Washington, D.C., (Wednesday, May 18) – Forty-six percent of the software installed on personal computers in Puerto Rico in 2004 was pirated, remaining unchanged from the 2003 piracy rate. Yet, losses from software piracy rose from $11 million in 2003 to $15 million in 2004.

These are among key findings of a global software piracy study released today by the Business Software Alliance (BSA), the international association of the world’s leading software developers. The independent study, which indicates that software piracy continues to be a major challenge worldwide, was conducted by global technology research leader IDC.

“In Puerto Rico, approximately one of every two software programs is an illegal copy,” said Michael Yong, Puerto Rico program manager for BSA. “The losses caused by software piracy have a profound economic impact around the world. Every copy of software used without proper licensing costs tax revenues, jobs, and growth opportunities for burgeoning software markets.”

Worldwide, 35 percent of the software installed on personal computers was pirated in 2004, a one percentage point decrease from 36 percent in 2003. However, losses due to piracy increased from $29 billion to $33 billion.

In 2004, the world spent more than $59 billion on commercial packaged PC software, up from $51 billion in 2003. But over $90 billion was actually installed, up from $80 billion the year before. The increase in losses to $33 billion was, in part, the result of the fact that the PC software market grew over six percent and the U.S. dollar fell against many of the world’s currencies.

Among the key findings:

• Although piracy rates decreased in 37 countries, they increased in 34 countries. They remained consistent in 16 countries.
• In more than half the 87 countries studied, the piracy rate exceeded 60 percent. In 24 countries, the piracy rate exceeded 75 percent.
• The countries with the highest piracy rates were Vietnam (92 percent), Ukraine (91 percent), China (90 percent), Zimbabwe (90 percent) and Indonesia (87 percent).
• The countries with the lowest piracy rates were the United States (21 percent), New Zealand (23 percent), Austria (25 percent), Sweden (26 percent), and United Kingdom (27 percent).
• The emerging markets in Asia Pacific, Latin America, Eastern Europe and the Middle East and Africa account for over one-third of PC shipments today, but only a tenth of spending on PC software.

“Piracy is still most prevalent in countries and regions where the software market is growing as personal computing becomes more integral to work and daily life,” said John Gantz, chief research officer at IDC. “Whether piracy goes up or down is the result of a complex equation that includes education and enforcement on one hand and, on the other hand, new users coming into the market, easier access to pirated software and/or new external factors such as shifting political conditions.”

“BSA’s education programs, policy initiatives and enforcement efforts around the world continue to have an impact on the piracy problem,” said BSA President and CEO Robert Holleyman. “But the continued influx of new users in emerging markets, and the increased availability of pirated software primarily through the Internet and P2P networks, underscores that continued education is a must. BSA will continue its efforts to stem the growth of piracy and thus stimulate local economies, create jobs, generate tax revenue, and encourage investment in technological innovation for the future.”

A primary factor in determining losses due to piracy in a specific country is the size of that country’s software market. For instance, at 21 percent, while the United States had the lowest piracy rate of all countries studied, it also had the greatest losses – $6.6 billion. That amount is almost double the amount lost in the country with the second highest losses, China, at $3.5 billion. In very large software markets, comparatively low piracy rates still amount to huge losses.

IDC used proprietary statistics for software and hardware shipments, conducted more than 7,000 interviews in 23 countries, and enlisted IDC analysts in over 50 countries to review local market conditions.

For more details about the study, please visit www.bsa.org/globalstudy.

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The Business Software Alliance (www.bsa.org) is the foremost organization dedicated to promoting a safe and legal digital world. BSA is the voice of the world's commercial software industry and its hardware partners before governments and in the international marketplace. Its members represent one of the fastest growing industries in the world. BSA programs foster technology innovation through education and policy initiatives that promote copyright protection, cyber security, trade and e-commerce. BSA members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CNC Software/Mastercam, Internet Security Systems, Macromedia, McAfee, Microsoft, PTC, SolidWorks, Sybase, Symantec, UGS and VERITAS Software.

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. More than 775 IDC analysts in 50 countries provide local expertise and insights on technology markets, and our management team is comprised of experienced and respected industry luminaries. Business executives and IT managers have relied for more than 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. Additional information can be found at www.idc.com.

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