'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.