By Eileen Yu
Thursday, May 19 2005 05:46 PM
URL: http://www.zdnetasia.com/news/software/0,39044164,39230772,00.htm

SINGAPORE--Software piracy rates may have come down, but revenue losses continue to climb, according to a recent study released by the Business Software Alliance.

Piracy continues to be a major challenge for the global software market, said Jeffrey J. Hardee, Asia-Pacific vice president and regional director, Business Software Alliance (BSA), an international non-profit body dedicated to promoting a "legal digital world".

Hardee said findings from the newly-released study conducted by research firm IDC, showed that the worldwide piracy rate fell 1 percent from 2003 to 35 percent in 2004. But the global software market suffered close to US$33 billion in losses due to piracy last year, up from about US$29 billion in 2003.

The same trend was also spotted in Asia-Pacific, including Japan, according to the study's findings.

The piracy rate for the region remained unchanged at 53 percent last year, compared to 2003. However, revenue losses as a result of piracy climbed 4.6 percent to US$7.9 billion, up from US$7.6 billion the year before.

The apparent discrepancy is due to fluctuations in currency exchange rates, and a significant growth in IT adoption in large developing markets such as Indonesia and Thailand, noted Martin Kralik, associate director of consulting, IDC Asia-Pacific.

In Singapore, for example, where the IT market is fairly mature, a stronger US dollar had pushed up software prices in 2004, he explained. So while the island-state saw its piracy rate dip by 1 percent last year from 43 percent in 2003, revenue losses from software piracy grew to US$96 million from US$90 million in 2003.

The survey also showed that software piracy rates increased in 34 countries across the globe last year. Twenty-four nations registered piracy rates of 75 percent and above--several of which were in Asia including Vietnam (92 percent), China (90 percent), Indonesia (87 percent) and Thailand (79 percent).

Web-assisted piracy
According to Hardee, piracy in the corporate environment is "the most damaging" to the software industry and remains a key concern for BSA.

He noted that the Internet has contributed to software piracy, as it has become a popular platform for unauthorized downloading and sharing of software.

There are more than 279 million Internet users today in Asia-Pacific, he said, an increase of 44 million from last year. China alone will have 100 million new Internet users over the next four years, Hardee added.

"Online piracy poses a major threat to countries via 'warez' groups, spam, auction sites (that offer pirated software) and peer-to-peer (P2P) systems," he said.

He stressed that BSA members have no issues with and are supportive of P2P technology, so long as it is not used to support the illegal sharing of software.

With a market worth US$25 billion in 2003, the software industry is Asia-Pacific's fastest growing component of the IT industry, Hardee said. Asia's IT industry is also forecast to grow 54 percent between 2002 and 2006, he added. A 10-point reduction in piracy could double this figure to 93 percent, he noted to underscore the importance of eradicating software piracy.

Reiterating a previous BSA statement, Hardee disagreed that lowering software prices would address the problem.

Software is a competitive business, he said, adding that there are "thousands" of vendors producing "thousands" of programs packed with varying functions and features.

Companies should look at what is available and pick those they can afford, he said. He added that software vendors have introduced various licensing schemes, offering discounts for educational purposes or bulk purchases, for instance.

Hardee also noted that there is no clear correlation between software prices and the level of piracy. Some of the more commonly pirated software, he said, are security tools that are affordably priced, while high-end enterprise software that cost considerably more are not as popular in the piracy circuit.

BSA, which members include Microsoft, Adobe and Symantec, has been running road shows and seminars to educate businesses in Asia-Pacific on software piracy, he said. New legislations and enforcements by governments across the region have also helped curb the growth of piracy, he added.

In February this year, the group's Singapore office also launched a new toll-free hotline, and began offering a maximum reward of S$20,000 (US$12,064) for information on copyright infringement by local companies.

This announcement has resulted in an increase in new "leads" which are currently being assessed by BSA, said Hardee. However, no reward has been awarded yet, he added.