The Hindu Business Line : Global software piracy losses at over $40 b in 2006: Study

Coimbatore May 27 IT market research firm International Data Corporation's (IDC) fourth annual global PC software piracy study has estimated the global software piracy loss in 2006 at over $40 billion with the European Union and Canada accounting for high losses despite low piracy rates.

The survey has estimated the EU losses at $11 billion, with a 36 per cent piracy rate and Canadian losses at $784 million with a 34 per cent piracy rate.

Progress though was seen in a number of emerging markets, most notably in China and Russia, where the piracy rates had over the last three years dropped 10 percentage points and 7 percentage points, respectively.

Releasing the study, the Business Software Alliance (BSA) President and CEO, Mr Robert Holleyman, observed that while there was progress, "There is still a lot of work to be done to reduce unacceptable levels of piracy. These significant losses translate into negative impacts on IT industry employment, revenues and financial resources available for future innovation and the development of new technologies."The survey noted that for every $2 of software purchased legitimately, $1 was obtained illegally, worldwide. Global losses increased by more than $5 billion (15 per cent) in 2006 compared with the earlier year.

Of the 102 countries covered in the 2006 study, piracy rates dropped moderately in 62 countries, while increasing in 13.

China's piracy rate fell by 4 per cent for the second year in a row. It has dropped 10 per cent in the last three years from 92 per cent in 2003 to 82 per cent in 2006, saving about $864 million, according to IDC. The legitimate software market in China, on the other hand, grew to nearly $1.2 billion in 2006, 88 per cent up over 2005. "Considering the PC penetration in the Chinese IT market, this continued decline in China's software piracy rate is quite promising," Mr Holleyman said.

Of the 15 individual markets examined in the Asia-Pacific region, piracy rate dropped in 11, but remained the same in four. However, the region's average piracy rate increased by one point to 55 per cent. "This seems counter intuitive, but China's and India's share of the PC market in the Asia-Pacific region grew from 42 per cent in 2005 to 46 per cent in 2006 and this has the mathematical effect of dragging the regional average upward toward the China and India average, even though the piracy rates in both countries dipped in 2006," said Mr Jeffrey Hardee, Vice-President and Regional Director for Asia, BSA.

He further noted that the governments in this region were strengthening IP policies, educating consumers and businesses on the benefits of using legal software and initiating enforcement actions against the use of illegal and unlicensed software. "Despite these efforts, the loss from piracy in the region increased by 44 per cent to $11.6 billion in 2006."