'Our enforcement efforts focus on the business environment'

The Business Software Alliance (BSA) trade group represents some of the

world's largest software makers, including Microsoft, and its focus is to

tackle piracy of software produced by its members. Robert Holleyman II, BSA's

chief since 1990, spoke to Dataquest's Prasanto K Roy and Shipra

Arora on the evolving piracy picture in India and the world, and on the

right mix of public awareness and education, laws and their enforcement, and

technology, that can tackle piracy.

What's the BSA's scorecard for the past decade in India?



When BSA started its work 15 years ago, the piracy rates around the world

were higher than they are today as a percentage. The dollar loss is, of course,

higher today, as the market is much bigger. The good news is that by working

together as an industry, we have been able to get the piracy rate down. The

challenge is that in far too many markets it is still way too high. And I will

put India and the US as two sides of the same coin. The US, even with a low

percentage rate of piracy has the highest dollar loss due to piracy because it

is the biggest market. So, even with piracy rates in the low 20s (in percent),

that is still a $6 bn a year loss. The USA is one of the most active enforcement

campaigners in the world that BSA has, but there is still more to do.

India is in early stages. IDC data shows a drop in piracy from 74% to 72%,

last year. So, progress is there. But for any country that understands the value

of IT and what it can do, it would be surprising that for a country that has

such a vibrant software industry, nearly three fourth of the software is

pirated. And that is because not enough attention is focused on the domestic

market.

Why has technology had such a limited role in tackling piracy? Most

anti-piracy efforts are focused on policy and law enforcement.



For a decade companies did not really explore many technological ways of

trying to reduce piracy. But in the past four years, the use of technology has

seen a boost. The Internet has made the biggest difference through means like

product activation, which is simple and with minimum negative customer

experience. So, the usage of technology has also evolved and matured over the

years. Companies are exploring other means as well of doing it. But, what we

have also learnt in other markets where piracy rates are considerably lower than

in India is that it's not because technology has been deployed to reduce

piracy, it is a combination of education, good laws, enforcement of those laws,

public awareness exercises... To this you add technology and you get the right

solution.

Has product activation had any real impact?



It has had an effect. We know that people who in the past would have used

the pirated product, now at least have a barrier to using that product. I'm

sure all our members believe that some portions of that can be cracked and one

can find a way to defeat the activation. But our members report to us that there

are a sizeable number of people who do legitimize the product. So, activation

does work. While we continue to get as many calls and reports to the BSA

hotlines around the world--because the overall market is growing--there are

fewer calls that appear to be about casual copying. So, I think the activation

tools are certainly working for consumers, but not as much in the corporate

environment.

Where do those consumers fit into the BSA charter? Your focus has largely

been on commercial piracy, and the enterprise.



The message that we convey about intellectual property rights and the value

of software resonates with both business owners and consumers. So, all our

education messages really are across the board. However, the vast majority of

BSA's efforts are focused on the business environment, and our belief is that

this is an area where you can make the biggest reduction in piracy. It also

applies to the profitable businesses that are using software to make their

business grow, and a lot of their profitability is tied fundamentally to the

functionality of their software. So, the equation of asking to be compensated

for the software they use to run their business is a fair equation. As a result,

a lot of our software asset management training, seminars, marketing efforts and

enforcement efforts have really been focused on the business environment. We

hope that our public awareness messages will resonate with the consumers as

well, but typically that has not been a market segment that BSA has been focused

on.

About those enforcement efforts in the business environment...we haven't

seen a great deal of that reported since over 10 years ago.



BSA has a hotline with Nasscom and we do get regular reports on that

hotline. We verify those reports and in fact do get into legal action in the

corporate environment. Though we don't have a precise number, but this quarter

there would be around 10-15 cases that are initiated by BSA and its member

companies in the corporate environment. We are launching active campaigns in the

coming year-combining enforcement and a lot of public awareness activities.

Indian businesses will be getting the message about software piracy and managing

the software assets.

Has legal action been taken? Why do you not publicize such action, given

its potential impact?



Yes, legal action has been taken. While we do publicize from time to time,

but most of the cases are not the ones to be publicized. I suspect that at some

point we may choose to be more aggressive and publicize the individual cases. We

reserve all options in terms of publicity of those cases.

Is the BSA involved in follow-up on the reported cases?



When we get a report, we work on verifying it, including spending time with

the informer on the hotline. We make sure that they really do have accurate

information. In every one of those cases where we think we can, and where it is

legitimate, we do follow up in some way on those reports. It may vary from a

court order to a raid to any other means, depending on the nature of the report

that we get. BSA has a view towards fighting piracy and that is, we want to be

firm but fair. If somebody waits until they are reported for pirating software

then we do initiate legal action. To resolve the case they will need to pay the

penalty in addition to acquiring the licenses they need to operate in the

future. We're very clear and firm on this.

But what about subsequent follow-up? Does that company get onto some kind

of a hot-list, like a credit card defaulter list?



It varies from company to company, and country to country. But, typically,

we acquire an undertaking from the officers of that company that they will put

practices in place to prevent piracy in the future and that they would agree to

allow BSA, at any time, at some point in the future to come back and audit their

software to ensure that they are compliant.