Microsoft argues the case against piracy
While most agree that illegal software is bad for business, not everyone agrees on exactly how bad. Microsoft yesterday put its bid forward, announcing that, thanks to an IDC study, it believes that for every dollar – a little less than R8 – lost to software piracy more than R40 is lost in its partner ecosystem.
According to the Microsoft-sponsored IDC white paper, illegal software reduces the pace of new sales, the life cycle of a project and the ability to fulfill contracts. In some cases, says Microsoft, projects may even have to be put on hold when illegal software on the underlying infrastructure are detected.
If piracy was reduced, says the IDC report, the "lost" R40 could be gained back in a number of ways: Software partners could gain as much as R33 from faster delivery and sales cycles, enhanced cross-selling and upselling and the natural market expansion and they could also realise another R8 or so from efficiencies thanks to lower costs of goods.
"At its worst, rampant piracy in some economies is tearing down the opportunity for legitimate businesses to exist and thrive," says Michael Beare, director of licence compliance at Microsoft.
Of course, this is Microsoft, so even piracy represents an opportunity for partners to get in with the "inadvertent" software pirates.
"The flip side of this is that within those hidden costs may lie hidden opportunities in helping these customers turn their licensing situation around," said John Gantz, senior vice president of IDC. "Much of the misuse, especially in developed countries, is inadvertent. A savvy vendor can realise an opportunity by helping customers to ‘true up’ their licensing, realising that every dollar saved from software pirates can translate to over five times that amount for the channel."
On the other hand, there is a perennial caveat to software piracy numbers. At their heart, whether they are IDC numbers or Business Software Alliance numbers, they still assume that each dollar lost through piracy can be reclaimed in equal amount. Unfortunately, in many countries the claimed rate of piracy exceeds the available funds for purchasing legitimate software by many multiples.
Simply put, most software pirates are unlikely to be converted into paying customers and so the benefits of a legitimate software chain are nowhere near as compelling as Microsoft and IDC would have consumers believe.
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