Software piracy exposed
Earlier this week the Business Software Alliance announced that software piracy cost the South African IT industry R1.9 billion in lost sales last year.
No-one, or at least very few, would argue that software piracy is a good thing. I'm certainly not a software pirate; in fact the exact opposite. But I do think that the numbers that whirl around software piracy deserve a little interrogation.
Occasionally one gets the feeling that the BSA's agenda – it is run by large proprietary vendors – leads it to over-simplify the issues with the result that, just sometimes, the wrong conclusions are reached.
Take for example the R1.9 billion that industry supposedly lost. The implicit argument is that pirated software is directly equal to lost sales. So, R1.9 billion worth of pirated software equals R1.9 billion in lost sales. The problem with this, however, is that just because someone has the software doesn't mean they would actually spend money to pay for it.
The relationship between pirated goods and lost sales is not a 1:1 relationship. A teenager with 100 hours of music and every imaginable computer game on their PC could probably never afford to buy all of that on just a weekend job. Or a small business that has ten pirated copies of Microsoft Office but only the budget to afford two. The reality is that even if software piracy was eradicated only a fraction of the pirates would actually spend the money on software.
The anti-software piracy lobby also tends to characterise software pirates as criminals. The reality is a little less black-and-white than that and, to some degree, based on simple economics. The trend is that poorer countries tend to harbour more pirates. Take for example Zimbabwe. Is it surprising that Zimbabwe leads the list of Middle East and African pirates at 91%, ahead of Yemen and that other bombarded state, Iraq? With inflation running at more than a hundred thousand percent, everything in Zimbabwe is unaffordable. So, no doubt, is software, which is probably why most of it is pirated.
A few years ago a Maastricht University study found that regularly-used proprietary software such as Office often cost more than the annual average wage of most Africans. Clearly if that is the case then there aren't a lot of African pirates that could be turned into paying customers.
The other conclusion that the BSA likes to highlight is that this is money lost to the local IT industry. Simply stating this, however, masks an equally important reality: a significant portion of the money spent on software in South Africa doesn't actually go into the pockets of South Africans. Instead it goes straight overseas.
Take Microsoft, for example. It may look as if you're buying software from a company based in Johannesburg but the truth is that you're actually buying the software from Ireland, and that is where the bulk of your money goes. The same is true of most other international vendors with SA offices. This is not to say that there isn't money to be made locally from software sales. Just that the amount made is not as much as the BSA would like to have us believe.
Software piracy is not good. But the truth about software piracy is not always as clear cut as the BSA likes to suggest.
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