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The BSA's fading twentieth-century piracy fight

Misreading the data

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Open...and Shut The Business Software Alliance (BSA) has been wringing its hands about software piracy since 1988, but victory may soon be at hand.

No, not because pesky pirates are about to come clean, but rather because the BSA's twentieth-century battle is about to get steamrollered by twenty-first century software practices. The web and its children - open source, cloud computing - make piracy largely impossible.

Not that the BSA realizes this.

In its recent Piracy Impact Study 2010, the BSA draws a number of suspect conclusions from IDC data that suggest that 43 per cent of all software is pirated and that, but for this piracy, the software land would flow with milk, honey, jobs, and profits.

Glyn Moody points to a number of fallacies in the BSA's conclusions, but the biggest one is probably best highlighted by Jared Moya: $1 in "lost" licensed revenue would not magically become $1 in proprietary software sales if piracy were reduced. It's very likely that users would elect to spend their money elsewhere.

Like on open-source software, which IDC pegs at 12 to 22 per cent of the software market. IDC believes open-source adoption has plateaued, but this conclusion rings hollow.

Why? Because of how mobile is disrupting traditional software markets.

As the world moves to mobile computing, it's interesting to see that already 88 per cent of Android apps and 41 per cent of iPhone/iPad apps include open-source software, according to a recent OpenLogic study. This shift to heavy, open-source usage should accelerate as Android continues to claim a larger share of the mobile market.

More mobile equals more open source.

More open source, in turn, likely dismantles another BSA premise: that piracy and unlicensed software, generally, saps at GDP and jobs growth. The BSA might want to read this 2006 study financed by the European Commission's Directorate General for Enterprise and Industry, which found that open-source software is the key to increasing GDP, accelerating job growth and generally improving local economies.

I suspect we'll see open source continue to grow at proprietary software's expense, as Gartner has found, which will in turn lower piracy rates. There's little motivation to pirate open-source software.

Ironically, the BSA has discovered one of the few ways to "pirate" open-source software, and is apparently an advocate. The BSA's website apparently runs on Red Hat Enterprise Linux clone CentOS. Surely a license-respecting organization like the BSA would want to pay full freight for a RHEL license rather than undermine Red Hat by choosing CentOS? Evidently not.

Of course, open source isn't conquering the world or anything. There will be plenty of proprietary software left. The problem is that much of it will either not be available to pirate, or will be impossible to pirate.

While the BSA is concerned with paid-for, proprietary software, most of the world's software is not written by proprietary software firms, but instead by enterprises whose primary business is not software, but rather finance, pharmaceutical and so on. The software written by Morgan Stanley for Morgan Stanley simply isn't going to be pirated.

Nor is the software delivered as a cloud service, whether it be enterprise-focused or consumer-focused. It's hard to imagine pirating Salesforce.com or Gmail. The BSA/IDC report seems to understand this, but may be underestimating its effects:

At the moment, cloud computing is in an embryonic phase, accounting for less than one per cent of total IT spending in 2009. But SaaS is not embryonic. In 2009, it was a healthy $13bn market, or five per cent of the software market, and it is growing five times faster than the software market as a whole.

Since IDC's methodology for counting legitimate software begins with a sizing of the PC software market, and since IDC includes SaaS revenues in the software market, the BSA/IDC study does account for SaaS. That said, to date SaaS has had very little impact on the PC software piracy rate. SaaS has a higher penetration in mainframe and server software than in PC software, and a higher penetration in enterprise than consumer markets.

Even if it is assumed there was no piracy in SaaS offerings in 2009, the impact would be less than a percentage point on the global software piracy rate. Going forward, however, as SaaS and cloud computing increase in prominence, that impact will grow.

Yes, it will. And piracy will fall as a result.

Even those "fat-client" apps prone to piracy are becoming less so, as they increasingly tie into cloud services. Sure, you could steal that Facebook app on your phone, but how could you possibly pirate the multitudinous data centers backing that app with a continuous data stream? You can't.

I don't mean to diminish the wrong nature of stealing software. Theft is theft and should be punished. But I can't help but feel the BSA is chasing the chimera of yesterday's software problems.

There's nothing wrong with attempts to improve current income statements, but it feels like the BSA's arguments mostly serve to keep its members from actively looking forward to the future of software.

A future where piracy is either unwarranted or largely impossible. ®

Matt Asay is chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfreso's general manager for the Americas and vice president of business development, and he helped put Novell on its open-source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears every Friday on The Register.

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