Thirty one percent of software installed in Australia in 2003 was pirated, amounting to a loss of US$341 million, according to findings by the Business Software Alliance in its annual piracy study, conducted by International Data Corp.
The research covered major software segments including operating systems, consumer software and local market software, as well as open source software.
Although the study shows a drop from a 32 percent piracy rate in 2002, Australia has fallen behind the rest of the world, with the US piracy rate at 22 percent, New Zealand at 23 percent and the UK at 29 percent.
"Software piracy continues to be a major challenge for Australia, just as it is for economies worldwide," said Jim Macnamara, chairman of the BSAA. "Piracy is a disadvantage in any country, governments lose tax revenue, it costs jobs throughout the technology supply chain and it inhibits the local software industry".
The study found that US$80 billion in software was installed on computers worldwide last year, but only US$51 billion was legally purchased.  This equates to 36 percent of all software installed on computers worldwide being pirated, with Australia ranked sixteenth on the global software piracy tables for total software piracy losses.
The total Australian software piracy losses of U$341 million (AU$487 million) detailed in the IDC study compare with The Cost of Counterfeiting Study (2003) conducted in Australia by the Allen Consulting Group, which found that losses due to counterfeiting totalled AU$446 million.
"The increasing availability of pirated software via spam, P2P file-sharing sites and mail-order or auction sites, will potentially drive the piracy higher in the future," said Macnamara. "The extraordinary increase during May of spam selling illegal software, as recently reported by Clearswift, shows that Internet piracy is a growing area and it's one of great concern for the BSAA".
According to the IDC report, the piracy rate of Asia Pacific as a whole stood at 53 percent, with dollar losses totaling more than US$7.5 billion.
"Piracy continues to be a significant problem through Asia Pacific, as evidenced by the region's representation among the world's piracy leaders," added Martin Kralik, senior research manager for Asia Pacific consulting at IDC. "Unfortunately, this same piracy is also hurting the region's competitiveness. The revenues that are lost to piracy are vital to the success and survival of smaller, local software developers and that ultimately undermines the region's ability to develop new products and compete in the global market".
Microsoft is benefiting from piracy. A crackdown on companies who use unlicensed copies of Windows and Office will result in a huge number of Linux and OpenOffice installations.
Why pay for closed source proprietary software that "locks in" your company to a single vendor, when free and open source software is better and cheaper?