Study: Software licence cheating costs £18bn
Published: 24 May 2006 09:15 BST
Improper software licensing resulted in a loss of $34bn (£18bn) worldwide in 2005, a $1.6bn increase over 2004, according to a study commissioned by the Business Software Alliance (BSA).
The study, conducted by information-technology research firm IDC, found that roughly one out of every three copies of personal computing software installed in 2005 was not correctly licensed. While the rate of licence cheating has fluctuated from country to country, globally it has remained steady since 2004.
"The piracy is the same rate, but overall more software and PCs were actually shipped in 2005," John Gantz, chief research officer for IDC, said on Tuesday.
China, Russia and India have seen two or more point drops in their piracy rates, while licence cheating has increased in 19 countries. But after the US, China also saw the highest revenue loss, $3.9bn. That's because the PC market in China expanded in 2005.
"In Asia Pacific, over half the countries went down and yet the average went up. That's because the amount of PCs going into India and China became a much bigger part of the total. They have an increased share in the PC market overall," Gantz said.
The United States had the lowest rate of licence cheating — 21 percent — of any country. It was followed by New Zealand, with 23 percent, and Austria and Finland, both with 26 percent.
But the US also lost the most amount of money, $6.9bn, due to licence cheating.
Topping the list of countries with high software licence cheating rates are Vietnam and Zimbabwe, each with 90 percent; Indonesia with 87 percent; and China and Pakistan with 86 percent.
The BSA divides improperly licensed software into three categories: as a purchased, legal copy that is installed on more computers than the copy is licensed for; as software that is illegally sold or distributed; and as software that is downloaded from the Internet but never paid for.
Gantz said IDC keeps a daily watch on the PC market, collecting surveys and inventory data. Percentages and figures of improperly licensed software are calculated from the number of PC units shipped, the number of software packages deployed and paid for, and from deductions for variables like open source software options. The remainder is considered improperly licensed software.
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