Pirate software market costs business $114bn, MEA market among largest

Pirated software is costing industry in excess of $114 billion, according to a new IDC survey commissioned by Microsoft.

Though many consumers and businesses purchase and download pirated software purposely as a way of saving money, the survey revealed that 33% of the software downloaded by businesses came already infected with viruses such as malware and botnets.

One in three pieces of consumer software was also found to be infected at the time of download and Microsoft says that businesses will spend 1.5 billion hours and $22 billion discovering and repairing infected software in 2013.

Over 2000 consumers and 250 CIOs in 10 countries were surveyed, as well as websites and peer-to-peer networks being analysed for dangerous software. Dinis Couto, General Manager World Wide Microsoft Anti-Piracy, said that 45% of pirated software is now downloaded from the internet, 78% of which was already infected with viruses.

“That’s nearly 80%, it’s an amazing fact,” he said.

“What we’re seeing is a new kind of organised crime, one less risky than arms dealing or drug selling – people taking advantage of high quality counterfeit and selling it at discounted prices on peer-to-peer networks or websites.”

Business Software Alliance (BSA) statistics showed that some countries in the Middle East and Africa had a pirate software market percentage among the highest in the world, although the UAE was encouragingly low.

Pirated or counterfeit software makes up 86% of Iraq’s market, Yemen 89%, whilst the UAE records only 37% of pirated downloads. Compare that to the United Kingdom (26%) and the USA (19%).

The worldwide average for pirated of counterfeit software stands at 42%, however the Middle East and Africa is an alarming 58%. Western Europe was recorded at 32% and North America as 19%.

Alongside the survey, Microsoft has announced the start of its Play It Safe campaign, which is designed to raise awareness of harmful counterfeit software.

“We’re coining the Play It Safe campaign as a way of raising awareness – alerting consumers and businesses are who are using pirated software of two things; either that they’re using pirated software knowingly but don’t know about the risks, or that they they’re using pirated software without even knowing it’s pirated in the first place and think there is no risk,” said Couto.

Another concern that counterfeit software brings to the market is the effect it has on business in any region.

“The 37% of pirated software in the UAE is 37% loss of business here. That represents $208 million cash flow loss. It affects jobs, revenue and data safety. These organised crime units are infecting these pieces of software, selling them at a discounted price and then using methods such as key scanning. The second a business or consumer logs into any sensitive site, such as banking or other, the passwords are all read and the perpetrator has full control of the machine,” Couto states.

“It’s a huge problem for the channel as well, because every time someone goes to the web to purchase cheap counterfeit software, that’s business being taken away from loyal, honest channel resellers and partners.”

Couto said that the market is in a “horrific position” when it comes to dealing with pirated software. Many piece of software now are extremely high quality and it would take detailed analysis just to recognise if it was counterfeit.

“We work on three fronts to address this; we educate and raise awareness, we engineer our software with unique keys and components which make piracy more difficult, and we also work with local entities to offer expertise for governance and protection,” he said.

The Play It Safe campaign was released in tandem with the IDC survey titled ‘The Dangerous World of Counterfeit and Pirated Software.’



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