Microsoft?s shift in anti-piracy strategy towards the more global Business Software Alliance (BSA) and away from the UK-centric Federation Against Software Theft (Fast) hints at the fact that software theft is really a boom industry.
The internet and electronic distribution of software have become major threats to the fight against piracy and that has put software theft into a wider context. Isolated cases in individual countries are not enough to maintain membership of localised organisations. If piracy is crossing borders, the anti-piracy wagon will have to cross borders too.
A joint report from the BSA and Software Publishers Association has revealed that more than $15 billion was lost during 1994 and 1995 and that figure is increasing. While the US, Australia and the UK all have fairly low rates of piracy, other countries such as Vietnam, El Salvador, Oman and Russia are showing alarmingly high rates of piracy at over 94 per cent.
This has set alarm bells ringing in Microsoft?s ears. Mark Roberts, software theft business manager at Microsoft, says that this need to stem piracy on a global basis is essential if Microsoft is to continue to meet the problem head-on. He refers to the fact that many corporates in this country have global subsidiaries and therefore demand that Microsoft ?makes a worldwide commitment?, he says.
A year ago, Novell said pretty much the same thing. It ripped up its Fast membership in favour of its own anti-piracy measures and the global efforts of the BSA. In October last year, Novell had some success in Switzerland when police raided a home where a man calling himself the Pirate was offering unlicensed Novell products over the internet.
Like Novell, Microsoft has its own anti-piracy measures. Like Novell, Microsoft has hotlines which people can phone with piracy tip-offs. For nearly two years now, Microsoft has also been running its Legalware programme to ?educate our customers,? according to Roberts, providing a number of licensing services and software tools.
The scheme covers knowledge transfer, audit and reconciliation and certification and control. But it is the company?s opening of communications with users that has grabbed the attention. Microsoft urges users to check for certificates of authenticity with pre-installed software machines and if users find something dodgy going on, they should contact Microsoft, which will follow up the piracy lead.
The users? incentive to do so is fairly simple. Microsoft will not support illegal copies of its software and it is the suppliers that will be prosecuted, not, on the whole, the users in possession of the software.
Since last summer, Microsoft has recorded a number of successes following its anti-piracy campaign. Most of these successes have been in the small system builder and Var market, which Roberts describes as being responsible for an ?epidemic of software theft?.
In November alone, Microsoft knobbled London dealer Transputec and Rugby-based dealer Star Computer Services for piracy crimes. This month, it has added to its growing list of apprehended thieves with action against Multimicro Distribution. It?s proof that despite forcing the issue to the channel, through its Clean Dealer Campaign, Microsoft dealers, like many other dealers, are driven to alternative, illegal means of income. This should not be seen as condoning piracy. The fact is that small companies can sometimes get a little desperate.
But while Microsoft has in place its internal programmes to educate dealers and users on software theft, as well as BSA to help fight its auditing battles, there are certain rumblings among dealers that Microsoft does not really help itself. It?s all very well condemning piracy, but as with other types of crime, it is important to look deeper at the possible causes.
?Microsoft has not helped itself by allowing Dell and Gateway to sell Office 97 upgrades for #20, while the dealer community has to pay one of the big distributors #200 for a copy,? says Martin Clarke, MD of portables dealer Lapland. He adds that the rate of prosecutions despite all the anti-piracy campaigns is very low, mainly because software companies do not want people to know that it is in fact very difficult to trace software thieves.
Roberts at Microsoft has also said that the company will not pass on details it learns about its customers, to Fast and the BSA. This seems to support Clarke?s argument. Microsoft would rather slap its customers? wrists and keep the process internal if it can. Otherwise, as it has already proven, the courts are always an option.
?Over the past 12 months we have concentrated our anti-piracy resources on providing knowledge and services to our customers and on working with our channel and users to drive enforcement initiatives like the Clean Dealer Campaign,? says Roberts. By using these initiatives and taking charge of any legal action resulting from them, Microsoft has in effect made its membership of Fast redundant.
This will not make Microsoft?s piracy fight any less aggressive. It didn?t become number one PC software vendor by being nice to people. According to Roberts, it will continue to forge ahead with its campaigns and prosecute offenders where possible, contrary to the belief that it is shy of mass prosecutions.
A similar stance is taken by other software vendors such as Novell and Lotus in an attempt to up the prosecution success rate. But surely the bottom line is not how many people get caught and prosecuted? Surely it?s about education and making companies realise that piracy is a major crime and not worth the risk? It?s the old crime and punishment dilemma. Do we just find the criminals and lock them up or do we look more closely at the causes of crime?
There is little evidence of any company really looking at why piracy happens. Yes, there is bound to be an element that will always break the law regardless of what crimes are at stake and regardless of whether, as companies, they are achieving good revenues. Yet Clarke?s comments must hold some weight. Surely, if a company is messing around with its product pricing and allowing one type of customer to severely undercut another, you?re going to have a lot of disgruntled customers. And some of them will inevitably resort to piracy to get around the problem. Is that so hard to figure out?
So piracy is really here to stay. It will not be eliminated, but the success companies have had in reducing software theft in the US and UK is acting as a catalyst for those companies to carry their messages to other parts of the world.
As a major software vendor, Microsoft has a lot to lose through piracy and has been instrumental in putting the spotlight back on the perennial problem. But while Microsoft continues to fight with its own fists, Fast is left looking a little lightweight. Whether or not there is still a major role for Fast to play in the future, remains to be seen. As a global organisation, the BSA has always had a stronger footing and with the world getting smaller, thanks to the internet and online distribution, it is better placed to tackle the problem on a wider scale.
The BSA?s piracy figures make a worrying statistic for the software industry. The 1995 loss of more than $13 billion is the first total loss figure ever produced by the organisation. ?Software piracy continues to plague the industry around the globe, hindering growth and innovation,? says BSA president Robert Holleyman.
?The industry as a whole, and more importantly its customers, bears the burden of these losses. Global piracy losses exceed the combined revenues of the 13 largest software companies.?
One worrying aspect for the software industry is that the pirates will become more clever. It?s now well reported that piracy is big business and that the pirates are not so easy to catch. Despite success rates in the US and UK, anti-piracy schemes can only go so far. There may soon come a time when anti-piracy operations are on a par with the actual software business and maybe then companies will spin off anti-piracy companies and form consortiums. Basically, software theft is a hell of a difficult mountain to conquer.
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