Wednesday, July 7, 2004

Software Pirates Prevailing While Microsoft Tightens its Belt: Are the Intellectual Property Wars Hitting Home?

The Business Software Alliance today announced the release of a report outlining the extent of piracy for software titles - USD 29 billion globally last year alone, whereas in the same period USD 51 billion of software was legally purchased worldwide. Notably China pirates more than 90 percent of its software, according to the report, while Western Europe is coming in at a relatively hefty 36 percent rate. In an interesting parallel today The Washington Post (REGISTRATION) notes Steve Ballmer's annual employee email declaring that Microsoft is searching for a way to reduce USD 1 billion in annual operating costs while noting that open source operating systems such as Linux are one of the major hurdles that the vendor faces in the years ahead. Subtext written in bold: it's hard to compete with folks building core I.T. software for free, much less all of the people who want to take expensive stuff off your hands for the same price, so engineers had best get used to thinner times. All of this is bad news for developed nations which are in effect providing pirate nations with industrial development subsidization and underlines the problems that many content vendors have in trying to exploit this growth profitably. There's a major crisis in conceptualizing business models for both software and content providers that has been put off for far too long. See our earlier news analysis for some wide-ranging thoughts on this problem, but in brief the need for digital rights in intellectual property management go well beyond stodgy publishers and media companies just starting to catch up with the realities of technology that's been at their disposal for decades. Let's forget about the inane and inept DMCA and start thinking as an integrated content/technology industry about how people need to make money in the years ahead in a fair manner that will really work in a global marketplace.
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