BSA Piracy Study Deeply Flawed

zbik writes "Corante reports that The Economist has blown the lid off the BSA's recent report on software piracy (covered by Slashdot), referring to their methods as 'BS'. 'They dubiously presume that each piece of software pirated equals a direct loss of revenue to software firms.' The BSA has complained that the article is offensive but does not dispute their analysis. Score one for common sense."

Comments

And this is a surprise because?

[IdleTime]

We all know that their method of determining loss is flawed. Let's say I'd like to play with a program called A, I don't really need it in my business or at home, but it looks nice and maybe I'd use a part of it once. I would never have bought program A at $499 for a one time use and to play around with. I rather download it from somewhere and install it. This would count as a loss of $499 but this is flawed. I would never have bought the program in the first place if I had not gotten it from the net. Why? I can't defend spending $499 on a program I have virtually no use for.

Re:And this is a surprise because?

[IdleTime]

That was not a good example, Oracle offers all their software free of charge as long as you don't use it in a commercial setting. Go to www.oracle.com and download the Enterprise version of the database and use it as much as you like on your own private box. If you are going to use it in a business, you have to pay for it. Quite reasonable I would say...

Re:And this is a surprise because?

[h4rm0ny]

what is the threshold of use that determines whether you should have to pay for software?

The threshold is found at the high-point of the graph of piracy vs. social benefit.

When measures to prevent piracy are more damaging to us then the allowance of piracy then we stop and accept a level of piracy. I'm thinking of obvious things like DRM, but also less obvious things such as a company getting too powerful and restricting choice.

Where the line is drawn is open to fine dispute, but that is the principle. Someone could discover a universal cure for cancer tomorrow and decide not to sell it at all, or only to their friends. Some people here on /. would argue it is their right, but most would say society had every right to kick his door down and take it. In fact this situation exists - it's the US pharmaceuticals industries vs. poorer countries. A good example of the principle we use to draw your threshold.

You could also look at setting this threshold according to need. If you regard MS Office as a luxury item, then there is no threshold. But if you regard understanding of how to use it as a need in the modern world, then maybe you would say that those who can't afford it do have a right to pirate it. Losing out on an education because you're poor is not a good statement about society.

Just illustrating ideas about where you would define the threshold.

How odd...

[MaestroSartori]

From TFA:

To derive its piracy rate, IDC estimates the average amount of software that is installed on a PC per country, using data from surveys, interviews and other studies. That figure is then reduced by the known quantity of software sold per country-a calculation in which IDC specialises. The result: a (supposed) amount of piracy per country. Multiplying that figure by the revenue from legitimate sales thus yields the retail value of the unpaid-for software. This, IDC and BSA claim, equals the amount of lost revenue.

So, if there's 3,000,000 people with an operating system, but our members have only sold 2,000,000, that's 1,000,000 pirated copies of our member's operating systems! Call the police/FBI/attack-squads!!!

Surely that can't be how they work it out. Anyone ever had one of these IDC surveys? How specific are they, would they allow them to filter out software by publisher/developer so that for instance GIMP and Photoshop don't both show up as "Graphics Tools"? If not, that means every copy of GIMP would be a loss to Adobe!

(Note - it wouldn't surprise me if that is exactly how it works, and that it was entirely deliberate, but that's a different matter...)

Once in a while...

[erroneus]

... some Microsoft (related?) sales person calls my company and asks me about any plans for upgrading to whatever it is they are trying to sell at that moment. I get the pleasure of stating, "we're attempting to reduce our use of Microsoft software" and when asked, I explain that the BSA audit our company went through some years ago soured many people on Microsoft so badly that we're steadily seeking alternatives.

It's not a full or heavy press at the moment, but I believe there will be a day...

Firsthand Experience

[AgentStarks]

A company I worked for went through a BSA audit including Microsoft Office among others. When figuring their "penalty" for office, they used a 2x multiplier on retail cost. Of course they did it seperately for a full copy of Word, Excel, Powerpoint, etc... making each copy of Office to be $2400.

Software Piracy

[Tanubis]

What constitutes fair price for a block of code in a free market? What, truly, is the worth of a piece of software? When it comes down to it, a software company publishing a piece of software is much like an author publishing a book online or a composer creating a song - they are selling an idea, not a physical object that requires resources to duplicate or a service that requires people to perform it. People tend to make comparisons for the sake of expediency between pieces of software and services that require human power or products that require physical resources.

When someone downloads a piece of software they didn't pay for using something like bittorrent, there is absolutely no direct cost to the software company. Consider for comparison stealing a tool from a hardware store and driving away from an auto-shop without paying for the repair service. In the first case, the company that made the tool and all the people that formed the transportation bridge to get that tool to the store suffer a direct loss. They had to physically create something and physically transport it, and that requires resources. In the case of the auto repair, you've just cost some poor smuck an hour or so of his time - he was repairing your car. If he doesn't get anything back from his efforts because you cheated him, you've stolen his time.
Now for the software company. They researched and designed something, and in the end engineered a piece of software that acts as a tool on your computer to produce something you want. But when you download the tool from someone illegally over something like bittorrent, what are you taking from the software company? You duplicated the code for a total cost of $0. They didn't expend effort creating a CD and shipping it into a store - you haven't even stolen the transport cost. There's no physical object being stolen - they don't require anything to create more copies of the code. In fact, you could continue pirating the software from them left right and center, and outnumber their actual product sales by 10 to 1, and it wouldn't hurt their product sales at all. It makes no difference to Adobe if I download one illegal copy of PhotoShop or twenty million illegal copies of PhotoShop. Twenty million times zero is still zero. The only argument they can pose for my actions costing them something is that they have a legal right to demand any sum of money they choose from you when you use their software, and because you bypassed their right you cost them the money you would otherwise have been forced to spend.

In a capitalist society we need to reimburse people reasonably for the time and effort it takes to think up new ideas, and for the time the software companies spend creating their software - otherwise one could argue that we wouldn't get any new ideas or software developed. Because of this, we created copyright law. Copyright law is designed to allow people to profit from their ideas by giving them rights over how people use that idea, and the right to take money from people who use their idea.
Reasonably, however, if a mathematician designs a new formula that revolutionizes computers and allows circuits built using his idea to operate 500 times faster than they do today, it seems a little unreasonable for the mathematician to demand that every single computer made using his idea pay him a royalty of US $5,000,000. In a similar way, is it reasonable to permit software companies to charge whatever sum they feel for a piece of code that in the end is nothing more than an idea? The code is well thought out, and complicated, and took time to make. Yes, society should compensate them for that. Yes, people who spend their time working this way should be well compensated for their efforts and be made wealthy. But there should be a limit as to what they can demand, and that limit is set by unspoken public consensus if not in our legal system. That unspoken limit being surpassed is what results in software piracy. When the average person who w

Re:BSA? We don't need no stinkin' BSA!

[ScrewMaster]

Every corporation I've ever worked for has simply looked at software as a normal cost of doing business like any other expense, and that's as it should be. I mean, regardless of the BSA or the SPA or any similar bunch of useless people, illegally obtained software is just too much of a liability. A single lawsuit would wipe out any savings.

That's why I have to wonder where the real value of an organization like the BSA comes from, if any. Seems to me it's more like the RIAA lawsuit game ... misuse the law to intimidate a few so that the rest will fall into line. At some point, U.S. law is going to have to be adjusted to make such abuses more costly to the abusers. Besides, with product activation becoming the rule for major applications nowadays, it seems that they'll eventually become obsolete.

They don't really have to have any hard evidence of piracy to get a court order and a few federal officers to raid your business.

And that, I think, is the crux of the matter. I have a problem with private organizations being able to take punitive measures against companies and individuals without hard evidence, or for that matter without any real due process. In effect, this gives them the power of a private police force. So what happens when they screw up your business for a few days and find out that, gee, their disgruntled-employee "informant" was lying and the target is in full compliance with the law. Do they reimburse you for all the lost productivity? Ask your forgiveness? Buy you a chocolate sundae? What?

Corporate vigilantism, I guess you could call it. If it's not already illegal it most certainly should be.