Worldwide Software Piracy Rate Holds Steady at 35%

WASHINGTON, D.C. - A new study revealed that 35% of the software installed in 2006 on personal computers (PCs) worldwide was obtained illegally, amounting to nearly $40 billion in global losses due to software piracy.

These are among the findings of the fourth annual global PC software piracy study released on May 15, 2007, by the Business Software Alliance (BSA), an international association representing the commercial software industry. The study was conducted independently by IDC, the information technology (IT) industry's leading global market research and forecasting firm.

According to a press release by IDC, global losses increased in 2006 by more than $5 billion (15%) over the previous year. Of the 102 countries covered in this year's study, piracy rates dropped moderately in sixty-two countries, while increasing in thirteen.

Progress was seen in a number of emerging markets, most notably in China and Russia.

China's piracy rate dropped four percentage points for the second consecutive year and has dropped ten percentage points in the last three years, from 92% in 2003 to 82% in 2006. By reducing China's piracy rate by ten percentage points over three years, $864 million in losses was saved, according to IDC. The reduction in the piracy rate and the savings are the result of government efforts to increase the use of legitimate software within its own departments, vendor arrangements with PC suppliers to use legitimate software, as well as increasing industry and government education and enforcement efforts.

In Russia, the piracy rate decreased by seven percentage points since 2003, down from 87% in 2003 to 80% in 2006.

Other key findings are:

• In more than half of the 102 countries studied, the piracy rate exceeded 60%. In approximately one third of the countries, the piracy rate exceeded 75%.

• Emerging markets in Asia/Pacific, Latin America, Eastern Europe and the Middle East and Africa accounted for one-third of PC shipments, but only 10% of spending on PC software.

• The European Union (EU) and Canada continue to have high losses despite low piracy rates. The EU had losses of $11 billion with a 36% piracy rate, while Canada had losses of $784 million with a 34% piracy rate.

• Over the next four years, businesses and consumers worldwide will spend $350 billion on PC software. If current trends continue, the study predicts more than $180 billion worth of PC software will be pirated during that period.

According to John Gantz, chief research officer at IDC, a number of factors contribute to regional differences in piracy, including the strength of Intellectual Property protection, the availability of pirated software and cultural differences.

BSA President and CEO Robert Holleyman pointed out that the critical elements of the global fight against software piracy are education, strong government policy and enforcement.

The BSA-IDC Global Software Piracy Study covers piracy of all packaged software that runs on personal computers, including desktops, laptops and ultra-portables. The study does not include other types of software such as server- or mainframe-based software.