Miles To Go Before Curbing Software Piracy

Considering the important role played by the software sector in driving the country’s growth, the impact of piracy on the Indian economy is substantial. Although we have associations like BSA and NASSCOM working to curb piracy, the piracy rate has not yet reduced noticeably. As per a report released by BSA-IDC, the piracy level in India in 2006 dropped by just 1% to 71% from 72% in 2005. The statistics are startling considering that the global average is 35% and the median is 62% which means, India does not even figure in the top half of the list.

According to an economic impact study by the IDC published in 2005, if India can reduce the piracy rate by 10% by 2009, the country will be able to add 115,000 new jobs in the IT industry and also an additional contribution of $5.9 billion into the GDP, resulting in an increase in tax revenues by $386 million.

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According to Sanjay Gupta, chairman, BSA India, “Yes, India’s piracy rate has gone down in 2006 but only by 1% from 72% in 2005 to 71% in the last year. For India’s piracy rate to drop significantly, there is a need for the government, law enforcement and judiciary to partner with BSA, increase efforts and extend a bigger support in reducing piracy. This is critical because the losses from piracy have more than doubled to $1.2 billion in 2006 in comparison to 2005 which is alarming for the burgeoning Indian IT industry, especially if you compare this with the significant drops in China (4%) and Russia (3%). These losses indicate that there is an urgent need for maximum support and partnership from the government.”

Escalating price of software

The escalating cost of software is a major concern for the price sensitive customers in India. The growth of internet users and the easy availability of software over the internet, is a major contributor to the mounting piracy rates in India. While large businesses are becoming increasingly aware of the perils of deploying pirated software as well as the benefits of original software, a high number of SMB and home users still use pirated software. Most of the times, they are either not able to distinguish between original and pirated software or are unaware of the existense of pirated ones.

Microsoft, meanwhile, has adopted a three-pronged approach focused on education, engineering and enforcement to control piracy. They are working with their customers and partners to drive awareness for piracy educate them on how they can work towards minimising this menace.

Commenting on the high cost software, Brian Campbell, director, Original Software Initiative, Microsoft India says, “People pirate software because buying it is too expensive is oversimplifying the issue. People are willing to pay for content they value, if it is priced reasonably and if they see adequate benefits in purchasing original content versus pirated. If customers see value, they will be willing to pay the price and this is what we are focused on. One must remember that low cost software is not the only response to piracy as even low priced software can be pirated.”

Creating awareness about original software

NASSCOM is working with the Government of India to frame some strong legal regulations to curb the piracy rates. The association has offered some suggestions to the Government with regard to the amendment of the IT Act 2000. One of the key programmes that BSA suggests and has been running is the end-user education through the use of specialised tools like Software Asset Management (SAM), which is now an ISO standard. The other important initiatives include programmes on consumer awareness , encouraging reporting of piracy on 24 hour hotlines and BSA website, inculcating a general respect for intellectual property of others including software, as well as strict enforcement of laws against piracy. BSA also partners with various law enforcement agencies to sensitise them on the perils and risks of piracy as well as raise awareness and understanding of the IP laws.

In order to reduce software piracy in India, companies like Microsoft, Adobe and others are taking initiatives though their channel partners and channel associations like TAIT and SITA. Brian points out, “Through various incentive programmes, events like road shows and regular update on our products we are creating awareness about the use of original software. On the engineering front, Microsoft is continuing to invest in anti-counterfeiting technologies and product features that protect its intellectual property and alert consumers of the presence of counterfeit software.”

Strong regulations: Need of the hour

Dealing with piracy in India is not an easy task. Not only this needs to become a key concern and priority for the Indian government, but it also requires a lot of important tasks and programmes to be initiated with regularity over a number of years. Comments Campbell, “To combat this issue, it is extremely important for software vendors to work together and take the initiative to promote comprehensive education and awareness programmes for end consumers and channel partners. The government and industry also play an important role with consistent intellectual property protection policies; the software industry will continue to benefit consumers and economies around the world.”

The Government needs to seriously work for the IP cause by encouraging innovation and discouraging or even denouncing piracy. The Intellectual Property laws in India are among the best in the world but lack in creating an effective and timely deterrence. The Government’s role would add to the economic development by establishing a robust local software ecosystem and infrastructure for the domestic market, generating employment and significant tax revenue.

“Strong IP adherence also increases inflow of international capital, fuels research and technical know-how for the nation. In a country like India, where IT industry is growing at a tremendous pace, Indian corporate, bodies like NASSCOM, FICCI, CII and the government need to work in coordination to address the growing menace of software piracy,” concludes Gupta.