BSA tells old joke about software piracy, wants third world to pay for it

Why estimate losses by list price in places where they can't even pay the discount?

The old jokes are the best jokes, right?

The Business Software Alliance certainly thinks so.

Its most recent report on the appalling state of global software piracy says the theft of commercial software increased 14 percent during 2010, to "a record total of $58.8 billion."

It's amazing Microsoft, Oracle, Apple, Sybase, Symantec, Quark and the other giant, cash-rich members of the BSA can even stay in business.

“The software industry is being robbed blind,” according to a statement in the BSA's press release attributed to BSA President and CEO Robert Holleyman. “Nearly $59 billion worth of products were stolen last year — and the rates of theft are completely out of control in the world’s fastest-growing markets. The irony is people everywhere value intellectual property rights, but in many cases they don’t understand they are getting their software illegally.”

Those poor, ignorant third-worlders. Good thing the BSA is doing all it can to make clear to them how terrible the theft of software is and how badly each and every underprivileged one of them is hurting some of the wealthiest corporations in the world.

BSA did a separate press release for every major offending country in the world, so everyone can receive their portion of the global indictment directly.

It also put up a neat spinning globe with tiny red spots on each country and each section of the world that let the curious see the horrifying statistics for each country. It's the kind of data-contextualization and presentation technique normally used to show the contrast between rich nations and poor, starving nations and those with food, or regions suffering unusually high levels of drought and disease.

In the U.S. (average per capita income $47,284/year), the piracy rate is 20 percent, worth what the BSA estimates is a commercial value of $9.5 billion.

Kenya (average per capita income $809 per year) has a piracy rate of 79 percent, representing a loss of $3 million in commercial value.

Notice the BSA is still using "commercial value" as the measure of the damage it is suffering. "Commercial value" means "sold at full list price."

By that criterion it's being hurt more by ordinary discounting than global piracy; very little software sells at full list price. Not much of it is even worth the cost at discount, but that's different story.

The real point BSA is trying to make is that it's being ripped off, especially by countries we normally think of as having better things to do with a dollar than buy software with it – building roads through the wilderness, stopping armed bandit groups and poachers, building hospitals out of something more substantial than tent...

That's soft thinking.

"Just six years ago, the commercial value of the PC software that was being pirated in emerging economies accounted for less than a third of the world total. Last year, it accounted for more than half — $31.9 billion," the BSA report said.

In 2010 Kenya's real-dollar gross domestic product was $65.95 billion.

Microsoft's revenue for fiscal 2010 was $62.5 billion – which would make it the 65th-richest country in the world, just after Sudan and before Ecuador.

Oracle, with 2010 revenue of $27 billion, would tie with Jordan for spot No. 89, just ahead of Latvia and behind Panama.

These are not countries without money, the BSA is saying. These are countries that waste their resources on the good of their populations, when it should be spent paying for updates that repair the errors in a previous version of large software products.

Keep your focus on what's important, BSA.

Don't let all the criticism from the tech press phase you, even when it points out that your methodology and loss estimates were debunked years ago and that you make a far higher profit margin even in areas where your products are highly pirated than any other type of company doing business in the region.

Don't listen when critics taunt you for estimating losses based on list price when even legal purchasers in those countries can't afford even the deep discounts you offer there.

Don't cave in when customers complain that you structure your licensing and updates to maximize income and refuse to alter them to accommodate changes in technology (like virtual servers) that, in many cases, are primarily sold by your own members.

Get after those lawbreakers and stay after them until they pay their full share of the global miracle that is large-scale commercial software development.

But you better hurry if you're going to catch those Kenyans. I've seen them in marathons. They're fast. Even barefoot.

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