LETTERS TO THE EDITOR: Piracy gets keelhauling

A recent opinion column in ARN on the pros and cons of chasing after the software pirating "bad guys" drew some passionate responsesGive no quarterI have just finished reading the article "The big crackdown" by Brett Winterford on page 34 of ARN's February 7 issue and I strongly disagree with Brett's opinion that one should give leeway to software piracy in small businesses. Does he realise that the backbone of virtually all Australian industries is the little guy? This vast number of small businesses account for a huge portion of the software market.

Consider now if 50 per cent of all small businesses illegally used just a single copy of say MS Office Standard (most likely several programs may be used illegally). Given the huge number of businesses registering for GST, there must be enormous numbers of MS Office which should have been sold. If each copy is valued at, say $559, this then turns into lost revenue of (god knows how many millions). Surely if this revenue was realised, the price of software could be reduced, making it much more affordable.

We repair computer systems and quite often work on systems from all size businesses which have accounting software installed by their accountant without selling them the product. Or the software has been "borrowed" from their friends. If we are then required to format the system and reinstall Windows (due to Microsoft's programming excellence), we are then the bad guys because we are unable to reinstall all of the software originally on their system.

With regards to licence breaches, any company which keeps reasonable records should be able to account for all their assets, including the number of PCs they run and the software they own. It cannot be that difficult then to do a quick audit on each machine to count the software installed and compare to their asset register.

In my opinion the, BSAA (Business Software Association of Australia) should also be targeting retailers (big and small) who sell OEM products over the counter, and more importantly the second-hand computer dealers who supply systems with software installed but no disks or manuals. Many people we have spoken to are extremely upset when they lose everything from these systems and can't put it back even though they were sold the system with the software on it.

The small businesses should also stop and think about how they would feel if copies of their products they were selling were given away free. In this respect, whether your business is a one-person show or a giant like Microsoft, the rules should still be the same.

Trevor Austin

managing director

Oakey Computers

No apologies for hard line

I read with great interest your opinion piece (February 7) regarding software piracy and the tendency for the BSAA "big guys" to pick on the "little guys". As a director of the BSAA I'd like to respond to some of the important issues in your article.

The first is that the BSAA represents the interests of a range of software vendors - from the very large to the very small. It also represents the interests of a number of Australian channel organisations who have chosen to become Associate members.

On behalf of all our members, the BSAA actively pursues individuals and organisations who flagrantly abuse their licensing agreements, as well as those who simply don't bother with licensing agreements at all. The main focus of our investigations are end users - business and consumers, but the channel also comes under our spotlight.

Secondly, the BSAA makes absolutely no apology for its hard line on software piracy for one simple reason - software piracy is illegal and it's costing Australia dearly.

The rate of PC software piracy in Australia is 32 per cent at present - that is 5 per cent higher than in the US. Perhaps more significantly to your channel readers, the cost of this software piracy is estimated at $286 million a year to the channel alone.

In 1999, the BSAA surveyed 250 Australian software distributors and retailers and found 91 per cent of respondents said they had had seen evidence of software piracy in the Australian market, and that 87 per cent said they believed software piracy is a problem in Australia. Fifty eight per cent estimated losses due to software piracy of between 1 and 30 per cent, with the average estimated loss being 16.44 per cent of sales.

When you consider those numbers you begin to understand why the BSAA is actively working to reduce software piracy. Everyone in the channel deserves the right to play on a level playing field - the BSAA's efforts will help to level the field. Perhaps this letter will even stimulate some channel players into joining the BSAA to ensure their interests are also represented in the fight against software piracy.

I encourage your readers to visit the BSAA Web site for more information about our efforts to reduce software piracy: TegeldirectorBusiness Software Association of AustraliaSmall-time piracy equally harmfulI would like to make a couple of comments in response to the article by Brett Winterford in the February 7 issue regarding software piracy.

While the article concedes that taking action against illegitimate dealers is warranted when piracy takes place on a large scale, it misses the point that piracy by smaller partners is an equally harmful problem to the industry. On mass, smaller resellers selling pirated software create unfair competitive advantage that honest resellers cannot compete with.

While the legitimate channel invests in services and customer loyalty, they are shouldering heavy costs because dealers selling illegitimate software have no client base to protect or infrastructure costs relating to services. If Microsoft did not act, the piracy problem in the channel would worsen. Honest partners would continue to be undercut on price and their businesses would suffer while, at the same time, smaller pirates would grow into larger ones.

In addition, your article suggests that Microsoft's process in dealing with smaller illegitimate dealers is too heavy handed. To clarify, while Microsoft is interested in ensuring channel partners of any size can compete on a level playing field, we view litigation as a final resort.

To this end, we spend a great deal of time educating the channel and do not indiscriminately target dealers. In most cases the company acts in response to calls from dissatisfied customers. Each complaint is investigated and the reseller is asked to become compliant, and is provided with information on how to do so. If we receive consistent reports of suspected piracy we investigate further, and if clear evidence is found we approach the dealer with a view to settling the matter. At every opportunity the dealer is encouraged to settle and undertake to trade legitimately in the future.

Microsoft and other vendors' are motivated to curb piracy because intellectual property (IP) rights are the lifeblood of the software industry. Without the protection of IP, the software industry's ability to innovate, employ and positively impact on the economy is severely diminished.

Vanessa Hutley

corporate attorney

Microsoft Australia