Saturday, November 03, 2007

Pirated Software has a Significant Negative Impact on the Local Software Industry?

Last weekend I came across this interesting article in Sunday Observer, titled "Nine out of 10 computers in Sri Lanka use pirated software". To read it online follow this link and scroll down to the relevant section. The newspaper article is about an IDC study about software piracy. It started like this.

"Nine out of ten computers used in Sri Lanka have pirated software, a global study on software piracy has revealed. Sri Lanka is ranked as the sixth highest country using pirated software in the world and the second in the Asia Pacific region.

These facts were revealed at a seminar on business optimisation with good governance and staying compliant with software asset management, jointly organised by Business Software, Alliance (BSA), Ceylon Chambers of Commerce, ICTA, European Chamber of Commerce of Sri Lanka and Intellectual Property Office.

The study was conducted by IDC, the IT industry's leading global market research and forecasting firm and the study for the first time covered Sri Lanka in 2006. "

Before I continue on, let me clarify that I do not promote or encourage Software Piracy. So please do not comment about how ethical or legal is pirated Software. I'm just going to point out and muse about a fact included in the article. Again, I have no doubt about the fact that most commercial Software are not affordable to average Sri Lankan PC user. $200 for an OS might me OK in USA, but in SL that's about the monthly salary of a junior executive or so. So please don't try to argue about that with me either. If you are going to say that price is affordable, don't argue either, because I don't like to waste time on a lost cause. :) End of rules and regulations.

One of the peculiar things mentioned in the article is "The software and additional services derive nearly another $1 of channel revenue and most of these additional service or channel revenue goes to local firms. Therefore pirated software has a significant negative impact on the local software industry, BSA said". Earlier in the article it was said "According to the study Sri Lanka has a 90% software piracy rate and the high piracy rate causes a retail revenue cost of US$ 86 million to the Sri Lankan software industry. The broader economic impact of software piracy is significantly greater than the retail value of pirated software"

So does this mean that Sri Lankan (and other) firms are at a mortal (yes mortal) amount of loss or impact because they don't earn from retailing and service providing? The numbers (oh, well everyone knows commercial vendors are good at this number game) seems to imply so.

Poor Microsoft and others (some say MS run the game at BSA, I didn't say so :), if their retailers and service providers are at a this severe lost, just imagine how much they are suffering?

Or............ are they? It's very very true that they are at a lost (in US$ millions). Then again, what about the effect of pirated software having on the software industry as a whole. Yeah, what about it?

People will use pirated software (like in SL). The home user will learn to work on MS Word, office worker will learn to work in MS Excel, university students will learn to program in Visual Studio, tech learners will learn to use SQL Server, IIS, ISA, Exchange etc. To put the icing on the top, they provide free/cheap subscriptions to academia as a goodwill. Great! All in all we'll have HR factor well capable of industry standard software. Isn't that what happens in Sri Lanka? What's wrong with it you might ask.

This is where I show you how deep the rabbit hole can go, to the other side of the paradise. It's like, they'll get you addicted to booze but then you'll have to BYOB. It's like they'll give free puffs, then you'll have to buy tobacco. Sounds familiar or still doesn't make any sense?

Why, the so called industry leader will have a fully grown and operational, healthy Eco system of their software well established for them to exploit. What will the users choose when they have to spend their precious bucks on software for their business? Just think how many companies in SL use commercial software (Eg: .NET based software)? Why did they choose those particular technologies? What were among the most compelling factors? Technological superiority? Unavailability of quality alternatives? Read ahead, don't mind me. I'm just ROTFL.

Then there's FUD too, which I'll not get started now. Just add FUD to the equation and I see the software industry as it is. :) One might claim I'm so paranoid, anti-MS and fundamentalist. Well, I'm so not. Maybe anti-MS :), but certainly not anti-commercial software, I'm just anti-dirty-business-model. If MS's business model happens to be uncannily similar what can I do? :)

Ok, ok, back to the course. I'm not by any means saying that local firms are not loosing a significant amount of revenue due to piracy of software. I'm just saying I can't agree to the fact that the negative impact for them is far more catastrophic than the revenue lost. The impact on the industry would be much worse should they fortify actions against piracy (I believe they should). Since big names have infiltrated the industry with pirated software, the big names will suffer more than the local industry in such a case. So I don't think that these big names have honest intentions to act against piracy at grassroot level. They are leaving the root causes and roots well intact and are beating around the bush, maybe because then they can hunt the rabbits which respond.

There goes my musing. You are welcome to comment, but don't expect me to reply if you are trying to woo me into an argument. I'd rather say vi is better than emacs or vice versa. :)


  1. This comment has been removed by the author.

  2. I see pretty much eye to eye with you on what you say, I am anti-MS in a certain way. I don't like software piracy as a matter of principal.

    I truly wish MS in SL will try to persecute all illegal MS software users. But if they do who will use MS? Catch 22! Hmmm, there are pretty good alternatives out there, trust me, I use most of them. Soooo, betch ya MS Lanka will never ever go after software pirates. Too chicken , LOL.

    One more point, Local companies rarely do off-the shelf stuff of SL, in most cases they subcontract big ones. So who says if we pay USD200 for an OS it will go to the local SW companies, may be 20 will remain in SL the 180 will be in US... hmm, so it's better to pay 1USD of which .15 will go to imation and the may be .1 will go to the CD importer :). He he Play with those numbers!

    Any way my solution, use Free and Open Source software, if MS can do it FOSS can do it 10x better!

  3. Thanx for the comments.

    I'm anti-MS in the sense of their dubious marketing practices and vicious business machine.

    Anyway I'm glad you brought the word FOSS. I deliberately left talk about FOSS in the post since some people tend to think that I'm bashing MS and marketing FOSS (which I do :) I just wanted this post to point out the crocadile tears parody. So I left the F word (FOSS :) out of the avarage reader for the post.

    Note: I myself is an avid FOSS user. I run Linux on my laptop and everyehere else I could. But it was not much relevant to the post. So I left that out too. :)

    So if you are reading this far, try Open Source software alternatives for your requirements. It's the future as far as I can say.

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