One-Third of All Software is Pirated, Study Says
Of $80 billion in software installed on computers worldwide in 2003, only $51 billion was legally purchased
WASHINGTON, DC - 07/09/04 - More than one-third of all the software installed on computers worldwide was pirated in 2003, representing a loss of nearly $29 billion, according to a report on global software piracy just released by the Business Software Alliance (BSA).
Complied by the global technology research firm International Data Corporation (IDC), this year's BSA global piracy study incorporated major software market segments including operating systems, consumer software, and local market software.
In previous years, the study was limited to business software applications with the inclusion of the new categories "painting a broader, more accurate picture of the global software piracy problem," the software industry organization said.?
The study found that while $80 billion in software was installed on computers worldwide last year, only $51 billion was legally purchased.
"Software piracy continues to be a major challenge for economies worldwide," said Robert Holleyman, president and CEO of the Washington, DC-based software trade organization, adding the report's scope was expanded "to account more accurately for trends such as the growth of local software markets worldwide and the acceleration of Internet piracy."
Geographically, the report found the piracy rate in the Asia/Pacific region was 53%, with dollar losses totaling more than $7.5 billion; in Eastern Europe, the piracy rate was 71%, with dollar losses at more than $2.1 billion; and in Western Europe, the rate was 36%, and dollar losses totaled $9.6 billion.
The average rate across Latin American countries was 63%, with losses totaling nearly $1.3 billion; in the Middle Eastern and African countries, the rate was 56% on average, with losses totaling more than $1 billion; and in North America, the piracy rate was 23% with losses of more than $7.2 billion.
The study found that the size of a regional software market is the critical link between piracy rates and actual dollars lost.
For instance, 91% of software installed in the Ukraine in 2003 was pirated, as compared to 30% in the UK.
But dollar losses in the UK - some $1.6 billion - were about 17 times higher than those in the Ukraine ($92.1 million). The difference is attributed to a much larger total PC software market in the UK than in the Ukraine.
"A number of factors contribute to the regional differences in piracy, including local-market size, the availability of pirated software, the strength of copyright laws, and cultural differences regarding intellectual property rights," said John Gantz, Chief Research Officer at IDC.
"Unfortunately, we found that high market growth regions also tend to be high piracy regions, such as China, India and Russia. If the piracy rate in emerging markets - where people are rapidly integrating computers into their lives and businesses - does not drop," he said, "the worldwide piracy rate will continue to increase."
IDC compiled data worldwide on software and hardware shipments, conducted more than 5,600 interviews in 15 countries, assigned in-country analysts around the globe to evaluate local software market conditions, and identified piracy rates and dollar losses by utilizing proprietary IDC models for PC, software and license shipments by all industry vendors in 86 countries.
For more information on the Global Software Piracy Study, visit the Business Software Alliance website at www.bsa.org/globalstudy/.
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