Pirated software costs the Nigerian economy about $513 million every year, hampering job growth and putting end-users’ PCs at risk of infection by Trojans, worms and viruses.
Most of the culprits are small and medium businesses, although there are larger corporations that are also using illegal software. As big as some of the Nigerian banks are, this illegal act is still being perpetrated by their IT departments. In addition to illegal downloads, one way firms pirate software is by installing the product on more PCs than the licence allowed.
According to the Business Software Alliance (BSA), the value of pirated software globally is $59 billion based on its latest figures.
Microsoft last week released the results of a study, compiled by the Harrison Group, into the effects of using pirated software. The launch coincided with the first Play Fair Day, a global initiative to promote the importance of genuine software.
The software giant says users of counterfeit software expose themselves to risk of infection by worms, Trojans and viruses – while legitimate resellers are losing millions of naira a month to rogue dealers selling unlicensed software.
Harrison Group’s study found that almost one in four pirated operating systems become infected on installation, or independently downloaded and installed malicious software when the machine connected to the internet.
“Our results indicate that counterfeit users pay a high cost for the low price of counterfeit software,” the report says. “Users of pirated software are opening themselves up to the potential for both catastrophic security breaches and significant losses in productivity and performance, regardless of the platform they use, and regardless of whether the counterfeit software’s source is the web, a street market stall, or an unprincipled hardware retailer,” said the Harrison Group researchers.
Leaking Money
According to the BSA’s latest study, 62 per cent of Nigerian PC users always use “illegal” software, while 58 per cent install “mostly illegal” software. Globally, 47 per cent of PC users acquire software through illegal means most, or all, of the time, says the association.
Experts say this practice is harming Nigeria’s software sector as companies are deprived of revenue and job growth is stifled. For every $1 worth of Microsoft software sold, the channel earns $7.
Industry analysts point out that piracy literally takes millions of naira every month from the pockets of honest resellers, and damages the economies of most emerging countries. “Pirated and counterfeit software is lining the pockets of criminals. What’s more, when companies use pirated software, it hinders job opportunities and stifles innovation,” one analyst says. The revenue that is lost when people pirate software could go to local companies, which would benefit the economy.
“Reducing software piracy creates a ripple effect throughout the economy, generating new spending on related IT services and distribution. That spending, in turn, creates jobs and delivers new tax revenues,” one of the channel partners to Microsoft.
Of the 1.4 billion PCs now installed worldwide, nearly half sit in emerging markets with high piracy rates. Because these high-piracy markets account for a rapidly increasing share of the world’s PC users, they are driving up the global piracy rate even as they marginally improve their own rates.
This will continue for years to come, until more is done to bring their rates down closer to the global average. The most common way people in developing economies engage in software piracy is to buy a single, legal copy of a program and then install it on multiple computers including in enterprises, where software has the greatest value. In fact, this year’s surveys found that 51 per cent of business decision-makers in developing markets erroneously believe this is legal to do.