Software piracy cost the industry $50 billion in 2008

by Stevie Smith - May 12 2009, 15:30

Software heavyweights might be doing all they can to eliminate piracy, but a new report offered up by the Business Software Alliance (BSA) and industry research specialist IDC has revealed that efforts are largely failing and the spread of software piracy is on the increase.

Outlined in the sixth annual report released by the two groups, software piracy and illegal distribution hit a record high in 2008, which resulted in the software industry carrying huge losses of more than $50 billion USD.

In gauging the total amount of software being used across the world, the report returned that the percentage of pirated software being used jumped from 38 percent in 2007 through to 41 percent in 2008. The report largely equated the percentage increase to the poor economic climate and booming PC sales in countries such as India and China, both of which are rife with piracy.

Interestingly, while the United States has a piracy percentage rate of just 20 percent, the lowest of all countries covered by the report, the overall value of that pirated software is the world’s highest, totalling some $9.1 billion USD. 

Rubbing a little informative salt into 2008’s already gaping wound, the joint report also revealed that IT solution providers, value-added resellers, and service providers are being heavily struck by piracy-related costs.

It outlined that for every dollar lost to piracy by the software industry, between three and four dollars are lost by value-added services and support providers, which suggests total piracy-related costs of between $150 USD and $200 billion USD.

“The bad news is that PC software piracy remains so prevalent in the United States and all over the world,” commented Robert Holleyman, president and CEO of the Business Software Alliance.

“It undermines local IT service firms, gives illegal software users an unfair advantage in business, and spreads security risks,” he added. “We should not and cannot tolerate a $9 billion hit on the software industry at a time of economic stress.”

Focusing in the positive effects a downturn in software piracy could have on the ailing global economy, the report noted that a 10 percent drop could see the creation of around 600,000 new jobs in the technology services industry, while it could also prompt a boost of $24 billion USD in sales taxes garnered from legitimate products.

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