Software Piracy Cost UK Industry £1.49 Billion in 2008

Computerworld UK — Pirate software on PCs in the UK has surged to a record 27 percent last year, which translates to around £1.49 billion (US$2.3 billion) in lost sales, service and support opportunities, according to the sixth annual global IDC software piracy study.

Worldwide, software piracy climbed to a record high, making up 41 percent of all software installed on the planet, according to the IDC report released today by the Business Software Alliance (BSA).

The value of unlicensed and pirated software worldwide could be as high as the US$50 (£33) billion, and cost another $150 (£99.3) billion to $200 (£132.4) billion in value-add technology services, the study of 110 countries revealed.

"Much more needs to be done by the industry and the government to warn businesses and consumers of the risks associated with under-licensed software, from a legal, financial and operational point of view," said Alyna Cope, spokesperson for the BSA UK country committee.

"Software piracy hurts our knowledge-based economy by weakening the very foundation on which it is built - respect for intellectual property and innovation."

Software piracy also hurts the wider economy, according to BSA and IDC. An IDC study released in January 2008 found that reducing software piracy by 10 percentage points over four years could generate more than £6 billion in economic growth and increase tax revenues by £1.47 billion to support local programmes and services.

British Chambers of Commerce senior policy adviser, Kevin Hoctor, said piracy threatens the digital community jobs and revenue.

"To realise the Government's Digital Britain ambition, our digital and communications industries must have the protection they need in terms of copyright and piracy," said Hoctor. "In the current economic climate the impact effective enforcement could have on employment and revenue should not be ignored".

The BSA took the opportunity to issue recommendations for the UK government, such as developing strong enforcement mechanisms and tougher anti-piracy laws.

Other recommendations included dedicating significant resources to the problem, including national IP enforcement units, cross-border cooperation, and training for local officers and judiciary officials.

Finally, the government could lead by example by implementing software management policies and requiring the public sector to use only legitimate software.

But CIOs are finding it hard to cope with the "sheer complexity" of licensing schemes, according to Matt Fisher, director at Frontrange Solutions.

"Licensing schemes have become increasingly unwieldy and difficult to manage, meaning that, despite their best efforts, organisations are struggling to get a grip on their licensing software," said Fisher.

"Coupled with the fact that there is no commonality across differing vendors' schemes has made life considerably more difficult and likely brought unintentional misuse of software," he added.

Fisher advised CIOs to implement a standard licensing practice to eliminate complexity. "The good news for organisations is that there is already a mature and professional software asset management community in place to help them address and manage licensing. Working with this community would be a step towards halting the growing software piracy problem," he said.