Now MS have stated Linux is breaching it's patents, I am suprised that the BSA has not included companies using Linux as using unlicensed software yet...

How do the BSA know that 27% of software used in companies is counterfeit? Do they call a bunch of companies and ask?

BSA: So, do you use pirated/counterfeit software?

IT Bod: Yeah, please send FAST after us!!

Read the report. They're counting open source software as $0 purchases, estimating how much less their vendors sold per PC, then computing drops in that as a loss.

"In its calculations of the total software put into use during the year, free open-source software, freeware, and shareware were considered legitimate software and were not considered pirated. In calculating piracy, IDC counted this as paid-for software with a price of $0. Any open-source software that is paid for would automatically show up as legitimate software based on IDC’s methodology of taking market-spending figures to compute units of legitimate software put into use in the year."

A word processor like Abiword would be costed at $0. If it displaces MS Word, MS makes say $500 less.

So MS claims it has lower sales per new PC, which is then claimed as a pirated cost of $500.

Except it isn't, the customer is using Abiword instead of MS Word.

"For the fourteen years that the Business Software Alliance has been publishing PC software piracy rates, it has equated the value of pirated software to industry “losses.” This has often led to questions as to whether these losses are real."

It's deliberate creating false numbers. By counting $ sales and then treating reduced $ sales as piracy.

Additionally, there are many machines out there running linux on which the windows tax has been paid (due to OEM installs), thereby creating an un-used license. Although like season tickets on trains, licenses are not transferrable, also like season tickets on trains this is purely based on possible profit.

I cannot feel sorry for the software industry, if they want to encourage purchase how about a little value for money!!

(just checked the Adobe.com on line store - full version of Photoshop is nearly 900 pounds x 10 for the 10 copies my office alone would need and you are talking big bucks, then add the cost of OS, the cost of other design tools such as Indesign - a few copies of an IDE for the developers etc etc ).

Let's say, for example, half the price it is now?

With European pricing for software like Microsoft's and Adobe's about twice the US prices, the gap between what you pay for a pirate version (think: Close to nothing) and what you pay for the official version (a lot) is actually twice as much as in the US. Therefore, there is twice as much incentive to pirate the software in Europe.

It never ceases to amaze me that the equation for software piracy is such a simple one (it boils down to affordability, in a nutshell) - yet the BSA and its ilk still don't understand - and think that bigger cudgels will help them to cut piracy down. In China, the gap between the price of the software, and what people earn, is so great that buying the official version is often seen as insane.

One thing is certain: With current software prices as they are, it would actually pay the average employee to fly to the US on a budget airline, buy the software there and fly back - and claim it all from expenses. Even after the costs of the flight (and a possible overnight stay), you'd probably still be quids in, compared to paying the European price. And that's just for one copy - if you were buying, say, ten copies, you'd be laughing all the way to the bank.

Oliver.

Well there's two ways to make a donkey move - a carrot or a stick.

The BSA et al seem to just keep trying bigger sticks, which of course leads to people questioning their motives (and parentage !). Perhaps if they persuaded their members to use a few more carrots and lay off the stick then they'd get better results.

Lets take a couple of examples, like Microsoft and Adobe. Both of these vendors quite blatently try and milk the market by charging MUCH higher prices in the UK than elsewhere and put various measures in place to prevent 'shopping around'. This quite naturally leads to people thinking negatively about the companies and their products - to the extent tha sales are lower, and piracy almost certainly high than if they "played fair" and were seen to be fair in their pricing.

So BSA - yes you might need a bigger stick, but the place to aim it is squarly on the butt of your members !

"UK figures have remained the same for the last three years prompting the BSA to call for tougher government action. It suggests that current penalties are not a sufficient deterrent against the use of counterfeit or unlicensed software."

It would seem more likely, given that the rate is steady, that the current penalties discourage new users from installing pirated software, but aren't enough to make companies already using pirated copies to switch to legitimate copies. Or, of course, that the legitimate cost of those copies are so ridiculously high that it's not a viable option.

(Besides, as others have said - those figures of theirs aren't exactly accurate anyway)

http://www.bsa.org/globalstudy/upload/2007-Global-Piracy-Study-EN.pdf

You can read the problem stats on page 15 onwards. They calculate the following:

PC shipments - Known

PC installed base - Known.

Software revenues - Known

Software shipments (legitimate) - not known because OSS units have no sales to measure as such. This number only estimates the non OSS sales. i.e. they're only counting unit sales of shrink wrap retail software + installed OEM software.

Software load - not known. They state this is calculated from spot audits, but only Microsoft customer get spot audits, OSS software users don't.

"The number is derived from a model that uses results from surveys in the field, analyst estimates, spot inventories, and other local research."

Total software base - not calculable, because you don't have a way to measure the software load.

Pirated software - not calculable, again the same problem.

Piracy rate - not calculable, again the same problem.

Losses

"The actual formula is: Value of Pirated Software =

(Legitimate Market)/(1 - Piracy Rate) – Legitimate Market."

In other words, if you use Abiword, the BSA counts that as a pirated copy of MS Word and a loss due to piracy as the cost of MS Word.

(Bad Jeremy bad:

http://jeremy.zawodny.com/blog/archives/009069.html

)

Thunderbird becomes a pirated copy of Outlook.

Open Office is counted as pirated MS Office.

MYSQL becomes SQL Server / Oracle DB

GCC becomes MS C++.

and so on.

You aren't counted, because your copy of OSS doesn't require an audit from the BSA, but because you didn't buy the software from the BSA member, you don't need a BSA audit, so you are counted as a pirate.

Ahoy matey.

I'm confused now. Would Charlie Dimmock be counted as stealing from bra manufacturers, according to this measurement?

Using the same logic BSA use to determine the financial losses caused by piracy, anyone who is not in law enforcement or the military is a terrist. Since we are not directly contributing to the irradication of these ev0l terrists, we must be terrists ourselves...

(spelling for comic relief)

I can't see how the figures produced are flawed as described above. Quite clearly stated:

"In its calculations of the total software put into use during the year, free open-source software, freeware, and shareware were considered legitimate software and were not considered pirated. In calculating piracy, IDC counted this as paid-for software with a price of $0."

They are not looking at lost revenue (due perhaps to normal falling sales) and then saying these losses = pirated software. Ergo, they are not claiming that OpenOffice users are pirating MS Office.

Vice versa, they are saying (and always have) that pirated copies of software = losses of revenue they would have made if people had bought it instead. The flaw in this is only that many people would simply not have bought it at the offered price. If they could not get it [nearly] free, they would use something else. Of course, the flip-side of this argument goes along the lines that the price is set that high to pay for the ten extra copies that get installed from that CD, not just the legal one, if only people would stop being naughty we could lower the price.

Don't forget, much of this "piracy" is not using faked CDs bought at car boot sales, it is any use which falls outside the terms of the license.

eg OEM software not sold with hardware, particularly when the software has been sold once preinstalled and then the media sold a second time (a reseller in Cardiff actually sent me Office CDs printed with "for sale only with Compaq PC" which he had claimed were "media only packs with no manuals as this kept the cost down". And the profit at 100%).

Pre-loaded hard drives, installs done from Select media with no license at all (maybe no Select agreement either, just a CD that Barry's mate lent us). All these grey channels cause problems - and in many cases it is not the end-user's choice. They pay a price for a machine plus the software and do not even know they are not getting what they paid for. It is unscrupulous system builders, integrators and contractors that we have to thank for "Genuine [dis]Advantage", not MS.

In effect they're extrapolating from their audited PCs, but the ability for BSA to audit PCs comes when customers buy typically MS (or other BSA) software. They then extrapolate this (a set biased to BSA customers) to all PCs and compare them to the sales of their members. The difference in value is taken to be pirated software loss.

So people who use OSS are presumed to use the same rate of BSA software as audited BSA PCs. But they use open source software and are not required to be audited so are not audited.

A copy of Abiword displacing a sale of MS Word would result in a loss in that calculation of the estimated average value of a BSA Word processor (adjusted by the few OSS software that's installed at OEM time and is measurable but negligable), basically the full cost of MS Word. It's not a loss due to piracy, it's normal price pressure driving the price down. That Abiword user is also taken out of the BSA audit/survey pool.

i.e. they count OSS sales as a piracy loss at the price of their members software.

The breach of EULA = pirate software is also a known problem with the BSA. But that is not the big problem with these numbers.

In table 5 they state that there is a linear relationship between piracy rates and loss of vendor income in each country market.

Even if they were able to count every single install of OSS software, the only way to get that $ linear relationship, is if there is a linear relationship between OSS software usage and Retail vendor software usage. That's the only way to get the $ value of sales to have a linear relationship to piracy rates.

Of course that's not real, it would be too implausible and too coincidental (*) so they must be counting OSS installs as pirated software to get that figure linear.

For example,

Country A:

1000 users buy 1000 pieces of software for 1000 PC at $1000 a piece. Real Piracy = 0, Vendor software = $1 million.

Country B:

1000 users buy 500 pieces of software for 1000 pcs at $1000 a piece and install 500 OSS software products . Real Piracy = 0, Vendor income = $500k.

No linear relationship because OSS usage is not in a linear relationship to commercial software usage in all the countries.

If you treat OSS as pirated software then you get the linear relationship IDC claim exists. Hence that is what they are doing.

* Do you think that OSS is used linearly throughout the world?

In high piracy rate markets, why would they use OSS instead of pirating the commercial applications?

In markets where no OSS translation of that product exists, why would they use OSS in the foreign language?

So there cannot be a linear relationship between piracy rate and vendor $ sales if OSS units used are properly accounted for, ergo they're not counted.

For years there have been industry surveys (annually since the mid 1990s) that talk about how much the software, music and movie industry is “losing due to piracy”. The stats are rubbery and in reality are pitching at the wrong layers of management.

Many do NOT believe the statistics being used by these industry surveys, hence they tend to ignore the advice of the BSA.

We Don’t Care How Much the Software Industry is losing Due to Piracy!”

“Really, it’s not really that important how much the software, fonts, music and movie industry is losing, but what should be relevant is “by how much more” you could improve your bottom line and cash flow! Until you check out your systems you won’t know!”

Other areas that need to be looked at cover Fonts (that are also subject to license compliance issues, the same as software) plus music and movie files all of which carry risks and exposure from anti-piracy authorities worldwide.

Further Information: http://www.pcprofile.com/We_Dont_Care_How_Much_The_Software_Industry_Is_Losing.pdf