Software Piracy Costs Industry $34 Billion

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The Business Software Alliance (BSA) reported that the worldwide level of software piracy remained the same in 2005 as in 2004, but companies lost $1.6 billion more than the previous year. Estimates made by the BSA contend 35 percent of the software installed on personal computers worldwide is illegal software. The Alliance's annual study, conducted by IDC, of software piracy claimed global losses for software companies hit $34 billion in 2005. The rate of piracy decreased in the growing economic markets like China, India, and Russia. BSA also noted that Central and Eastern Europe, and the Middle East and Africa, had shown improvement as well. "This year marks the second year in a row where there has been a decrease in the PC software piracy rate in China. This is particularly significant, considering the vast PC growth taking place in the Chinese IT market," said BSA President and CEO Robert Holleyman. BSA listed the top five countries as having the worst piracy rates. The study claimed rates of 90 percent for Vietnam and Zimbabwe, 87 percent in Indonesia, and 86 percent for China and Pakistan. Software companies have taken steps to fight piracy. Microsoft (MSFT), probably the most widely victimized firm, has been using its Windows Genuine Advantage program to detect whether or not a copy of Windows on a PC has a legal license. Without a license, the PC can only download security updates from Microsoft, but no upgrades or other products for the operating system. The company has a program in place to assist people who unwittingly purchased a pirated copy of Windows or other Microsoft products. For Windows, Microsoft will provide a legal copy of the OS to those who have a receipt for the purchase of the unlicensed copy. The program has helped Microsoft investigate and bring legal action against companies that sell those counterfeit copies of its software.

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http://www.internetfinancialnews.com/insiderreports/featured/ifn-2-20060524SoftwarePiracyCostsIndustry34Billion.html

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