Pirated software saves companies over £1.83bn a year, claims Microsoft

Microsoft has claimed pirated software saves its users in developing countries more than $2.9 billion (£1.83 billion) annually following its study of manufacturers in Central and Eastern Europe, Latin America and the Asia-Pacific region.

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Microsoft has claimed pirated software saves its users in developing countries more than $2.9 billion (£1.83 billion) annually following its study of manufacturers in Central and Eastern Europe, Latin America and the Asia-Pacific region.

The study was done by the Keystone Strategy with results announced as part of Microsoft's Global Play Fair Day yesterday. Play Fair Day is Microsoft's attempt to raise awareness on how pirated software gives an "unfair competitive advantage" to companies that steal software compared to those that pay for it, the company says.

In the UK the Business Software Alliance has been clamping down on companies using unlicensed software, having recently doubled its bounty to workers who inform on their companies to £20,000.

'Intellectual property theft endemic'

The study singled out manufacturers deliberately in the hopes of convincing the Federal Trade Commission to initiate sanctions against users of pirated software. On November 4, the National Association of Attorneys General (NAAG), sent a letter signed by 39 to the FTC and its Bureau of Competition requesting greater enforcement of the Federal Trade Commission Act (FTCA) against foreign manufacturers using pirated software. The implication is that the FTC could ban the import or sale of goods made by these companies, or take other actions.

"Theft of intellectual property is endemic in countries to which our manufacturing jobs have been transferred. Indeed, the piracy rates for software in some of our largest trading partners are above 80% and in some cases, above 90%," the letter states.

The Keystone study determined which countries are using more pirated software and how much money is being saved annually by those using it. Among manufacturers in the "BRIC" nations, Brazil, Russia, India, China, (all regarded to be at similar stages of economic development), China was found to steal the most, the report finds, and save the most: Brazil manufacturers save $186 million annually, Russia $115 million, India $505 million and China $837 million. In India, for example, those savings translate into 215,000 jobs.

Microsoft competitors also losing out

The report also tips a hat to those playing by the rules, noting that more than 4.1 million PCs in China are paying for their software licences. The message of Play Fair Day is that competitors inside those countries are being hurt by piracy, too.

On the other hand, the study also could be seen as quantifying how much money companies are spending on software and, perhaps, the potential savings available should they opt for using less expensive alternatives such as open source.

Keystone Strategy analysed data from the Bureau of Labor Statistics, the Business Software Alliance, the CIA World Factbook, government statistical reports, Microsoft research, UNIDO, software resellers and the World Bank.

Microsoft also gave a shout-out to its legitimate paying customers in BRIC nations including Hindusthan National Glass & Industries of Indian and Russian steel manufacturer Seversta. It held them up as "heroes" that also suffer an unfair disadvantage when competing against those who use pirated software.

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