Global Piracy is keeping me up at night lately. And not for the reasons you may be thinking of.

According to Global Software Piracy Study by Business Software Alliance (BSA) published in May of 2006, thirty-five percent of the packaged software installed on personal computers worldwide in 2005 was illegal, supposedly amounting to $34 billion in global losses of revenue.

I am having a problem with these numbers, and I am riddled with questions:

  • Do reports on global Piracy account for difference in regional economic levels?
  • What should and should not be considered a true case of Piracy?
  • Can Open Source be most effective tool against Piracy?

 Can Reported Numbers Be Real?

$34 billion cannot be a realistic number. It just cannot be as simple as multiplying X number of pirated copies versus equal X number of licensed ones.

Illegal Software

So-called “Book Market” nearby Petrovka Subway Station in Kiev, Ukraine, has multiple rows of small kiosks stocked with pirated movies, music, software, games, and e-books offered at a fraction of their real cost.

Let me explain. Take Ukraine as a perfect example. Ukraine is one of the leading countries on software piracy: 85% of PC software in Ukraine is believed to be pirated, while United States has 21%. I just returned from my visit to Kiev, capital of Ukraine, where I was shocked to see countless markets and bazaars flooded with media kiosks – movies, music, software, games, e-books at a fraction of their real cost. Prices on software range from $5 to $30, including such big fish as Adobe, Novell and Microsoft products, even operating systems. From conversations with locals, I take that same goes for Russia and other Eastern European Countries.

In the United States, Microsoft Vista Home Complete Package average cost goes above $200, and for Microsoft Vista Ultimate average cost is just below $400.

According to State Statistics Committee of Ukraine, their National Average Wage is equivalent to $2147 a year. On top of that, consider that 26.7% of the Ukrainian residents live below poverty line…

For comparison: according to the US Social Security Administration, our National Average Wage index was just a few dollars short of $37,000 in year 2005. In sheer economic weight, all of that makes cost of software on average 17 times (!) more expensive for a Ukrainian vs. an American user.

According to government of Ukraine, there is $7.8 billion in budget for education in 2007. Compare it to the US real spending for Federal Education Investments: numbers for Title I and Student Aid alone in 2007 consisted of $54.89 billion.  Feel the difference?

It is clear that for an average person in Ukraine buying a licensed version of a software such as Microsoft OS is very difficult, if not impossible. It is not a matter of just greedily saving few dollars, but a matter of not being able to afford the software at all. If a person does not have access to a counterfeit (read – affordable) copy, such person will not be spending big dollars on the licensed copy, because it is not within buying capacity, period. Therefore this number cannot and should not be included in true revenue loss estimate, especially in the countries where living standards are on the poverty line or below.

There is a growing movement to raise open-source awareness, but it is still not picking up fast enough in developing counties. Private Citizens and organizations in Russia, Ukraine and nearby regions are worried about interoperability of programs and applications; they are not well-educated on the subject altogether. Generally speaking, majority of people in developing countries are not as computer literate as you and I here. They feel as if they have no choice but to use what is available to them, in order to continue to run with their daily needs at home and at work. True pirates – people who produce and move unlicensed software – take advantage of such predicament.

This brings me to my next point: who should and who should not be considered a software pirate?

What is a definition of Piracy, really?

On paper it is simple: you break the law, you pay the price. So everything boils down to a simple question: what is a definition of Piracy ? If you were to Google “definitions of Software Piracy” on the Web, the results may surprise you, as they are all different: some include illegal copying, some include distributing, and others point to illegal use. Occasionally, you may find a combination of those terms. There is no consensus there. And if you were to look at real-life stories, you would see that not every story is the same.

Where is that line that represents a point of no return? I have been using above numbers to illustrate my position. For some people out there piracy is not just about saving money you have, but rather about getting vitally important product for what little money you have got. It is as simple as to eat or not to eat.

Do not misunderstand me: I do not advocate piracy . As a web developer myself, I respect intellectual property and everything that comes with it. But I think we should differentiate dealers from end-users, and even then not every case is equal.

Majority of the end-users do not even realize that they are using an illegal product, because actual bad guys who sell chockfull of CD’s in the kiosk, or shady companies pushing PCs with illegal OS installed, sell them, in most cases, to an unsuspecting buyer as a real deal. Should those fooled unfortunate souls be viewed as true pirates and criminals and be sent to prisons, or otherwise punished on the same terms as the masterminds and profiteers behind illegal operations?

Take a look at a highly publicized criminal action taken against provincial teacher Ponosov in Russia. This action was believed by many to be initiated by Microsoft Corporation, as a showcase, a lesson to software pirates in developing countries. Ponosov was facing prison after purchasing PCs with unlicensed copies of Windows – unbeknownst to the teacher. Even thought this case was dismissed in February of 2007 due to lack of evidence, the issue is still not put to rest. By pursuing matters like this, Microsoft will not achieve a happy-end where everyone will be scared straight and will be lining up to purchase Vista directly from Bill Gates. Do you honestly think it is possible for the price equivalent of provincial teacher’s half-annual-income, in schools that do not have any budget?

When people who cannot afford software are left with no choice, they will opt for not buying anything. To provide for their PCs at home and at the office, they will eventually turn to open-source, freely distributed alternatives. Having a real, free option may be far more effective then facing punishment.

Is there an alternative to piracy?

In developing countries, enforcing punishment will put a lot of people on the streets, cripple a lot of organizations. It will especially affect not-for-profit, educational and scientific institutions with a measly-to-none portion of the federal budget; they simply cannot keep up with our economic level.

Ukraine , Russia and other high-piracy countries of that region have already begun enforcing piracy laws, while embracing low-cost alternatives. According to Russian Education Minister Karpushin schools will soon start using open source software like the Linux OS, OpenOffice, and Russky Office applications. And this is just the beginning.

Piracy is a global, deep social issue that cannot be solved just by punishment alone. Every force meets its resistance. Enforcing the law will not just slow down or eliminate piracy, but it will also backfire by accelerating and advancing further development of alternative, open source, freely distributed solutions.

Who knows, maybe such development will force the big whales to compete to the point of bringing the software prices down, so everyone will be able to afford it. Perhaps then pirates will become extinct species…

7 Basics that Keep You Out of Pirate Waters.

What can you do today to protect yourself and your organization? These simple steps will go a long way:

  • Make sure you acquire your software through an authorized dealer.
  • Keep up-to-date records of the software applications you have, and keep all the CDs, books and documentations well-organized in a safe place.
  • Designate an Anti-Piracy Compliance Officer within your organization.
  • Do not use software for purposes that are outside of its Usage/License agreement. That includes copying – yes, even within same organization – and exploiting software beyond expiration date, if such date is included in the agreement.
  • Communicate with your employees about not installing unauthorized copies of software and/or using any of company’s software outside of your organization.
  • Enforce policies that will protect your company against piracy
  • And, the most important thing – consult with your trusted IT advisor, an authorized VAR company; if software you are seeking is out of your budget, consider open-source solutions: there are out there, and they will prevail…

[CBC show=”y” country=”us”]Hello, USA![/CBC]
[CBC show=”y” country=”uа”]Привет, Украина![/CBC]

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