UK firms 'forget' to pay £1bn for software

Software developers lost almost £1bn in revenues last year because UK companies forgot to pay the appropriate licence fees, according to research published by the Business Software Alliance on Wednesday.

The 2003 Global Piracy Study, which was conducted by research firm IDC, found that nearly one in three business software packages in the UK are unlicensed, meaning that in 2003 developers missed out on $1.6bn in revenue.

Mike Newton, a BSA spokesman, told ZDNet UK that companies generally do not mean to evade paying for licences; rather, they simply forget because of a lack of asset management procedures.

Newton said it was a myth that companies resort to piracy because they feel software costs too much.

"I genuinely think that within businesses it is an oversight of management rather than a determination to rip off software because of high pricing. The surveys we have done suggest that the driver for people not using asset management controls is not a rebellion against cost, it is simply that they don't have the time or the procedures or they are growing too fast," said Newton.

Duncan Brown, UK consulting director at IDC, agreed that, on the whole, the cost of software is not why such a large proportion of software is unlicensed.

"There is an argument that people rip off software because the price of software is too high, but I don't subscribe to that view," Brown said.

According to Brown, the UK should "feel good" because its piracy rate is among the lowest in the world, but he said that because the UK software industry is relatively large, the revenue loss is among the highest in the world.

Within Europe, the UK, Germany, Sweden, Holland, Finland, Denmark, Austria and Belgium share a relatively low rate of piracy, which ranges from 20 percent to 35 percent. In Italy, France, Portugal, Spain and Ireland, the rate is slightly higher at between 36 and 50 percent. The worst offenders are mainly Eastern European countries such as Poland, Latvia and Slovakia, where between 51 percent and 80 percent of all business software is unlicensed.

The survey estimates that software developers lost $9.7bn of revenues in Europe alone, where the average rate of piracy is 37 percent.

According to the BSA, there are long- and short-term strategies that can help reduce the amount of unlicensed software. These range from teaching school pupils "respect" for intellectual property to encouraging the widespread adoption of asset management policies.

In December 2003, the BSA launched a Web site designed to help smaller businesses understand the importance of asset management. The www.justasksam.co.uk site contains guidelines on developing an asset management policy and links to asset management software developers.

IDC conducted more than 5,600 interviews in 15 countries to help produce the 2003 Global Piracy Study survey.