From 74 to 75

I did one piece almost 15 years back. The story revolved around a "not

to be quoted" statement made by the country manager of a world famous

software company that was just about finding its feet in India. This country

manager, who went on to become a very high profile software personality, said

that his company did not mind piracy as it was helping the software industry get

more popular. I thought he was looking at it more as a market awareness

strategy.

Today, I am sure he would deny having ever said that, but in his heart he

must be wondering if that was the best market development strategy they should

have adopted. Piracy continues to be rampant. Recent reports have indicated that

software piracy rates in India have gone up from 74% to over 75%, incurring a

loss of over $500 mn for the industry last year.

Most often small time vendors, SOHO and home users are blamed for piracy. The

fact, according to many experts, is that in terms of value, corporate users are

much bigger pirates. And there seems to be no end to it. All the NASSCOM-BSA

raids were more for media consumption. Obviously, the SME and the SOHO segment

have also even bigger incentives to use illegal software.

Clearly, policing is not helping. And I don't think it will ever help.

"We do not have adequate policemen to take up common criminal offences like

robbery and murder. Where is the chance of following up software piracy?" a

senior police officer had said recently. Had I been a software developer, I

would go with his opinion. And, make strategies accordingly.

What are the options of surviving in a country where there is over 75%

piracy? Not too many, unless one starts thinking out of the box. And that is

exactly what software developers are refusing to do. It is crucial that

international software companies quickly sit down with their channel partners,

all categories of users, law enforcement agencies, and discuss the issues and

work out some solutions. One of the biggest grouse of most of the dealer

community, for instance, is that they have no say in the entire matter of

pricing, and there does not seem to be any formal mechanism to voice their

concerns and share feedback

The objective of the out of the box thinking should first be defined and

agreed upon by all parties. This out of box thinking exercise should lead to

higher market awareness about using licensed software, cost advantages and price

incentives, bulk licensing policies, and incentives on buying licensed software.

Software vendors might not realize but many users, while they use low cost

pirated software, will be more than eager to pay for good quality customer

support. I was surprised when one software vendor told me that over 40% users

use illegal software unknowingly. What bigger proof does one want of the urgent

need for education and awareness plans.

As of now most of the software majors do not seem to have a plan that will

make their licensed software more attractive than the unlicensed versions. My

guesstimate is that it will take about 5 to 7 years for such plans to bear

fruit. Which means that if software companies get going now and put their plans

together, with the active support of channel partners and users, it will still

take them till about 2010 to bring down piracy levels significantly. And

increase revenues.

Finally, I would also like to explain why piracy in India is an important

subject. We must not forget that India is among the few growing markets that

have a huge untapped potential. If the future growth markets for software

companies such as Microsoft and Tally is going to be India, then it better be a

profitable market.

The author is Editor of Dataquest IBRAHIM

AHMAD