Analysis, News

Overpowering Pirates

Naser Samaenah, regional license compliance manager, Adobe Systems Middle East

Enterprises across the Middle East risk damaging their businesses through the use of pirated software, with an estimated two-thirds of businesses in the Middle East at risk from unlicensed or pirated software, according to the results of a survey released last month.

And even though many countries across the region are working hard to combat the use of counterfeit software, those tasked with fighting software piracy admit that the battle to increase awareness among end users about the pitfalls of pirated software coupled with the increasing availability of counterfeit goods online is proving difficult to curtail.

For Naser Samaenah, regional license compliance manager, Adobe Systems Middle East, the challenge lies in educating the region’s enterprises.

“There is no respect to IPR laws; companies are aware of them, but they don’t respect them…we need to educate them on how to respect the IPR laws, and work closely with the government to correct the perception of piracy and to educate them about the value and the risks of pirated software,” he says.

In the survey of IT directors in 480 businesses across Bahrain, Jordan, Saudi Arabia, Kuwait, Lebanon, Oman, Qatar and the UAE conducted for Adobe by market research firm Jacobsons, it was found that 57% of companies have no standard process for managing software authenticity, licenses and renewals. And 67% of businesses lack formal systems for software asset management, while 80% fail to identify the operational and viral threats to businesses using pirated software, it was claimed.

Jawad Al-Redha, co-chair of the Gulf division of anti-software piracy trade body Business Software Alliance (BSA)

Small and mid-sized businesses were found to be most at risk of software licensing breaches, because they are less likely to have any kind of license tracking and management system in place, while larger companies are considered more likely to have asset management systems within the business.

“Our research revealed that companies generally understand the risks but too many don’t take responsible action to control their software licensing,” adds Adobe’s Samaenah.

The majority of end users surveyed estimated that piracy is a tolerated practice in 65 – 90% of businesses in the Middle East, with half of respondents estimating that unlicensed software is fueled by availability of pirated goods, although most claimed they recognised the risks posed to company operations, from risk of prosecution and fines by law enforcement authorities, to difficulties with IT systems that are not properly supported under valid license agreements.

UAE leads the pack

In the UAE, the penalties are severe. According to Jawad Al-Redha, co-chair of the Gulf division of anti-software piracy trade body Business SoftwareAlliance (BSA), the country has one of the strongest intellectual property rights (IPR) laws in the region, with financial penalties ranging from AED 10,000 to AED 500,000 and even imprisonment.

“When it comes to combating software piracy, the UAE is considered to be the leading country in the region, largely due to the introduction of laws governing intellectual property, and the strongest enforcements of the law,” he says.

“The piracy rate is 36% now in the UAE, and we are ahead now of eight European countries, which were in the IPR field for decades. But UAE redoubled its efforts with political will, strong IPR law, and strong enforcement.”

According to the most recent figures produced for BSA by research firm IDC, Bahrain’s piracy rate was 55%, in Kuwait it was 61%, Oman 63%, Qatar 51%, in the Kingdom of Saudi Arabia 51%. In Egypt it was 59%, while in Lebanon it was 72% and 66% in Morocco.

“In the Arab world, countries with the highest piracy rate are Iraq, at 85% for the last three years, and Algeria, with a piracy rate of 84% for the last four years,” says Al-Redha.

Adverse effect

Samaenah says that resellers selling counterfeit or illegal products are harming the economies of countries across the Middle East. He explains: “According toIDC’s studies if we lower the piracy rate by 15% over the coming five years, specifically in the UAE, this will create approximately 939 jobs and will contribute around US$456 million in GDP, with $3 million in local industry and generate $42 million to the government in terms of tax. So this has a huge impact on the government, and on local industry.”

In order to combat counterfeit software, BSA’s Al-Redha says that the best way to reduce the piracy rates is through the introduction of a strong IPR law and rigid enforcement of regulations, together with a belief in the benefits of implementing IPR law.

“It requires a lot of jobs to be done by both the public sector and the private sector to create awareness and education about IPR law and the benefits to the country and to the private sector,” he adds.

But as governments and software firms move to counter the efforts of counterfeiters, they face a greater challenge as the products move out from behind counters and into the virtual world.

The push towards cloud computing, with more and more software available over the internet is creating an even bigger challenge for software companies and the organisations tasked with reducing piracy.

Online piracy is described by Al-Redha as “the new trend”. “BSA has thousands of [online] cases; they have closed down a lot of sites, and there are a lot of cases pending and a lot of warning letters have been sent, but the problem is as soon as you close 10 sites or a hundred sites, hundreds more appear in their place.

“The rate of piracy is increasing online, and the number of sites which are offering illegal software is increasing year by year. A lot of sites were taken down, but unfortunately the number is increasing.”

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