schmoes who have to wait until the release has changed hands dozens of times before it hits a public site or the newsgroups?

  • by jackharrer ( 972403 ) on Sunday February 11, 2007 @12:33PM (#17973012)
    Point is that WGA was made not to disable the software. If you disable it, people will go somewhere else. Main point is to remind users they're running pirated software. Switch off features that aren't necessary, and hook them up on windows not Linux (MacOS is out of scope, if you don't have cash to buy Win do you have cash to buy Mac?).

    MS knows that piracy exists, but at the same time piracy creates a lot of well skilled users.

  • by richg74 ( 650636 ) on Sunday February 11, 2007 @12:34PM (#17973020) Homepage
    What we are seeing here, actually, is that Economics 101 works. In a free, competitive market, the theory says that the equilibrium market-clearing price of X is equal to the marginal cost of supplying X. It seems likely that the (small) marginal cost of producing an OpenOffice CD is about the same as that of producing an MS Office CD. So it's really not at all surprising that they sell for the same price.

    The "business model" of MS Office (as well as that of DRM'd music, for example) is based on attempting to engineer a way around this reality -- trying to create an economic perpetual motion machine.

  • by tomstdenis ( 446163 ) <tomstdenis@gma[ ]com ['il.' in gap]> on Sunday February 11, 2007 @12:39PM (#17973062) Homepage
    And that's the largest failing of the FSF and FLOSS as a whole.

    If the message was more about "hey you can really do what you want with this" and not "hey it's cheaper than Windows lol!" they'd be better off.

    Tom
  • by evilviper ( 135110 ) on Sunday February 11, 2007 @12:57PM (#17973220) Journal

    In fact, that might be a way to increase what advertisers pay.

    I wouldn't think so. It's just as likely no humans are watching the program to begin with.

    At ten minutes of ads per hour and 2 Mbps of the stream dedicated to the zipfile

    2Mbps is probably 2/3rds of the entire channel bitrate, leaving very crappy looking commercials (they typically need a higher bitrate than regular programming, not the other way around).

  • by goldcd ( 587052 ) on Sunday February 11, 2007 @01:17PM (#17973396) Homepage
    and quite frankly pathetic to say that the reason MSO succeeds where OO hasn't is merely down to MS's marketing budget.
    CTOs know what OO is. If an enterprise CTO deployed OO and saved their company millions, they'd get a big gold star. The reason OO isn't deployed so widely is because if it were, stuff would 'stop working' and cost the company more.
    Now you could argue (rightly) that there's nothing wrong with OO, but if you deploy it in an MS ecosystem (both your own systems and the stuff that'll come in from outside), stuff will stop working. OO's pitch is pretty much "We'll get 95% of your Office documents opened and working" - problem is that last 5% will cost more than you'll save by not coughing up for the MS license. It's not right, it's not fair, but it's a fact - and something the OO plugging CTO will be made to answer for.
    Just to come back to your point on marketing, there are many countries that MS don't even bother with now, due to the levels of piracy. Surely if OO were the better product, then it would flourish without the evil MS marketing dollar - but they just don't...
    If I pirate MSO, I know I'll have less problems than I do legitimately downloading OO. OO currently offers 95% of MSO for free - if you consider MSO to be 'free' then why on earth would you take that over something that offers 100% of MSO for free?
  • Wrong (Score:5, Insightful)

    by Maljin Jolt ( 746064 ) * on Sunday February 11, 2007 @01:20PM (#17973428) Journal
    The Pirated Software Problem in the 3rd World

    No, it is not a problem there at all. Pirated software is problem only in 1st World.
  • Revolution (Score:4, Insightful)

    by kingduct ( 144865 ) on Sunday February 11, 2007 @01:21PM (#17973442)
    Essentially, pirating commercial software is a display of resistance against the concept and economics of intellectual property. The concept of "owning" ideas or things that can be "stolen" without taking property away from the "owner" is simply not inherent to humanity (compare that to stealing a car, where the person stolen from actually loses the car).

    However, the resistance that piracy implies isn't sufficient. Free software (and other free knowledge) is a revolutionary concept that turns the base structure of the new information economy upside down. It allows everybody to share knowledge and self determine what they can and will do (as compared to accepting the limits imposed by "owned" knowledge...like accepting that powerpoint is the way a presentation should be made). This is much more important for the poor, especially in the third world, who do not have the capital to access source code and thus see how software (and the world) work.

    When using closed source software, one is essentially giving up the possibility of determining how you communicate and think in relation to machines -- and other humans. Having spent the last several years in the third world studying this specific issue (in Ecuador), it is clear that the availability of commercial software for a dollar or two is very dangerous for those countries. Any country that doesn't have a policy of supporting Free software is essentially allowing Microsoft, etc. to determine how it thinks and produces. Big software companies have no problem with this, they know that they wouldn't be selling large quantities of their software in poor countries anyway. While they may care about the big markets (China), I think most of their complaints about software piracy in the third world aren't because they care about those areas, but because they want to make sure that Americans know that piracy is an evil thing that foreigners do.

    Unfortunately, most third world governments are so pathetically corrupt/incompetent that they don't take the freedom of Free software seriously. Some recommendations would be making all government sponsored software open sourced, requiring all government documents to use open standards, making public universities use free software, etc. There are several governments working on this, but they are few and far between. It is too bad, because the third world can benefit even more from Free software than the first world can.
  • by orkysoft ( 93727 ) <orkysoft@m y r e a l b ox.com> on Sunday February 11, 2007 @01:32PM (#17973570) Journal
    They forgot to mention that most Microsoft products come with their own security problems built in!

    Of course, it is entirely possible that the pirate sellers add some extra nasty stuff to their warez, I wouldn't know, I've never bought software from pirates.
  • by Anonymous Coward on Sunday February 11, 2007 @02:04PM (#17973832)

    The great majority of the planet is no where near the US economy, or even better countries like Japan, South Korea, or Germany.

    How is a business that pays its workers $2.00 US a day for 12 hours work supposed to buy Microsoft Vista in a $2000 computer?

    A 486 with xubuntu [xubuntu.org] Linux running
    enough power to keep records and communicate with the world by dial-up modem,
    and that business might be the most wired business in town!

    Not everybody can run out and buy a $500 iPhone with a $100 month phone plan (even if they could get cell coverage in their area...)

  • Parent is wrong (Score:5, Insightful)

    by Ernesto Alvarez ( 750678 ) on Sunday February 11, 2007 @02:54PM (#17974258) Homepage Journal
    And I'm talking from experience here.
    10 years ago Buenos Aires was in the same situation as described in TFA, and the pirated software sold in stores was mostly clean. I know there was no market for zombie machines, but there were lots of (very good) viruses around. Selling infected software would hurt sales REALLY BAD. Especially since it would only take a seasoned pirate, hacker or technician to notice (and the latest antivirus was also available from most local pirates).

    Most pirated software salesmen are interested in selling software, so they won't do anything to threaten their own income. The only thing some pirate shops would do is to add some intro/advertisement (and they were treated like scum for that). Most viruses came from diskettes from unknown sources.
  • More probably... (Score:4, Insightful)

    by DrYak ( 748999 ) on Sunday February 11, 2007 @03:56PM (#17974808) Homepage
    The few times you encounter a virus-ridden pirate CD, it's surely because it was burned on a machine that was already infected and the virus managed to slip by.
    (Just exactly the same as it happened for virus infected Ipods and similar players, which were infected because the XP machine on which they were tested as part of the development process was infected and droped virus on each tested ipod)

    But that would happen nonetheless very seldom, because most of the software that is sold in this way is already downloaded in ISO form from the torrents and is directly burnt this way, and very few virus are able to injects themselves inside an ISO (althrough, a hacker could instruct remotely a trojanised PC to do so, and he would have the very obvious motivation you stated above). Very seldom are several different software unpacked, and all the SETUP.EXE from several different apps burnt together on a CD/DVD.

    Most of the pirate CD you may find on those markets are produced by people genuinely interested in the fast money then can make with the small margins they have on the media they sell you.
    (The complexity of managing and selling a botnet is beyond the interest in earning quickly 2$ for selling you a CD that costed them 0.02$ to burn)

    The "All pirated spftware contain virus" is BSA propaganda. If you spend your whole time on "astalavista.box.sk", you may end up on some exploited web-page or downloading some trojan. But most of the pirated softwares you find in torrents are clean.

    (My advice : switch to open source. You drop the whole stuff al together and get software that are both clean AND legal)
  • by Simonetta ( 207550 ) on Sunday February 11, 2007 @04:25PM (#17975094)
    While most of the comments about this original article are concerned with the possible presence of viruses and trojans in copied disks, no one seems to be asking the real question.
        Why would there be viruses and trojans in copied 3rd world CDs? The purpose of this renegade code is to collect passwords and account information and send it to a criminal organization that will use it to defraud the software user without their knowledge. But if someone is paying $2 for a copy of MS Office, then they don't have anything that these criminal organizations would consider worth stealing. It's only the big companies and wealthly (relative to the third world) individuals that actually do pay $500 for a piece of software that attracts the interest of the virus and trojan writers.
        The only people who would be interested in destroying the OS and data of the $2 CD buyers would be the BSA companies themselves. They would do this to discourage people from buying $2 copies of their $500 programs. If they could do this without affecting the actual program buyers, they wouldn't hesitate to do so.
        The unspoken problem here is not that someone is selling $2 copies of $500 programs, it is that the process of software development is so backward and difficult that it requires developers to charge $500 for a non-trival application. Software companies have to charge $500 and sell thousands of copies at that price in order to cover development costs. If software development, like hardware, fell in price/performance ratio cost by 50% every few years, then there wouldn't be this issue at all.

        The really good thing about having people in the 3rd world (don't like that term? K my A) making $2 copies of corporate $500 a seat programs is that it puts a ceiling on the number of copies of the program that can be sold at the high price. This forces (or will someday eventually) the software companies to invest in higher quality software development tools and techniques in order to get a greater productivity from their expensive developers. Otherwise we would be spending the rest of eternity developing code in such brain-dead 1970s nightmares like C++.
  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Sunday February 11, 2007 @05:58PM (#17975842)
    Comment removed based on user account deletion
  • Re:Revolution (Score:3, Insightful)

    by Chandon Seldon ( 43083 ) on Sunday February 11, 2007 @06:11PM (#17975938) Homepage

    But can you tell me, if I write software for a living -- who will pay me so that I don't starve to death if all software was free?

    Compared to the total number of professional programmers, the number who work on proprietary software for sale is pretty small. The vast majority of programmers work on custom software for internal use.

    The majority of programmers working on free software also have a day job working on non-free software for said large evil corporations (e.g. IBM) so that they can feed their families.

    Bullshit. The number of Free Software programmers who write proprietary software for sale as their dayjob is so small as to be irrelevant. What's this non-free software that IBM sells that all the free software developers are supposed to be working on? DB2? Lotus Notes? I'm sorry, they're not. A lot of the Free Software guys at IBM actually work on Linux or Apache full time - it's their job at IBM.

    Even among the programmers who *do* work on commercial proprietary software for a living, a lot of them would be *completely unaffected* if their software turned into Free Software overnight. Consider Solaris, or Java, or Netscape, or even something like Google Talk which isn't free software today.

  • by mpe ( 36238 ) on Sunday February 11, 2007 @07:59PM (#17976718)
    The "All pirated spftware contain virus" is BSA propaganda.

    IIRC there have been cases of "legitimate" software containing viruses. Thus it's possible that any pirated version originating from the same source. The ultimate irony would be if the "pirate" version had been cleaned in such a situation...
  • by 1u3hr ( 530656 ) on Sunday February 11, 2007 @09:08PM (#17977210)
    He's talking about cd's sold on Cambodian markets. I can quite imagine one of those vendors wanting to operate a spam network on the side.

    You can imagine it. I can't. I live in Hong Kong, I've bought a lot of bootleg CDs here and in Thailand. Never, ever have any been infected with viruses.

    It makes no economic sense. The vendors make a couple of dollars per disc. They'd make at best a few cents per spambot. (And spambots in Cambodia? Give me a break. They don't have the connectivity.) But once the word got round that thay were selling infected softweare, they'd lose all their sales. These are people selling from market stalls; they stick around in the same place for months usually. If they sell bad products, they lose. Customers demand refunds. I have a few times when a disc was bad; a lot less hassle from these guys than legit dealers..

    Every time you read an article quoting the BSA and such groups about software piracy they make this claim. It's just FUD. Note this writer never said he found viruses on his software, just that he was afraid of it. That's the "F" in FUD.

  • Re:Revolution (Score:3, Insightful)

    by Chandon Seldon ( 43083 ) on Sunday February 11, 2007 @10:47PM (#17978016) Homepage

    Why the hell do people keep bringing up communism?

    How is an environment where every programmer is free to bid on every software project "communism"? Really, contrary to what you might here from Microsoft or Verizon, "capitalism" isn't a word that means "everything is controlled by a government enforced monopoly".

  • Re:FUD indeed (Score:3, Insightful)

    by RockDoctor ( 15477 ) on Monday February 12, 2007 @08:02AM (#17981224) Journal

    Just to add to all the above posts refuting the claim that pirated CDs are "infected" - I live in Russia, and I've bought plenty of those here - and not a single time there was a virus, trojan, or anything of a kind on such a CD.


    Actually, the editors trimmed off the second half of my submission, about how I'd brought some very capable software in Russia, and to my surprise it worked, was virus-free, and the online registration worked too. All for a $10/ 300Rb on-the-street price. (Abbyy Lingvo [abbyy.com], a multi-linugual dictionary/ thesaurus/ pronunciation guide, if you and have a need for it. Worth recommending.) Why they chose to trim that half of the submission, I don't know (and don't particularly care), but the fact that the street price is so low must be quite scarey for Western software companies trying to increase their sales in non-Western countries. For comparison, the online price for Lingvo from the UK is "99 Euro/79,99 GBP", or about 150 USD. And obviously it's good for the "grey market". Need I add "DVD region coding" as another example of how scared content-control businesses are of non-domestic markets?

    I don't have time to go through the commentary further, but I see that other commentators have been misunderstanding my point that 'the street price is (say) $2, but the download price $7-10.' That download price is calculated from the $0.10 price cited per megabyte, and is based on a vague memory of ~80MB for OpenOffice.Org. It seems that there are a lot of people on Slashdot whose appreciation of modern connectivity could seriously benefit from spending a month using dial-up on a phone service which charges £0.04 ($0.08) per minute regardless of whether you're downloading, uploading, or thinking.
    Actually, I could see the courts using that as a punishment for cyber-first-offenders - you can choose between having enough money to eat, or to update your MyArmpit profile. Much more painful than simply siezing a convict's computer. But limp countries with injunctions against "cruel and unusual punishment" would probably object. Surely the point of punishment is to be cruel, and since every person is unique, then surely every appropriate punishment would be unusual. Raises the fun question of whether you want an "appropriate" punishment or an inappropriate punishment?
    I saw a cartoon recently ... Mark Stanley's 'FreeFall [purrsia.com]' IIRC, that pointed out that "All humans are unique, like snowflakes with a 250 centrigrade combustion temperature."

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