Thanks for the Numbers

maddog's Doghouse

Article from Issue 217/2018
Author(s):

Published rates of "pirated" software give an indication of how much most countries lose by investing in proprietary licensing.

As a believer in education, free software, and the principle that a nation should produce as much as possible of what it needs, I read a story this week that broke my heart.

Cândido Mendes University in Rio de Janeiro may have to sell its seven-floor headquarters building (which contains a cinema and theater) to pay off the fines and court costs of R$4.3 million Brazilian real (a little more than one million US dollars) for using a "pirated" copy of Microsoft Windows. The building is valued at R$128 million (about $31.7 million), but it had no buyers in the first round of auctions.

This was an interesting case, because I would imagine a company like Microsoft would not directly sue a university over licensing issues, and particularly for a settlement that was so large. Normally Microsoft and other closed-source proprietary software companies use the Business Software Alliance (BSA) [1]. This should not be confused with the other BSA, the "Boy Scouts of America", a lthough if this BSA comes after you, you should "be prepared" for the worst.

This BSA is the one that normally offers rewards to people who rat on…er, ah…identify people who use pirated software. The BSA (founded by Microsoft in 1988) is made up of companies like Microsoft, Apple, Adobe, Oracle, and others [2]. BSA has offices in 60 countries with a headquarters on F Street in Washington D.C. Although its address is a few blocks away from the infamous K Street (filled with lobbyists of all types who try to influence the US government to make laws that favor them), the BSA does feel that one of its major functions is (from their web site) "compliance programs that promote legal software use and advocates for public policies that foster technology innovation and drive growth in the digital economy."

BSA also publishes studies about how much software (particularly desktop software) is pirated every year on a country-by-country basis, and for this I am eternally grateful.

You see, I use these studies (and the accompanying dollar values of revenue loss) to calculate how much money flows out of various countries (mostly to the USA) every year from the people and companies that do pay for the software, and how much money would have flowed out of the country if everyone paid for their software (which is what the BSA wants, of course).

Then I point out how much these countries could have paid local programmers to improve free software if they used free software instead of this expensive, closed-source software. In the case of Brazil, the latest studies I have found show that 46% of all desktop software is pirated (down from 80% in the 1980s). That means that 54% is actually paid software. The estimated loss of revenue is $186 million, which means the amount paid for legal licenses is $218 million. If all of the software was purchased, that would equal almost $400 million that would flow out of Brazil and into the coffers of foreign countries. Imagine what these numbers would be for China and India (with much larger populations and much higher rates of piracy).

The real loss to countries is not just the money following out for license fees. The penalty rates for "software piracy" are typically very high, which is why the BSA typically does the dirty work and not the member companies.

Often the offender does not realize they are "pirating" software. Some companies employ one or more people just to track licenses on their machines and to make sure all licenses are up to date. In the case of Music Man (in the year 2000 known as "Ernie Ball") guitar strings, they simply passed older computers to other employees without erasing proprietary software and then installed a new copy on the newer computers given to their engineers. The software was not being used on the older machines, it was just present. Yet Sterling Ball (the CEO) was humiliated by the BSA in their articles about the "infringement" [3].

I am told that today people often get messages from Microsoft and other companies saying that there is unlicensed software being used on their networks. I can only assume that this is built into the software that people are using, and it makes me wonder what else is being divulged by that software.

As I said, I am against piracy (software, music, etc.), and I strive to obey licensing rules. Sometimes I make mistakes, and if I do, I hope that I can make amends for them. In the meantime, I urge people to use free software, Creative-Commons-licensed media, and other freely developed and locally supported products.

Make the money you pay support the people you love.

The Author

Jon "maddog" Hall is an author, educator, computer scientist, and free software pioneer who has been a passionate advocate for Linux since 1994 when he first met Linus Torvalds and facilitated the port of Linux to a 64-bit system. He serves as president of Linux International®.

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