PC software piracy was on the upswing in 2008 for the second year in a row, because PC shipments grew fastest in high-piracy countries like China and India, according to a study released Tuesday by the Business Software Alliance.
The study, conducted by research firm IDC, estimates that 41% of PC software installed around the world was obtained illegally last year, said BSA president and CEO Robert Holleyman in a web cast introduction to the study on the BSA Web site.
The rate of PC software piracy worldwide was 38% in the previous year.
Free or open-source software accounted for 15% of PC software installed, while paid-for software accounted for 44%, BSA said.
The value of unlicensed software, which is seen as losses to software companies, crossed the $50 billion level. Excluding the effect of exchange rates, losses grew by 5% to $50.2 billion in 2008. The legitimate PC software market was $88 billion in the same year.
The lowest-piracy countries are the U.S., Japan, New Zealand, and Luxembourg, with piracy rates of around 20%. The highest-piracy countries are Armenia, Bangladesh, Georgia, and Zimbabwe, with piracy rates of over 90%, BSA said.
The largest loss from piracy at $9.1 billion, however, came from the U.S. because it is by far the world's largest software market, according to BSA. Losses have risen steadily in recent years from the U.S., while the piracy rate has hovered around 20% to 21%t, BSA added.
Governments and software companies are making progress in slowing the illegal use of personal PC software products, but progress has stalled in the U.S., posing serious challenges to the high-tech sector and cybersecurity, BSA said.
Pirated software, besides leading to loss of revenue for software companies, and affecting jobs, also poses a security threat, Holleyman said. The recent global spread of the Conficker virus has been attributed in part to the lack of automatic security updates for unlicensed software, BSA said.
The global economic recession is having a mixed impact on software piracy, according to IDC. Consumers with reduced spending power will likely delay purchasing new computers. This will tend to increase piracy because consumers are more likely than other types of PC users to load unlicensed software on older computers, it said.
On the flip side, pocketbook pressures are also spurring sales of lower priced netbooks and laptops, which tend to come with legitimate preloaded software, IDC said.
IDC is a division of International Data Group, the parent company of IDG News Service.