Pirated software will rule

LONDON: Two-thirds of software used in computers globally could be pirated in five years' time compared with about one-third currently as Internet usage widens, a study showed on Wednesday.

Global spending on software is seen rising to $300 billion over the next five years, with the value of pirated software increasing to around $200 billion.

"As Internet usage spreads, so does the potential for software piracy -- particularly with the wider availability of broadband services," said the study by technology researcher International Data Corp (IDC) and the Business Software Alliance (BSA), a trade body.

More than a third of software used in computers around the world last year was pirated, with the European Union, the United States and Canada accounting for more than half the illegal software, according to the study.

It showed that while the piracy rate globally fell by one percentage point to 35 percent last year, it increased in value to $32.7 billion from $28.8 billion in 2003.

The study covering 87 countries, and based on IDC's data for software and hardware shipments and thousands of interviews, showed that while global software turnover was $59 billion in 2004, the value of software installed was over $90 billion.

"The increase over $29 billion losses in 2003 can be attributed to a 6 percent growth overall in the global PC software industry in 2004 as well as a devaluation of the U.S. dollar," the study said.

The piracy rate for Europe, Middle East and Africa fell two percentage points to 39 percent last year, but the value of the pirated software rose by $3 billion to $15.7 billion -- around half the illegal software used globally last year.

Piracy rates fell in 37 of the countries studied, but increased in 34. In more than half the countries surveyed, piracy was above 60 percent and in 24, it exceeded 75 percent.

Within Europe, piracy rates fell two percentage points to 35 percent in 2004, while they were up three percentage points in Latin America and steady at 53 percent in Asia.

The study said France had the highest value of illegal software in the European Union and a high piracy rate of 45 percent, partly because of a large number of small companies where piracy is more rampant than in the medium to large sector.

Calling on governments to do more to help protect intellectual property, the study said a 10 percentage point cut in the piracy rate would help the global economy with 1.5 million more jobs, $64 billion in additional tax revenues and $400 billion in economic growth.