Global software piracy hit US$51bn last year

11 May 2010

The rate of software piracy climbed to 43pc in 2009, up 2pc on the previous year, according to the Business Software Alliance. The culprit: expanding PC sales in emerging markets.

“Software theft exceeded US$51bn in commercial value in 2009. The public and private sectors need to join forces to more effectively combat an epidemic that stifles innovation and impairs economies on a global scale,” said BSA president and CEO Robert Holleyman.

According to the seventh annual Business Software Alliance/IDC Global Software Piracy Study, a 43pc piracy rate means that for every US$100 worth of legitimate software sold in 2009, an additional US$75 worth of unlicensed software also made its way into the market.

The scale of software piracy is so great that Microsoft CEO Steve Ballmer angrily railed that counterfeit software was Microsoft’s biggest competitor.

Sophisticated pirates

This underscores the increasing sophistication of pirates and the urgent need for stronger anti-piracy efforts, the BSA said.

“Software theft hurts not just software companies and the IT sector, but also the broader economy at the local, regional and global levels by cutting out service and distribution firms,” said John Gantz, chief research officer at IDC.

“Lowering software piracy by just 10pc during the next four years would create nearly 500,000 new jobs and pump US$140bn into ailing economies.”

In the US, software piracy remained at 20pc, the lowest level of software theft of any nation in the world. However, given the size of the PC market, the commercial value of pirated software in the United States was US$8.4bn in 2009.

IDC, a leading global market research and forecasting firm, analysed 182 discrete sets of data from 111 countries around the world to develop the BSA/IDC Global Software Piracy Study.

Reasons for piracy rate increase

The factors driving up the global piracy rate include growth in the consumer PC base and in emerging markets – both segments with high piracy rates.

Globally, PC shipments to consumers rose 17pc in 2009, while shipments to businesses, governments and schools dropped 15pc.

The PC markets in Brazil, India and China accounted for 86pc of the growth in PC shipments worldwide.

For every dollar of legitimate software sold, another US$3-4 in revenue is created for local firms.

China saw the largest increase in the commercial value of pirated software of any country, growing US$900m to US$7.6bn.

India, Chile and Canada each saw the greatest improvement in reducing software theft, each achieving a 3pc decline in their piracy rates in 2009.

“Given the economy, 2009 piracy rates are better than we expected. But incremental improvements are not enough.

“Few, if any industries, could withstand the theft of US$51bn worth of their products. To foster innovation and maximise the economic impact of the IT industry, governments must act, particularly those in fast-growing, high-piracy countries,” said Holleyman.

By John Kennedy

Photo: Microsoft CEO Steve Ballmer

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years