NZ rated third best for software piracy

The use of pirated software dropped in 67 countries, according to new research

New Zealand is among the leaders in the fight against software piracy, according to a new international study.

The results from the Business Software Alliance's fifth-annual study on global software piracy reveal statistics that would put a smile on any software company executive's face: of the 108 countries that are covered in the recently released report, the use of pirated software dropped in 67 countries. In just eight countries did the piracy rate increase.

The three lowest-piracy countries were the United States (20%), Luxembourg (21%) and New Zealand (22%). The study also found that many developed economies continued to show gradual declines, including Australia, Belgium, Ireland, Japan, Singapore, South Africa, Sweden and Taiwan.

Russia's PC software piracy rate dropped seven points to 73%. (In the study, piracy rate is defined as the total number of units of pirated software deployed in 2007 divided by the total units of software installed.)

"Russia's piracy rate is still high, but it is decreasing at a fast pace as a result of [software] legalization programmes, government engagement and enforcement, user education and an improved economy," states the BSA study.

Many low-piracy regions, such as the United States, United Kingdom and Austria, showed decreases (though they weren't huge) in their piracy rates.

PC Software Piracy Rankings, 2007

The Business Software Alliance ranks the countries where software piracy is the worst for PC software vendors, and those where conditions are best.

The worst, in order: 1. Armenia; 2. Bangladesh, 3. Azerbaijan; 4. Moldova; 5. Zimbabwe

The best: 1. United States; 2. Luxembourg; 3. New Zealand; 4. Japan; 5. Austria.

Market research company IDC conducted the study on behalf of the BSA, an international association that represents software vendors and their hardware partners, and pursues companies that use pirated software.

In total, according to the IDC's calculations, dollar losses from piracy rose by US$8 billion from 2006 to 2007, which was a 20% increase, and now stands at nearly US$48 billion. That "losses" number, in particular, has been controversial over the years. "For many years, BSA has equated the value of pirated software to industry 'losses,'" notes the report. "This has led to questions as to whether these losses are real."

In a February 2008 post, Dave Taylor, an industry watcher, online strategist and blogger, takes issue with how the BSA calculates its losses. Taylor's fundamental problem is that the BSA "cannot assume that every illegal copy of software would have been otherwise purchased," he writes. "That's a complete fallacy and distortion of the situation and does a disservice to the companies that are represented by the Alliance."

This year's BSA report states that "while not every piece of pirated software would be purchased if piracy rates were to go down-some will be substituted, some not used-lower piracy rates yield more economic activity that stimulates more software production and purchases."

The BSA states that IDC has "confirmed this by analyzing the ratio of software spending to hardware spending for the countries in the study and finds that, as expected, there is a high correlation between piracy rates and that ratio," the report states. "The higher the piracy rate, the lower the ratio of software spending to hardware spending. Given the definition of piracy, that would seem obvious."

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