Government helps tame software piracy rate in UAE

Software piracy rates will remain low in the UAE this year as customers continue to buy legal products as the market matures, according to a new report.

In 2008 the UAE had a software piracy rate of 36 per cent compared with a range of 51 to 62 per cent in other Gulf countries, says the study by the Business Software Alliance (BSA) trade association and research firm IDC. But due to the country's well-developed software market, piracy losses are still very high in cash terms – $170 million (Dh625m) in 2008.

The situation in the UAE is comparable with Singapore, where the piracy rate is also 36 per cent, Taiwan (39 per cent), the Czech Republic (39 per cent), South Africa (35 per cent), and Canada (32 per cent). But the UAE still lags behind developed economies such as the United States, Japan, parts of Western Europe and Australia where piracy rates are below 30 per cent, says IDC.

Piracy generally affects PC software products such as computer games, productivity applications, utilities and operating systems.

Suresh Balasubramanian, Director of Worldwide Anti-Piracy at Adobe Systems, which makes software such as Photoshop, said government influence and consumer awareness of intellectual property rights affected the scope and level of software piracy.

"In countries where governments take an active role in developing and passing laws that enforce strict rules around copyright and other intellectual property matters, we tend to see lower instances of piracy," he said.

"A second component is awareness and education. In countries where businesses and the government spend time educating consumers on the benefits of copyright law and intellectual property rights, we see reduced levels of piracy. Governments also have an opportunity to be role models in showcasing their own use of legal software," he said.

Over the past few years the UAE Government has put a lot of effort into anti-piracy campaigns and activities. The BSA, in collaboration with the Ministry of Economy, Microsoft and the Abu Dhabi and Ajman authorities, conducted raids on IT resellers who were installing illegal versions of Microsoft products. And arrests for software piracy in the country have risen by 107 per cent year-on-year.

But IDC says despite government efforts the piracy rate in the UAE increased by one per cent in 2008, mainly due to the rapidly growing installed base of PCs, especially notebooks, in homes. The home, education and small business sectors – the most price-sensitive parts of the market – contain the highest piracy rates.

Balasubramanian said that in tougher economic times businesses appeared more willing to take chances and accept a higher level of risk by not using legal software. "Short-term actions can have serious business implications and carry the potential for legal ramifications," he said, adding: "For example, pirated software may contain trojans and viruses that trick a user's machine into sending spam messages to thousands of computers, or put confidential information into the wrong hands.

"By using legal software, businesses and consumers are helping to safeguard both their machines and vital information, and they are assured of having a fully functional product with full customer support benefits from a vendor they trust.

"Companies must ensure that they are in compliance with their software licences by performing self-audits and using software asset management tools to assist with software inventory management," he said.

Financial software company Tally Solutions faces higher piracy levels in their home market, India, than in the UAE. Avinash Gupta, a member of the company's management team, said: "Different markets have different levels of piracy, for example in the Indian Subcontinent our estimate is that for every licenced copy there are about 10 non-licensed copies in the market. In the Gulf there is an awareness on technology and as a result piracy levels are low."

Tally has increased the number sales points in the markets it serves to move closer to customers.

"Getting closer to the customer helps customers to become tech savvy and in spite of the economic conditions there has been a growth in business," said Gupta.

Vikram Suri, Managing Director of Sage Software, whose product portfolio includes accounting software package Peachtree, said he had noticed a downward trend in piracy this year.

"More customers have realised that they need proper basic services to keep the product functioning effectively and reduce downtime. The Gulf has grown in terms of the uptake of genuine software. Awareness has increased and businesses realise they have to run on legal software."

An increase in the number of original equipment manufacturer pacts covering the use of legitimate software between suppliers, first and second tier distributors and PC makers is cited as another factor that is reducing piracy rates in the region.

The changing dynamics of the PC market, such as the increase in sales of notebooks and the decrease in the number of unbranded products, is another essential factor.

IDC says the degree to which local assemblers have market share in a country, usually raises piracy rates. The research firm says the increased availability of broadband encouraged internet-based piracy, and other factors include the availability of pirated and legitimate software, prices and disposable income.

Price is in fact the primary factor that dictates piracy levels, and companies such as Microsoft and accounting software firms are facing this challenge and taking some important steps.

For example when Microsoft launched Vista, it offered different versions of the same operating system, increasing the price options available to consumers and business users. The US giant is expected to take similar steps when it launches Windows 7 system.

Microsoft is following Google by making its Office product line available online to its consumer base.

Suri said: "Competitive pricing encourages users to acquire a licensed copy. In SMEs the range of business solutions is not as wide as in the consumer offering, therefore there is a limited scope for pirated software."

Competitive pricing and a customer-centric approach has helped Tally to reduce piracy. Managing Director Bharat Goenka said: "Our approach is to make it more convenient for people to trade in or sell our software and to use it."

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