Business Software Alliance

Pirated Software in China, Are We Really Making Any Progress? You Wish

Right now, China has an ever growing middle class, and by its own estimates it believes there are over 400 million people in that middle class, that is by Chinese standards defined as making over $1300 per year. Indeed, with that strong middle class, there would be plenty of buyers for American products, including software. However American companies that create this software sell very little of it in this country. Why is that I ask?

The answer is simple actually, it’s because of pirated software, and the fact that most of the software created in the United States is merely being borrowed, stolen, and the code plagiarized which is violating patents and copyright law. China has promised to look into this, and help us solve the problem so we can be on a level playing field. Most of those promises are certainly lip service, and not a whole lot has been done, in fact it’s getting worse.

There was an interesting piece in the China’s Wall Street Journal on December 14, 2011 titled; Chinese Government Can’t Kick the Pirated Software Habit” by Owen Fletcher. The article went on to state;

“The Business Software Alliance, an industry advocacy group whose members include tech giants like Apple and Microsoft, estimated that 78% of the PC software installed in China last year was pirated, a small drop from 82% in 2006. U.S. Ambassador to China Gary Locke last month said legitimate sales of software in Vietnam exceed such sales in China – a nation, he noted, with “over 15 times the population of Vietnam.”

Okay so, you can imagine why someone like me who is very pro-American has a challenge with all this, especially as we negotiate with China for free and fair trade, and as, the future president of China visits the US and Obama Administration. Even if China agrees to buy Boeing 787s, it seems their promises of cracking down on pirated products which violate copyrights or patents are shallow, which is quite unacceptable.

Can you imagine how much money our companies are losing, and how much more money they could’ve made in China if all that software, and all that computer code wasn’t being stolen? Imagine how many more jobs there might be, or how much our trade deficit might improve with that nation if this current situation were not the case. There’s a very good book I think you should read by Ted C Fishman titled; “China*Inc -How the Rise of the Next Superpower Challenges America and the World,” 2005, 342 pages, ISBN: 0-7432-5752-9.

You see, everyone is talking about it, but nothing is being done. Meanwhile, China has painted itself into an economic corner because it has not been willing to trade with the United States using a Western win-win style of negotiation. Until that happens, and until the Chinese understand the values of free-market capitalism, they cannot move forward, and continuing the charade will not do us any good either. Please consider all this and think on it.

Software Piracy – Global Increase

Pirated software is on the increase and now accounts for over one third of the software installed on the world’s computers and it’s cost the software industry a staggering, $28bn (£12bn) last year in lost revenues. That’s the startling claim of the UK based, Business Software Alliance. Their annual survey of global software piracy shows that some 36% of software applications were illegally installed and being used during 2003.

The study, conducted for the first time on behalf of the BSA by global technology research firm, International Data Corporation, incorporated major software market segments, including operating systems and consumer software and local market software. They discovered that while software costing $81bn (£38bn) was installed onto computers around the world, only $51bn (£23bn) was actually purchased and installed legally.

The USA and Canada who collectively are the most honest when it comes to purchasing software show a software piracy rate of 23% whilst the worst offenders are within the Eastern European countries, where piracy levels are an incredible 71%. It’s difficult to draw any comparisons from previous years data as this is the first year the study has been out-sourced to an independent company and takes in a wider spectrum of software than the previous studies conducted in-house by the BSA. As well as counting the number of illegally produced software programs installed on systems, the study also includes software for where an insufficient number of site licenses have been purchased.

“Software piracy continues to be a major challenge for economies worldwide,” said Robert Holleyman, president and CEO of BSA. “From Algeria to New Zealand, Canada to China, piracy deprives local governments of tax revenue, costs jobs throughout the technology supply chain and cripples the local, in-country software industry.”

Mr Holleyman went on to say, that the IDC study reflects a logical evolution in BSA’s decade-long effort to measure piracy in the global economy. Its scope was expanded to account more accurately for trends such as the growth of local software markets worldwide and the acceleration of Internet piracy.

For its analysis, IDC drew upon its worldwide data for software and hardware shipments, conducted more than 5,600 interviews in 15 countries, and used its in-country analysts around the globe to evaluate local market conditions. IDC identified the piracy rate and dollar losses by utilizing proprietary IDC models for PC, software and license shipments by all industry vendors in 86 countries.

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 percent of software installed in the Ukraine in 2003 was pirated, as compared to 30 percent in the U.K. But dollar losses in the U.K. ($1.6 bn) were about 17 times higher than those in the Ukraine ($92.1m). This difference is attributed to a much larger total PC software market in the U.K. 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, the worldwide piracy rate will continue to increase.”

“The fight for strong intellectual property protection and respect for copyrighted works spans the globe, and there is much work to be done,” Mr Holleyman said. “BSA will continue to work with governments to enact policies to protect software intellectual property as well as implement programs to raise business and consumer awareness about the importance of copyright protection for creative works. Lowering the piracy rate will stimulate local economic activity, generate government revenue, create job growth and cultivate future innovation.”

Countries with Highest Piracy Rate:

  • Vietnam 92%
  • China 92%
  • Ukraine 91%
  • Indonesia 88%
  • Zimbabwe 87%
  • Russia 87%
  • Algeria 84%
  • Nigeria 84%
  • Pakistan 83%
  • Paraguay 83%

Countries with Lowest Piracy Rate

  • United States 22%
  • New Zealand 23%
  • Denmark 26%
  • Sweden 27%
  • Austria 27%
  • United Kingdom 29%
  • Japan 29%
  • Belgium 29%
  • Germany 30%
  • Switzerland 31%

Microsoft OEM Software, A Usual Victim of Scams

Software trade group Business Software Alliance or BSA has revealed findings of its own study that found that for every 10 software products sold via the Internet, about four are pirated copies of original OEM software The most usual victim of such piracy is of course, the most popular software in the world, the Microsoft OEM software.

To understand the real issue behind this, it would be appropriate if you would be refreshed about OEM. The word stands for ‘original equipment manufacturer’. OEM is a re-branded component of a computer unit. You know for a fact that not all parts of a computer unit is designed and built by a single manufacturer. There are specific parts, like chips, memory, and drives that are made by third party firms.

For example, you are buying a computer unit made of maker A. because Microsoft is the most used and functional software you will definitely opt to buy the computer if it already contains Microsoft software That software is known as Microsoft OEM software In other words, Microsoft OEM software is a computer program that is installed in a computer unit upon purchase by consumers.

Online scams

That is the main thrust for piracy concerns. Because computer manufacturers are always aiming to minimize their costs and maximize popularity and demand from consumers, they always aim to offer the best packages and deals to the market. What else can be better than selling computer units already installed with Microsoft OEM software?

As computer manufacturers find Microsoft OEM software online and elsewhere, they most likely encounter scam and fake copies of the software Investigations have it that PC makers are not always to be blamed for their patronage of pirated Microsoft OEM software Most of the time, several Microsoft OEM software packages available in the market look like original products, only to be found out eventually that they are not.

In fact, investigators are also most of the time deceived. They can attest that they, too, can be fooled by pirated Microsoft OEM software being distributed in the market. Perhaps, there must be more stringent and more particular rules and regulations that should be installed and established to regulate the rise of fake Microsoft OEM software.

Fake Microsoft OEM software in emails

The most common form of dissemination and circulation of pirated copies of Microsoft OEM software are through emails. For sure, you are familiar with spam emails. Such mails are proliferating in the emails of people around the world. Usually, headings and titles indicate cheap and marked down costs of particular Microsoft OEM software.

BSA asserts that as always, consumers are thrilled and deceived by cheaper and more affordable versions of products. In the case of software consumers are more than anxious to secure cheaper installations of Microsoft OEM software to be particular.

And why not?

Pirated Microsoft OEM software are very cheap. At the same time, they are coming in full and unlimited versions, making them more in-demand and highly attractive to buyers. If you would try buying the legitimate copies, you would notice that they are more expensive. Another setback is that despite the high tag prices, software copies are limited and are not in full versions.

Thus, when there is Microsoft OEM software that is in full and unlimited versions at lower prices, consumers would naturally come across to patronize the products. As for counterfeits against hoaxes and pirated versions, it is always hard to tell if a product is pirated or not. Most of the time, pirated Microsoft OEM software looks exactly the same as the original copies. The features are almost always the same and the overall packaging and functions bear no difference than the original versions.

Software Licensing and Copyright Protection

Every year there are billions of dollars loses due to pirate software, and the figure is increasing double digits each year. So, if you are a software developer, how would you prevent your software from being stolen?

Software is your high valuable intellectual property. So, it must be protected from illegal usage to ensure new and existing revenue. Software piracy rate is increasing globally and billions of losses occurred because of software piracy. Here are some facts and rates of each region, Asia pacific have a piracy rate of 55%, even Central Europe and Latin America suffers a piracy rate of 60%. According to the BSA (Business Software Alliance) and IDC 4th Annual Global Software Piracy Study, revenue losses due to software piracy have increased and were $40 billion in the year 2006.

Developing a software application involves a major investment of time, money and effort. Software piracy (including illegal network licenses and unfulfilled upgrades) denies you the revenue you deserve and harms your paying customers, who ultimately bear the cost of illegal use of your products. Piracy limits your ability to be competitive, leading to higher-priced, less advanced products for your customers.

Software Copy Protection will help us to prevent our software products that we spent months to years to develop, being cracked and distributed free. It will not only protect our intellectual property rights but also will help us to increase our sales revenue and improve services and more advanced features or better applications for your users and clients. This will indirectly increase your revenue and making you a great leader in software application development.

So start protecting and securing your software now.

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