BSA: One third of software in Australia is stolen

The Business Software Alliance, which represents large software vendors such as Microsoft and Symantec, published a study on Thursday that claims almost one third of business software in Australia is pirated.

The survey, which focused on the economic impact of unlicensed business software, was conducted by IDC and concluded that by reducing Australia's software piracy rate to 22 percent within three years would result in 10,000 new jobs, increase local industry revenues by AU$4.7 billion and generate AU$1.3 billion in additional tax revenues.

Jim Macnamara, chairman of the Business Software Association of Australia, claimed that the software industry will not achieve its full potential while it has to deal with these "theft rates".

"The relatively high rates of theft of intellectual property mean that the sector has yet to achieve its full economic potential… No other sector of the economy has to operate with product theft rates of 32 percent," said Macnamara in a statement.

Analyst opinions are split as to whether the study holds water.

Michael Warrilow, director at Sydney-based consultancy Hydrasight, claims the study is "the usual rubbish dished up by BSA every year" and blames software vendors for making their software licensing so complicated.

"Software vendors could improve revenues by making software licensing easier -- such as IBM has done with Passport Advantage," said Warrilow.

However, James Turner, security analyst at Frost & Sullivan Australia, told ZDNet Australia that companies using illegal software probably justify their actions by saying: 'We're a small battling company, and a massive multi-billion dollar software company in the US won't miss a few thousand dollars from us', but he claims these actions do negatively impact the local economy.

"It's an old principle of economics, though, that every dollar spent equates to 15 dollars circulating in the economy -- and only a small portion of the revenue from software sales goes offshore to the parent company. The rest stays here and keeps people in technical support, customer care, etc. all in jobs. These employees then spend their money on local businesses," said Turner.

Hydrasight's Warrilow not only disputes the BSA's figures, he also claims any additional profit would not benefit the local economy.

"Such figures for business software piracy are over-inflated in my opinion…. The vast majority of business endeavour to maintain adequate software licensing. The bulk of such (theoretical) profit would flow out of the Australian economy and into the coffers of BSA's members (e.g., Microsoft, CA, Apple)," he said.

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Talkback 5 comments

    Warped economics Anonymous -- 08/12/05 (in reply to #120124686)

    "It's an old principle of economics, though, that every dollar spent equates to 15 dollars circulating in the economy "
    Thats an interesting spin in accounting. Maybe I will give a dollar with my bank account on it to everyone I talk to on my way to work tomorrow. I should have made several thousand dollars by 4pm...

    It's true Anonymous -- 05/02/09 (in reply to #120124687)

    It's called the multiplier effect. It's very well known.

    There is actually only about $2000 Australian per person. It's just that through the magic of fractional reserve banking and the multiplier effect, it seems like much more.

    Think of it this way. I give you a dollar. You put it in your bank account. They lend most of it out. The person they lend it to gives it to someone else, who puts it in their bank account, so their bank lends most of it out, and so on....

    The BSAA offers $5,000 reward Rob Harmer -- 08/12/05

    The BSAA have also released the latest iteration of their reward scheme up to $5,000 available up until 31st Dec 2005.

    We no longer care how much the software megaloths lose on software piracy (the statistics used "to arrive at the numbers" have always been in question) BUT we do care about how much businesses are losing due to poor, lax and inefficent management practises - see http://www.pcprofile.com/We_Dont_Care_How_Much_They_Lose_Due_to_Piracy!.pdf

    BSAA Anonymous -- 09/12/05

    I tire of hearing the BSAA bleat once a year. They are all talk and NO action. Where are the prosecutions? As an honest PC dealer I am sick and tired of competing with dodgy opposition hard loading, selling NFR etc etc. So called IT professionals engaging in theft. I have reported lots of these cases and have seen nothing happen.
    The BSAA should either start doing something in the SME space or shut up.

    10,000 Imaginary Jobs? Anonymous -- 12/12/05

    I'd like to know how a decrease in software piracy in Australia would result in an increase in Aus jobs given that most of the software pirated is made outside Australia? So... we reduce software piracy in Aus... Aus companies buy more software... that money goes to the software companies in the US.. they get 10,000 more jobs and 4.7 billion... we lose 10,000 jobs and 4.7 billion. I'm not saying software piracy is a good thing, but lets not fool ourselves...

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