Pirates stunting software growth

If antipiracy efforts gained steam in countries like China and Russia, software makers could more easily grow, study finds.

The story "Pirates stunting software growth" published December 8, 2005 at 5:37 AM is no longer available on CNET News.

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[SqlserverCode]

I doubt....

I doubt that the majority of the people who get a cracked version of Photoshop for example would go out and spend $500 on a legitimate version. They just don?t have that money (for that purpose)<br /><br /><a class="jive-link-external" href="http://otherthingsnow.blogspot.com/" target="_newWindow">http://otherthingsnow.blogspot.com/</a>

[J_Satch]

Bingo

Ditto for a $300 "professional" operating system. I wonder if anyone has ever crunched the numbers to determine hypothetical sales and revenues for reasonably (definition subjective, of course) priced software. Even if the vendors profitted less from the sale of a single package, would they ultimately reap greater profits from higher legitimate sales volumes?

On the other hand...

You could have simply used a Freeware <br />equivalent. Unless there's a very specific <br />high-end feature you're looking for, there's <br />almost certainly a free equivalent. <br /> <br />Many people use the GIMP, for example, in place <br />of Photoshop. You can even get a version that <br />replicates the Photoshop UI if you don't want to <br />learn the normal GIMP UI. Sure, you don't have <br />the pre-press features, but on the otehr hand it <br />has a variety of features absent in Photoshop <br />that are definitely more interesting to the <br />hobbiest or novice. <br /> <br />(...and the next version will have many of the <br />high-end features of Photoshop). <br /> <br />What I'm getting at is, the BSA is telling you <br />to stop pirating commercial software when you <br />can simply go freeware. I think the BSA has a <br />point -- there's no reason to pirate software, <br />just use the free stuff.

[AlexRiedel]

no doubt

So if you can't afford a Porsche, BMW or Mercedes it is ok to steal one?<br /><br />The "majority" of people pirating software commercially (not casually) are criminals.<br />Just like the "majority" of car thieves.<br />They steal to gain a profit from unsuspecting consumers.

[thedreaming]

alternatives

There are always alternatives to commercial programs and some of them are free. For example. Gimp is a great program that pretty much does everything photoshop does and it's free and runs in just about every platform.<br /><br />Adobe themselves also offer another package called adobe photoshop elements, which is a light version of photoshop. That's actually affordable, about $100. versus the $500 for the full version.<br /><br />There's also Corel's Paintshop Pro X and Photoimpact by Ulead. Those are also affordable, so there's always a choice.

[pierregau]

GROUPAMA (a large French insurer) was caught in a $200m PIRACY case where it used "bank secrecy" to ask Police not to investigate its computers... <br /><br />The fun part of the story is that the (Paris) General Prosecuter found no infraction in this (illegal) agreement!<br /><br />See the whole story on: <br /><br />http://remoteanything.com/archives/groupama.pdf

[MahRain]

Wait a minute, that calculation...

Pirated software allows students to use expensive software such as development tools or webdesign software for their projects, it keeps costs down for small companies who can use sophisticated products that would otherwise be too expensive and therefore stimulates both innovation (through education) and economic growth by keeping costs down for smaller or startup companies.<br /><br />For a large corporation using volume licensing programs, buying 'Microsoft Office' is no big deal on a revenue of ?500 million, but for a small company, buying single licenses, 10x ? 500 can have quite a big impact on a budget.<br /><br />So the negative implications of a piracy crackdown should also be taken into account. I don't think the companies who are 'hurt' most by copying (Microsoft, Adobe, ...) are struggling!

[J_Satch]

Well...

...that doesn't really justify anything. There is always the open source option. The problem, at least imho, is not that corporations expect to profit from their products but rather that some of them simply charge exorbitant amounts for their software. This seems to be evidenced in the huge cash reserves of some of these companies.

No.

Students don't need pirated software to do their <br />work. They could use freeware (many do anyway), <br />use software provided under license to their <br />schools, or buy the student license (typically <br />10% to 25% of the regular cost of a product). <br /> <br />As for small companies: whether they realize it <br />or not, they probably don't need most of the <br />commercial software they buy. What they do need, <br />they can typically write-off their taxes, <br />depreciate it over time, or take advantage of <br />some other loop-hole. But, like the BSA is all <br />to happy to explain, using commercial software <br />-- even legitimately -- can be a huge liability <br />for your business. Compliance with the licenses, <br />the burden of proof on their validity, <br />monitoring, etc. can be time consuming and <br />expensive if you do it they way they want you <br />to. <br /> <br />The moral of the story: don't pirate and don't <br />use commercial software when you can avoid it.

[sanenazok]

Yep

Students aren't the problem, I don't think. While they might account for 10% of the 85% of pirated software in China (for example), it's better to get them used to using professional software so when they start working at some off-shore firm they will know it well. The biggest problem is the commercial pirates (arrrrr) who sell to unsuspecting end users. Once these were mostly elimiated in Eastern Europe, the piracy rate was cut in half.<br /><br />While the big companies aren't "struggling," the small and innovative ones are.

[agreddon]

I've got a solution to that

Go open source and I'm not a pirate anymore. Oh, wait, that's not the solution the BSA wants. They want me to buy the bloatware and the support packages where I can talk two hours to a guy from India who doesn't even know the language. Sorry, BSA, you talked yourself out of a customer.

[Stormspace]

Keeps prices down

The large software vendors would like you to think the piracy keeps their prices high, but the reality is that piracy is the only thing keeping large companies like Microsoft in check. A good example is their program in China where they are offering a stripped down version of Windows at a lower price. This would never have happened if piracy hadn't forced them to do it to compete.<br /><br />Also I agree with earlier commenters that piracy is a great tool for education among those that would never have been able to afford the software to learn it. By cracking down on piracy, implementing activation codes, and copy protecting software the company will only find it's market share shrinking as people look for less expensive alternatives. In the short run however software vendors will see a small increase as those people that can afford it switch over and go legit, but eventually lack of knowledge of their application among the general public will wane as people move to less expensive alternatives.

[AlexRiedel]

what nonsense

Ever heard of educational copies? Do you steal cars to learn driving?<br />Whatever your beef with software companies is, it does not legitimize stealing.<br /><br />You have conciniently left small software companies out of your equation. Activiation codes and copy protection exist because of dishonest people.

[aabcdefghij987654321]

I vote for hard-to-break software protection

I want those pieces of software to be un-pirateable.<br />This way, the truth will come out because people will fall back on other applications (open source, maybe simpler but cheaper local alternatives).<br /><br />This would actually boost the economy by shutting out the large established companies and move the focus back from monopoly (for certain applications at least) to market competition.<br /><br />Only "rich" companies can drop insane amount of money on MS Office when users use hardly 5% of it's features...

Nice idea, but...

As a software programmer, I can take the an entire install cd, use a de-compiler, and remove the pieces of code that make it "un-pirateable" and then recompile everything. Voila, I have an unencumbered copy that is easily "pirateable".<br /><br />There isn't anything very difficult about that for a sufficiently knowledgeable programmer, even when the originating company uses code obfuscaters and tries to "encrypt" the cd (they usually have everything on the cd necessary to break the encryption, too). I think the best solution to reduce piracy is to reduce software prices in a given market that would make the software easily affordable to a majority of the people/organizations in that market.

[bobby_brady]

99% of my "pirated" software I wouldn't have purchased

In fact, thanks to some friends, I have actually purchased software because of piracy. The BSA is full of BS.

[AlexRiedel]

So you are...

... a thief. Your parents would be so proud, no doubt.

[devonh]

Imagined revenue

Having worked for a BSA member, I know the corporate line about how much revenue is lost.<br /><br />However, most of those folks in Asia who are pirating expensive software products would never buy them even if they could afford them. Yes, there are some businesses using illegal copies who should pay for the licenses, but most of the pirates would never be a "prospect" in the eyes of a sales manager. This is not equivalent to pirating music...which harms the music industry and artists directly. People who pirate music are likely using expensive hardware with broadband Internet connections, and should pay for the music. Not moral relativism - just the reality of how many copies of Office or AutoCAD or whatever are really needed. Pirating software or music is wrong, no question! But to estimate how much revenue is lost is like counting those unhatched birds.

[seamonkey420]

also agreed! any pirated software i use i would never have purchased..

man... seriously, would i pay over $3,000 for 3D Studio Max to just play for a few hours and then uninstall? no.<br /><br />its like music. the music i download on the net is music i prob would never have bought anyways. so how can a company say they are losing money to piracy when most consumers would never purchase the software to start with? <br /><br />plus, if its a good application, i will buy it. i just do not feel that its fair to have to purchase a piece of software at $50+ and then after using it a day realize it doesn't do what you want or what it claimed to or is super buggy.<br /><br />Just my .02..

[thedreaming]

What corporations want

They want you to buy their products, all their products, regardless of whether you actually needed the product or the service or the upgrade, that's not important. What's important to them is their bottom line and when you go around thinking for yourself, it makes them nervous because you might say, "Why did I pay $500 for photoshop when Gimp does the same thing and for free?"<br /><br />I know of plenty of people that download their music/movies/software off the net. If they like what they've download it, they go out and buy it! They spend more money now on products than before they started downloading it from the net but you never hear anyone quote those numbers. Only that we're costing them billions of dollars but our piracy rate is only 26% and china's is 90% why are we being constantly being fingered as the bad guy. Go after china and when they stop pirating movies/music/software, then maybe the corporations will make enough money so that they can start ignoring the piracy at home and then we can just silently download our little hearts out without fear of the RIAA or MPAA lurking in the shadows.

[udamdirtyape]

Piracy helped me learn, and eventually buy...

I first used pirated Adobe and Macromedia products in the mid-90's, as they upgraded, I upgraded my pirate copies. Now I am working as a network admin/webmaster, and I have had my company purchase multiple licenses for both product suites, and all because I became firmilliar with them through piracy. If I could not have used a pirated version, I would have learned open source programs, and would probably be using them instead.

[dstark--2008]

Piracy helped me learn, and eventually buy...

Exactly. I would never have purchased Adobe Suite, Macromedia Suite, and a whole bunch of other programs if I hadn't been using a pirated copy for a few months.<br /><br />I don't upgrade my pirated software. If they go from version 6 to 7, I get rid of my pirated version 6 and buy version 7. But there's no way in hell I'm paying $800 for a program that may or may not do what the vendor claims it will.<br /><br />Give me an uncripled trial, tech support that isn't outsourced to a call centre staffed by non-techies, and a damm manual and I'll probably buy your software. But if you insist I spend $800 on nothing more than a cardcoard box and a CD, I'm going to run it for at least a few months to make sure it works like it should.<br /><br />Stop lying to me and trying to rip me off and I'll do the same.

[coreyleewallace]

Pirates!

"Without piracy, we could increase revenue by 30 percent to 50 percent. At the very least, this would mean that there would be fresh funds available for investment to hire seven to 10 additional staff in research and development,"<br />I'd love to know how they can blame this on piracy and keep a straight face, pirated software is usually free for download, now I know some people will see this and think "Well if you can't download it for free you'll pay for it" WRONG, If you are actively searching the internet for pirated software it says one thing about you and one thing only, you had no intention of paying for it.<br />So how are these companies losing profits they weren't going to get in the first place?<br />ANSWER: They aren't.<br />They're using piracy as an excuse to gain more control over what we can and can't do with our computers.<br />The music and movie companies use the same blame game to get more control over what we can and can't do with our entertainment devices, and with all the legal ways of getting music in particular THEY definately should stop blaming pirates for supposed profit loss, because like I said about the software, if you are actively looking for pirated music, you never had any intention of paying for it. The Movie companies just need to beat their pirate compition with a better and more widely available digital product

I endorse piracy!

Specifically, the game Pirates! by WizKids games <br />is an excellent beer and pretzels game. <br /> <br /><a class="jive-link-external" href="http://www.wizkidsgames.com" target="_newWindow">http://www.wizkidsgames.com</a>

[Jerry Dawson]

Is this really news?

Surely all that has really changed is that people are now downloading from the internet rather than burning a copy or (once upon a time) copying the floppy(ies). Software needs to be test-driven before purchase. I know of just one music shop in London where you can test out and try music software (which costs a fortune). In my view, nobody, be it an individual or a company, is going to buy a pig-in-a-poke. And this most certainly does mean that the bulk of things copied/downloaded for test purposes remain unsatisfactory/unused, and thus do not equate to any form of sale.<br /><br />The other major aspect of this question is what happens when you are 'forced' to use software you do not like (read MS Office). Take a guess whether people are prepared to pay any amount just so they can read a Word doc.

Good argument: think Cheese.

When I hear this argument, I immediately think <br />of Richard Cheese. For those who don't know who <br />Richard Cheese is, he's a lounge singer that <br />performs hardcore rock in the traditional lounge <br />singer style (think of "I'm a Creep" performed <br />on a grand piano in a hotel lobby by a guy in a <br />leisure suit). <br /> <br />I wouldn't pay for Cheese' CDs (assuming he has <br />made some), but nonetheless I have a couple of <br />MP3s of his music given to me by someone that <br />thinks Cheese is hilarious. I did get a chuckle <br />from listening to the tracks once through, but <br />haven't had a desire to listen to them a second <br />time nor do I find myself compelled to search <br />for more Cheese. On the other hand, I still have <br />the Cheese that my friend gave me. Why? Well, <br />you never know when you'll meet someone that <br />might like Cheese. And if I have Cheese to <br />share, well, they'll find themselves aware of <br />Cheese and Cheese will be just a little more <br />famous than before. And who knows, maybe people <br />I expose to my Cheese will seek out Cheese on <br />CD, or attend a Cheese concert. <br /> <br />In the end, my Cheese doesn't imply the loss of <br />a sale. I would never have bought it myself and <br />have no desire to buy more Cheese. But by <br />exposing others to Cheese, perhaps more music <br />will be sold. <br /> <br />I think the same logic applies to the Cheesy <br />software vendors the BSA represents.

[System Tyrant]

Lower prices...

won't stop piracy, but it might make some people think more about purchasing it instead of stealing it. However, as long as all software isn't free there will be piracy.<br /><br />One solution would be to give away your software and sell your services. This doesn't work for everything, but it would work for some.<br /><br />Imagine if Microsoft gave away Windows and Office, but charged you a subscription fee for updates and fixes (security updates would still have to be free). Instead of charging customers $300 and $600 for each you charge a yearly fee of $50 and $100. In this way you get people to use your software and they will probably keep it updated to the latest version. <br /><br />I didn't put a lot of thought into that idea so don't bash me to hard.

[sanenazok]

stack 'em deep and sell them cheap

This strategy might work in the beginning. When all your competitors are selling software for $199 and get pirated, a $19 would recapture some of that market. Problem is what if you already sell for $29?<br /><br />Darn pirates, they killed Epyx games. I'll never forget or join them after that.

Anceint History

In the 1980's, Microsoft and Borland both sold a<br />pretty good c compiler. Borland changed $100,<br />and Microsoft charged $500. Hardly anybody paid <br />for Microsoft c. They probably had 10 copies <br />pirated for every one that they sold. Borland<br />had pirate problems, too, but around half of<br />their customers paid for a legal copy.<br /><br />Now, the interesting thing about this story is<br />that both Borland and Microsoft were getting<br />paid $50 per user, even though they had very<br />different retail prices. . .

Ancient History II

Lots of people in the 1980s tried copy protection<br />schemes. Legitimate users hated them. Borland<br />tried an experiment: They charged two different<br />prices for Sidekick. There was one price for a<br />copy-protected version, and for another 30% or<br />so, you could get a non-protected version.<br />The non-copy-protected version outsold the<br />copy-protected version 8 or 10 to 1.<br /><br />Shortly after this, Borland stopped selling<br />copy protected software.<br /><br />A few months later, the US Department of Defense<br />(the largest single buyer of software in the<br />world) announced that they would not be buying<br />copy-protected software. period.<br /><br />The bottom line is that copy protection causes<br />lots of problems for legitimate users, but<br />doesn't slow down the pirates very much.<br />Worse, if the pirates are selling software with<br />the copy protection removed, then users regard<br />pirated software as being better quality than<br />the legitimate stuff.

[heystoopid]

Proof? , hype? or Judith Miller style reporting?

We hear a lot of hype, see even more mysterious statistics!, but if the information regarding the values of theft involved is factual, then literally all the legal courts in world, would be inundated with the sheer volume of cases, of theft of stolen computer software, music and video media! <br />Alas, in most cases, regarding software piracy, we take the information supplied by the industry, amplify it 'Judith Miller Fiction Rules Style' without independent audit or verification! <br />Nobody, has yet to throw down the gauntlet, and simply say "prove it!", and ask where are all the convictions court cases and other information to validate and back up these claims.<br />Oh well, looks like we live in a world in which 'Judith Miller Fiction Before Fact Reporting Standards Rule', such is life

[Lolo Gecko]

actually it's the parrots ...

the pirates merely provide a convenient perch for the parrot.

Every download would mean a purchase right?

Yes of course if everyone on the planet instantly paid for every piece of software they ever "pirated" it would mean huge growth to the software industry. But really what would happen if all the sudden it was impossible to pirate software? everyone would use open source or good enough solutions. Does a financially tight student in russia need microsoft office professional? no, would they pay $400 for it? no, they would most likely either use wordpad, or download some other more reasonably priced solution. (openoffice, star office) Really piracy helps the larghe corperations. If everyone on the planet that was using a pirated copy of office had to choose to pay or go to openoffice we would see a huge shift in market share.. than people who do pay for software would have a choice (well 50% of my clients use open office the other half microsoft office... do I really need to pay 40,000 to upgrade all my workstations to microsoft office?)<br /><br />No only that but following that scenario further if openoffice had gotten to 30-50% market share microsoft would have to build the next version of office to be compatable with OO once again leveling the playing field. <br /><br />Software piracy only hurts one thing... any free or reasonable priced software alternatives that get over looked because people can use the pricey software for free.

[Earl Banser]

Excellent point

&gt;Software piracy only hurts one thing... any free or reasonable <br />&gt;priced software alternatives that get over looked because <br />people<br />&gt;can use the pricey software for free.<br /><br />Those who are on this thread yelling "piracy" do not understand <br />how certain software packages really attained massive market <br />share. Packages like Office and Photohop were freely taken from <br />work to home, and became what people were comfortable with, <br />and then enjoyed large scale paid growth in the consumer sector <br />as a result.<br /><br />As more commercial software begins to get locked down, two <br />things will occur:<br /><br />1. Hackers will continue to break the protections, but most <br />consumsers will be unaware of this activity. As such, the <br />consumers will get frustrated by the hoops they have to jump <br />through to install software.<br /><br />2. Open source will continue to improve to the point where <br />corporations find it to be an acceptable alternative. When users <br />are forced into the new open source alternatives, they will begin <br />migrating these packages back into their home computers. <br />Market share for commercial vendors will begin to decline, <br />slowly at first, then rapidly as the adoption curve grows.<br /><br />So the end result will be that "copy protection" in the long run <br />will have done nothing to help commercial vendors. But they <br />will still persist in pursuing this model, without realizing that to <br />the market the real issues are pricing, quality, and ease-of-use, <br />none of which copy protection helps address.

[oconnmic]

Freeware and Shareware

How much freeware and shareware is really pirated software or uses pirated code?

[Anonymous1234567890]

What do you think?

Um, none.

[AlexRiedel]

Not much I'd say

Never say never, but usually freeware authors and shareware authors are into creating things not ripping anyone off. This is usually more about showcasing abilities.<br />Of course there are WAREZ sites that label cracked copies of whatever as FREEWARE and charge you 20 bucks for the pleasure of downloading. But that is mislabeling, not REALLY freeware.

[Mendz]

If every software is free...

... then every software company needs to be ad supported to earn. Otherwise, there's no fund to develop the software after version 1. Private and public funding may work but they are not assured for a long time.<br /><br />Like TV networks, radios and www.google.com, ads can help fund "free-to-the-public" software. Like cable TV networks, ads can help fund "subscription" software.<br /><br />All of these would've been simpler if only all (consumer targetting) software and digital media content can be delivered as services in the same way that TVs, radios and web sites are providing services for the public.<br /><br />Sigh...

[DVDJ]

Oxymoron of 'Legitimate Piracy'

What does IDC consulting director Duncan Brown mean by the oxymoronic comment, "organized piracy ... has become a legitimate business in some countries."? If it's piracy, it's not legitimate. If it were legitimate, it would not be called piracy. Call it what it is: the organized crime of piracy. And the reporter characterizing the 21% rate of piracy in the U.S. as "modest" also is a curious word choice; in China, the piracy percentage is grotesque, while in America it's merely gross.

[thedevilbegone]

Piracy does pay for companies like Microsoft.

In fact most of us have the same inclination to work on familiar software we have worked on earlier. We tend to use pirated software but when it comes to our business area, we do recommend the same software we have been using even though it may not be a good marketleader. I guess its the same with me and the others. And I guess that's what Bill intends to do. A few years back, I had heard from one of my friends that it was ok with Bill Gates if I used pirated versions of his operating system. The reasoning would be the same. Once you are hooked you are going to recommend it in your business workspaceat a certain level. No wonder China and India which have the highest software piracy also have the highest tech workers. Does this sound right? I guess it's high time we took to piracy or encourage it atleast for our student community and home use. I doubt Bill would even mind. Not after the billions he has earned.