Software piracy cost $29 billion in 2003

The Business Software Alliance (BSA) released on Wednesday key findings of a report conducted by industry research firm International Data Corp. (IDC), which shows thirty-six percent of all software installed on computers worldwide in 2003 was pirated. The total loss for the pirated software represented almost US$29 billion, according to the report.

“Software piracy continues to be a major challenge for economies worldwide,” said Robert Holleyman, president and CEO of BSA. “From Algeria to New Zealand, Canada to China, piracy deprives local governments of tax revenue, costs jobs throughout the technology supply chain and cripples the local, in-country software industry.”

In previous years the BSA study only calculated business software applications, but this year’s study included three new categories: operating systems, consumer software and local market software.

IDC found that $80 billion in software was installed on computers worldwide last year. Of that, only $51 billion was legally purchased.

For its analysis, IDC used its worldwide data for software and hardware shipments, conducted more than 5,600 interviews in 15 countries, and used its in-country analysts to evaluate local market conditions. IDC identified the piracy rate and dollar losses by utilizing proprietary IDC models for PC, software and license shipments by all industry vendors in 86 countries.

“BSA will continue to work with governments to enact policies to protect software intellectual property as well as implement programs to raise business and consumer awareness about the importance of copyright protection for creative works,” said Holleyman.

Other key findings released in the report include:

The piracy rate in the Asia/Pacific region was 53 percent, with dollar losses totaling more than $7.5 billion.

In Eastern Europe, the piracy rate was 71 percent, with dollar losses at more than $2.1 billion.

In Western Europe, the rate was 36 percent, and dollar losses totaled $9.6 billion.

The average rate across Latin American countries was 63 percent, with losses totaling nearly $1.3 billion.

In the Middle Eastern and African countries, the rate was 56 percent on average, with losses totaling more than $1 billion.

In North America, the piracy rate was 23 percent. The losses totaled more than $7.2 billion.

“Unfortunately, we found that high market growth regions also tend to be high piracy regions, such as China, India and Russia,” said John Gantz, Chief Research Officer at IDC. “If the piracy rate in emerging markets — where people are rapidly integrating computers into their lives and businesses — does not drop, the worldwide piracy rate will continue to increase.”

IDC and MacCentral both owned by IDG.