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Software Piracy Leaps to Record $59 Billion in 2010

The software industry is being robbed blind. That is the main conclusion I draw from the newly released 2010 BSA Global Software Piracy Study, which is available with a rich, interactive presentation of the latest data at www.bsa.org/globalstudy.

Theft of software for personal computers leapt 14 percent around the world last year to a new record of $59 billion — an amount that has nearly doubled in real terms since 2003. It’s truly stunning to think about: For every dollar of legal PC software sales, another 62 cents worth of products are being stolen.

Emerging economies like China, Indonesia, and Russia are the driving forces behind the trend, as the chart on the right shows, because those high-piracy markets are also the places where PC shipments are growing the fastest. In fact, last year was a landmark year in that regard: For the first time, the number of PCs shipped to emerging economies accounted for more than half of the world total. Yet paid software licenses in emerging economies accounted for less than 20 percent of global sales.

The irony is that people everywhere value intellectual property rights, according to surveys of approximately 15,000 PC users in 32 countries, which were conducted by Ipsos Public Affairs as part of this year’s Global Software Piracy Study. As I noted here last week, 71 percent of the world’s PC users think innovators should be paid for the products and technologies they develop, because it provides incentives for more technology advances. Strong majorities also see clear economic benefits from IP rights and protections: For example, 59 percent think IP rights benefit local economies, and 61 percent think they create jobs.

On top of that widespread support for IP rights, eight out of 10 PC users around the world say legal software is better than pirated because it is more reliable and secure. But a striking finding is that too many people do not understand they are getting their software illegally.

The most common form of software piracy, our surveys found, is buying a single license for a program and then installing it on multiple computers. In an enterprise setting, that can quickly turn into hundreds or even thousands of illegal copies. Yet a stunning 51 percent of business decision-makers in emerging economies incorrectly believe the practice is legal in offices.

The global piracy rate for PC software dropped by a single point in 2010 to 42 percent. That remains the second-highest global piracy rate we have seen since partnering with the leading market-research firm IDC in 2003 to conduct these annual studies of software piracy.

Regional piracy rates rose by 1 percentage point in Asia-Pacific and Latin America in 2010, even though many countries in both of those parts of the world managed to cut their national piracy rates by a percentage point or two. That is happening because of the growing influence of big, rapidly growing countries with higher-than-average piracy rates.

A short video featuring John Gantz of IDC and Trent Ross of Ipsos delves into all these trends. It is well worth watching.

It is important to remember that software piracy is an urgent problem not just for the software industry but for the whole economy, because software is an essential tool of production. Businesses of all sorts rely on software to run their operations, so properly licensed companies are being unfairly undercut when their competitors avoid overhead costs by stealing software tools. That depresses legitimate product sales and imperils job creation.

The software industry is doing all it can to promote legal software use through public-education campaigns, software asset management programs for IT professionals, and other means. Now we need governments around the world to bring greater focus to the issue of software theft by stepping up their support for public education, enacting and vigorously enforcing strong IP laws, and leading by example.

There is more on BSA’s Blueprint for Reducing Software Piracy in the back of the white paper that accompanies this year’s study. You will find that, too, at www.bsa.org/globalstudy.

Robert Holleyman

Author:

As President and CEO of BSA | The Software Alliance from 1990 until April 2013, Robert Holleyman long served as the chief advocate for the global software industry. Before leaving BSA to start his own venture, Cloud4Growth, Holleyman led the most successful anti-piracy program in the history of any industry, driving down software piracy rates in markets around the world.

Named one of the 50 most influential people in the intellectual property world, he was instrumental in putting into place the global policy framework that today protects software under copyright law. A widely respected champion for open markets, Holleyman also was appointed by President Barack Obama to serve on the President’s Advisory Committee for Trade Policy and Negotiations, the principal advisory committee for the US government on trade matters.

Holleyman was a leader in industry efforts to establish the legal framework necessary for cloud-computing technologies to flourish. He was an early proponent for policies that promote deployment of security technologies to build public trust and confidence in cyberspace. And he created a highly regarded series of forums for industry executives and policymakers to exchange points of view and forge agreements on the best ways to spur technology advances and promote economic growth.

Before heading BSA, Holleyman was a counselor and legislative adviser in the United States Senate, an attorney in private practice, and a judicial clerk in US District Court. He holds a bachelor’s degree from Trinity University in San Antonio, Texas, a J.D. from Louisiana State University, and has completed the Stanford Executive Program at the Stanford Graduate School of Business.

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