The Really Scary Piracy Story

by Ivor Soans    Aug 20, 2004

Every couple of months some outfit conducts a survey on software piracy rates and out tumbles some scary figures. So, chances are you read about the recent BSA-IDC global software piracy study, which revealed that 53 percent of the software installed on computers in the Asia Pacific region was pirated in 2003, representing a loss of over US$7.5 billion.

Many Indian users would have gone “Wow!” when they read the figure, but then they’d click on the next story, using their PC powered by pirated software. Now, while I’m not for piracy on the home user front, I believe there are issues out there that are very complex. But in this piece, I refer to the business user. While many large Indian enterprises do have policies that discourage any form of software piracy, many encourage piracy, and some don’t bother to implement well-meaning policies.

While the dangers of using pirated software are well documented (security, data protection issues, etc), let’s look beyond them.

In fact, when an India company uses pirated software, it not only leaves itself open to attack, it is also harming the Indian economy. And thanks to the cyclical relationship between the state of the economy and business prosperity, the company could be harming itself in the medium- to long-term.

Allow me to explain. One, pirated software means lower revenues for governments, which means lower government spending on development. Whatever your personal opinion about the government and whether it deserves to be paid taxes, the fact remains that lower government revenues means reduced development and therefore, lesser prosperity. That also means lower economic activity, which means a bad environment for business. That ‘business’ includes the corporate that looks the other way when it comes to software piracy.

Besides this, piracy also means that local software makers can’t survive and in the long run this will impact India’s competitiveness in the global IT market. In a scenario where we have no option but to move up the value chain into products, where IT accounts for a growing part of Indian GDP and where we just can’t afford a slowdown, this could be very bad news.

And then of course, there’s job growth—piracy kills a huge chunk of job growth. In a country where the population growth rate is still dangerously high and where generation of employment opportunities is vital to prevent social upheaval, anything that could hurt this balance is best avoided.

The scorecard seems pretty clear. If you’re a business and you’re using pirated software, you might save a few bucks today, but you might end up endangering your business and worse, even your country, and by extension, yourself. Is that a price worth paying?

Tags: piracy IDC