software costs continue to multiply
Alan Zisman (c) 2006 First published in Business
June 13-19, 2006; issue 868
High Tech Office column;
Every spring I get a press release from the Canadian Alliance Against Software Theft
(CAAST) reporting the results of an annual survey about software piracy
in Canada and worldwide. The survey, conducted by research firm IDC
on behalf of CAAST and its U.S.
equivalent, the Business Software
claimed that worldwide, 35 per cent of all personal computer software
installed in 2005 was pirated. CAAST and the BSA represent large
software manufacturers, including Adobe
The U.S., at 22 per cent, had the lowest reported piracy rate, while
Vietnam and Zimbabwe, at 90 per cent, had the highest rates.
The Canadian rate was reported at 33 per cent, down from a reported 36
per cent in last year’s report, making Canada 16th of the 97
countries surveyed. CAAST reports that worldwide software piracy costs
$41 billion in lost sales, with Canada accounting for $943 million of
that total. The large size of the U.S. market resulted in the largest
dollar losses – some $8.3 billion – followed by a reported
$4.7 billion loss in China.
According to IDC’s John Gantz
IDC keeps track of the number of PCs sold and compares it to the number
of software packages purchased, trying to factor in variables like
open-source software, which can be downloaded and installed legally
without being purchased. An earlier survey, conducted for CAAST by
Decima Research suggested that only 16 per cent of B.C. consumers felt
very confident in their ability to pick out illegal software, while
research last summer reported that half of B.C. university students
admitted to installing pirated software that they’d downloaded or
copied from a friend.
According to Gantz, much of the drop in the overall Canadian piracy
rate is the result in an increase in sales of notebook computers
replacing desktops assembled by small local shops. The brand-name
notebooks more often ship with licensed packages of software
All these numbers leave me with mixed emotions. In many cases, a single
piece of software can sell for a dizzying range of prices. A retail
package of Microsoft Office 2003 Standard Edition lists for $539, for
instance. Unless you have a student at home, then the otherwise
identical Student and Teacher Edition lists for $209. No wonder users
are confused, and may welcome cheap and apparently legal software
advertised in an e-mail message.
CAAST suggests that software piracy results in lost jobs and taxation
lost to government and, as a result, harms the economy. If accurate,
these lost sales to the software industry instead become money that
businesses and consumers spend in other ways, resulting in job gains
outside the software sector. Moreover, IDC’s Gantz earlier
estimated that only one in 10 unauthorized copies worldwide actually
resulted in a lost sale.
And CAAST lost my sympathies several years ago when it engaged in a
campaign in Vancouver that accompanied radio ads with letters to
randomly selected businesses and other organizations implying they
should expect a visit from software auditors and suggesting recipients
take a month to get their software licences in order. Software sales
jumped, but no followup visits occurred, either in Vancouver or other
Canadian or U.S. cities targeted by CAAST and the BSA.
Don’t get me wrong: users should expect to pay for the commercial
software they have installed on their business and home computers, just
as they pay for their computer hardware, Internet connection and more.
Rather than pirating software, users should be investigating open
source and other legal alternatives.