Piracy plateau paves the way

Despite efforts from anti piracy bodies, piracy is still estimated to be running at 27 per cent in the UK channel ­ a figure that has not changed in three years.
Anti-piracy group the Business Software Alliance (BSA) recently released the results of its annual Global Software Piracy study, conducted by analyst IDC. The survey revealed how a 10 percentage point decrease on piracy levels could have strong implications on the UK economy, creating more jobs and more tax revenues (CRN, 28 January).
Julie Strawson, chair of the BSA UK Committee, told CRN: “The current rate of software piracy is still depriving the country of valuable revenue streams and is negatively affecting companies’ profits, their intellectual property and brand.
“While the BSA proposes greater damages for those that infringe the law, it also recognises that stamping out software piracy is a difficult task. It takes time to educate businesses that paying for a piece of software far outweighs the negative consequences of downloading that technology for free; especially when one considers how vulnerable these businesses are to cyber attacks as a result of using unlicensed software.”
Strawson explained how IDC has predicted that the UK could feasibly reduce piracy by 5.2 per cent between now and 2011. She felt that if this is a realistic target there is no excuse to still have a piracy rate of 27 per cent in 2011, which if reduced could create up to 7,200 new jobs in the industry ­ see graph, 22.
To help increase public awareness of copyright laws, encourage legal use of legitimate software and explain the consequences of software piracy, the BSA develops information and tools for software users.
The BSA has just seen its first regional campaign come to fruition. A total of 41 firms in Glasgow are under investigation following a campaign that involved the BSA offering Glasgow-based businesses a 30-day legalisation period during November to ensure their software was fully licensed. During this time the BSA agreed not to take any legal action against firms that registered their participation in the programme.
The month-long campaign proved a major success, with several hundred businesses acknowledging the BSA’s warnings and taking steps to ensure that they are respecting copyright law.
The 41 businesses, ranging across many sectors, reported for alleged piracy will be scrutinised and face potential legal action. The BSA’s legal team will be looking into each case and if piracy is suspected, the firms will have to provide evidence that they are operating legally. If they are not, further moves will be taken.
“One way of getting our message across is enforcement, but this is a last resort; the BSA would rather work with resellers and customers to understand the risk of selling and using unauthorised software than resort to court action,” said Strawson.
“For resellers it is also worth bearing in mind that even VARs with the best intentions can be duped into buying counterfeit goods. However, this mistake could damage their reputation because they are showing themselves to be incapable of guiding customers along the best route.”
John Lovelock, chief executive of the Federation Against Software Theft (The Federation), said: “Piracy affects everyone in the channel, just look at the BSA’s report on how the economy could benefit from driving it down. Why do you think The Federation is always discussing it?”
Lovelock said that 27 per cent sounded about right if you take into account that “in 1994 piracy rates were about 46 per cent”.
“The figure has not moved for a while, but it has hit a plateau,” he added.
Lovelock explained that a separate company called FAST Ltd runs a standard software compliance programme that teaches businesses how to be compliant.
“Because it is near impossible to prove that an organisation is deliberately misusing its software, there is not enough risk surrounding the subject. At present, a business will be informed by The Federation that it is misusing software and is at risk of piracy theft, however, if the problem is corrected it is a civil offence and the company is made to buy the licences it is missing,” said Lovelock.
On the other hand, if the business ignores The Federation’s warning, it can be a criminal offence and only then could the company’s directors go to prison if found guilty of software theft.
He added: “In the first instance of a company hearing from The Federation, the directors will not go to prison because the company can claim it had no knowledge of the issue, but it is still at risk of being sued. On the second instance the business cannot deny knowledge of its under licensing and the business and its directors will face criminal charges.”
Michala Wardell, head of anti-piracy for Microsoft, agreed with Lovelock that the BSA’s piracy figure sounded about right.
“It is a massive achievement because piracy is increasingly available. Despite these challenges, piracy has stayed at 27 per cent,” said Wardell.
Matt Fisher, vice president for marketing of vendor Centennial Software, questioned the BSA’s figure, because he claimed Centennial had seen an upward surge of software asset management (SAM) technologies. “We would say there has been a decrease in piracy,” Fisher said.
“Everyone needs to do their bit, whether the piracy is accidental or deliberate. If the end user is poorly managing its licences it is not usually deliberate and therefore the channel has a role in showing its
customers how to stay compliant.”
Fisher said that Centennial educates its customer with SAM Essentials, a document that outlines best practices and how to understand SAM programmes.
“The industry watchdogs also need to do their bit with end-user education. End users are not aware of the legal risks if they are under licensed and even if they are, IT managers may find it hard to understand so it is pushed aside,” said Fisher.
He added that the BSA’s report revealing how the UK economy is missing out on £1bn in taxes shows how the channel is also missing out on potential revenue. Fisher added deliberate piracy is damaging to the channel because it destroys customers’ confidence in its suppliers.
A representative for the Alliance Against Intellectual Property Theft said that regular checks should be performed to seek out illegal or unlicensed software running on companies’ networks.
“This is essential, not just to ensure IP compliance but it makes good sense if firms want to protect the integrity of their IT systems. These steps are not onerous and the benefits to businesses can be huge,” said the representative.
“The biggest risk to firms comes from the fact that companies found to be using unlicensed software are liable for prosecution. Also, whether they have sanctioned the theft or not, directors can face fines of up to £5,000 and up to 10 years in prison if found guilty of copyright theft.”
Robbie Richmond, managing director of VAR EasySAM, said: “When an end user thinks of SAM they only think of Microsoft, but they might be using many different vendors within their business. EasySAM tries to make sure that licensing applies to all vendors.”
“Businesses should get financial benefits for staying compliant and this might encourage more to adopt SAM, driving resellers’ revenues up and the piracy rates down.”
Richmond said that end users may see licensing resellers as transparent and only pushing SAM adoption as a way to increase revenues, not to decrease piracy.
“End users do not see the reseller as a best friend trying to help, but as trying to increase its revenues,” he said. “Anti-piracy bodies such as the BSA and The Federation could do more to educate the end user about how to tell if they are incompliant and the benefits it can have for their company. It would also benefit to know if the company is over licensed and paying too much money.”
Stewart Hayward, commercial director of online VAR WStore, said: “I did not think they had gone up either, but if the numbers have not changed, is the channel doing a good job or not?”
Hayward felt that a lack of education was not the problem as end users are well aware of the risks. “The messages that are being sent out to deliberate pirates need to change. The pirates three years ago are the same pirates now,” he said.
“There should be a formal body to combat piracy. Firms such as the BSA and The Federation do their best to help if you contact them, but there needs to be more effort. Vendors can help with this effort and take more of an interest.”
Strawson concluded: “Ignorance is not bliss. It is important to question how a manufacturer is able to offer such competitive prices on a batch of high-quality software. If people do not know the company, they should do some research ­ it is enough to save a business.”
BSA urges VARs to shop pirates