BSA piracy figures need a shot of reality

Iain Thomson

Another year rolls by, and yet another study from IDC and the Business Software Alliance (BSA) about software piracy is making the headlines.

I've been covering these surveys since they started, and over the years I've become more and more sceptical about the results. While there is some useful data in the latest report, the methodology and some of the conclusions are, in my opinion, open to question.

My school history teacher used to give sage advice to his students when reading any historical document, and it's advice I still follow today.

"Before reading anything consider three questions," he would say. "Ask yourself who is writing this material, why are they writing it and who is paying for it."

Applying this leads to some interesting conclusions. The author of the report is the highly reputable analyst firm IDC. But the way that the report was compiled causes me concern, not least for the low number of actual respondents at just over 6,000 for a worldwide survey.

But of more concern is the methodology IDC uses. Roughly speaking the firm takes an estimate of the amount of computers shipped to individual companies, takes a further estimate of what software should be on those machines, and compares that, not to exact software sales, but to interviews with software vendors.

This research method has been questioned by many people, including such august organisations as The Economist magazine in its article BSA or BS?.

"The association's figures rely on sample data that may not be representative , assumptions about the average amount of software on PCs and, for some countries, guesses rather than hard data," the article reads.

"Moreover, the figures are presented in an exaggerated way by the BSA and IDC, a research firm that conducts the study. They dubiously presume that each piece of software pirated equals a direct loss of revenue to software firms."

That last sentence is particularly telling. If you're a computer user in China and a legitimate copy of Windows costs around a month's salary (which used to be the case) it's understandable to see why piracy is so popular. But if the pirated version wasn't available would you still buy Windows, or go to an open source alternative, or just abstain from buying the computer?

Similarly, if someone in a business in the US wants to use Photoshop once or twice a year and uses a pirated version, does it mean that they'd buy a legitimate version if they couldn't pirate the code? It seems more likely that they would simply farm the work out to someone else.

The second question as to why the report is written is fairly simple: the commercial IT industry needs data to press its case for tighter laws on software licensing and piracy, and surveys like this look impressive and can be used to brief journalists and governments.

Don't get me wrong: piracy is a serious issue for some parts of the industry. Commercial software companies depend on people buying their code, as opposed to open source companies that make the bulk of their profits from services.

Smaller vendors and developers can be crippled by piracy, but I see precious few of those in the list of the BSA's funding group compared to larger companies like Microsoft and Apple, both of which are flush with billions in cash reserves.

Stealing software is little different from any kind of theft, except that it's easier and doesn't require shoplifting things personally. In the past this has led to courts being fairly lenient on those caught, something that drives the IT sellers up the wall, thus the need for such surveys.