Raise the Jolly Roger - anti-software piracy program - Industry Trend or Event - Brief Article

Software Magazine, Feb, 1997 by Ann Harrison

Software companies walked the plank last year, losing a record $13.2 billion to worldwide software piracy. According to a recent study released by the Business Software Alliance and the Software Publishers Association, slightly less than half of all new business application installations were pirated last year.

The overall rate of software fraud actually declined 3% from 1994, but piracy continues to flourish in Eastern Europe, the Middle East, Africa and Asia. In an area struggling to develop new industries, Eastern Europe is not likely to attract many fledgling software companies. The region had the highest overall piracy rate of 83%, producing lost revenue of $750 million. While Western Europe's piracy losses have fallen to 49%, losses on the continent remained a staggering $3.6 billion.

The most rapacious pirates operate in the Asia-Pacific region, where losses are estimated at $3.9 billion, with Japan alone reporting losses of $1.6 billion. Top offenders include Vietnam, Indonesia and China, which steals 96% of its business applications.

Meanwhile, in expanding Latin American markets, three out of every four business applications is hot. As for the United States, anti-piracy efforts appear to be having some effect, with piracy decreasing 5% from 1994 to 1995. However, 26% of all business applications in use in the U.S. are still illegal, and losses for North America remain huge at an estimated $3.2 billion.

Since these figures only track application software, they are just the tip of the iceberg. Novell Inc. in Orem, Utah, estimates that piracy of their IntranetWare/NetWare OS costs them between four and seven hundred million a year. Novell has 23 investigators tracking down pirates worldwide and maintains 26 piracy hotlines. They also cooperate with competitors Microsoft, AutoDesk and-Lotus to bust buccaneers and file lawsuits.

According to Ed Morin, who manages Novell's anti-piracy program, Russian software pirates created a particularly creative program that assigned new serial numbers to duplicate copies of NetWare 3.x. Distributors of the software were tracked down in Liechtenstein, where Novell has lodged a suit against them in the nation's Supreme Court.

Novell's efforts also include training for users and resellers who can't honestly compete against widespread piracy. Morin says some users don't know to ask for network licensing agreements or documentation. If a company does get plundered by pirates, Novell has a program to help them replace their software at reduced rates.

"We are not out there beating up people or putting them in jail," says Morin. "We are helping users and resellers, some of whom didn't even know that they were using an illegal package."