Piracy costs software industry $51 billion in '09

The software industry missed out on more than $51 billion in profits last year as a result of software piracy, says a new study released Tuesday by IDC and the Business Software Alliance (BSA).

The seventh Annual BSA and IDC Global Software Piracy Study found that the rate of software piracy rose by 2 percentage points last year to hit 43 percent. This means that for every $100 of legal software sold last year, another $75 worth of unlicensed software hit the market and reached the hands of consumers.

The increase in piracy over 2008 was due largely to higher PC shipments and sales, especially in emerging markets such as Brazil, India, and China, reported the study. One of the biggest markets for pirated software, China, saw the value of illegal software jump to $7.6 billion last year, $900 million more than in 2008.

Top 10 highest and lowest software piracy rates in 2009

(Credit: Business Software Alliance)

In an ironic positive twist during last year's recession, software piracy actually fell in 54 of the 111 economies covered in the report and grew in only 19. In the United States, the rate of software piracy stayed the same at 20 percent, the lowest in the world. But in light of the nation's huge PC market, pirated software in the U.S. cost the industry $8.4 billion in profits.

Top 10 economies with highest commercial value of pirated software in 2009

(Credit: Business Software Alliance)

"Given the economy, 2009 piracy rates are better than we expected," BSA President and CEO Robert Holleyman said in a statement. "But incremental improvements are not enough. Few if any industries could withstand the theft of $51 billion worth of their products."

IDC and the BSA believe software piracy doesn't just take profits away from the industry but also has a domino effect on the economy. One statistic cited in the study reported that for every dollar of legal software sold, another $3 to $4 in sales are generated for local businesses.

"Software theft hurts not just software companies and the IT sector, but also the broader economy at the local, regional, and global levels by cutting out service and distribution firms," John Gantz, chief research officer at IDC, said in a statement. "Lowering software piracy by just 10 percentage points during the next four years would create nearly 500,000 new jobs and pump $140 billion into ailing economies."

Additionally, IDC and the BSA point out that software vendors are hurt by illegal software, businesses and consumers waste time and money dealing with buggy or unsupported applications, and users can face security hazards as well as legal risks running pirated products.

To combat software piracy, the study recommends several measures, some of which have already been initiated.

• Software makers should provide governments with low-cost software in bulk as a way of replacing illegal software.
• The industry should continue to work with manufacturers to preload software onto PCs before they ship.
• Software companies should offer extra value and services to users of legal software and restrict those from people who use unlicensed products.

To generate the report, IDC said it looked at 182 different sets of data from 111 individual economies. The study covered all commercial software that runs on desktop PCs, laptops, ultra-portables, and Netbooks, including operating systems and applications.

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Microsoft unveils Office 2010

Stephen Elop, Microsoft Business Division president, unveils Office 2010 in New York City on Wednesday, offering a glimpse at some of the functionality the updated software suite has to offer.

(Credit: Marguerite Reardon/CNET)

NEW YORK--Microsoft is going after the corporate customer with its new Office 2010. But the company is also giving some goodies away for free to consumers and mobile users, who will gain a new level of access to its Office and Sharepoint products.

Microsoft officially launched the new Office 2010 and Sharepoint 2010 products to its corporate customers at an event here Wednesday. The latest update to the software adds new features to the desktop applications like Word, Excel, Outlook, and PowerPoint.

In addition to the corporate version of the product, Microsoft has also added a free Internet version of the apps that Microsoft is calling Office Web. And it is introducing mobile access to the new suite of Microsoft Office products.

The free Web version of the software will allow consumers, students, and corporate customers trying to access these applications from a home computer to access the programs and files from anywhere using a Web browser and an Internet connection. This new free version of software will be available starting June 15.

Microsoft is also bringing the enhanced software suite to mobile phones. For its own, Windows Mobile phones, Microsoft has developed a mobile application, which can be downloaded onto any Windows Mobile 6.5 starting Wednesday. Another version of the app will be available forWindows Phone 7 when that is available later this year.

Wireless users who own Nokia devices will also be able to download special mobile applications for access to the Office Web 2010 suite. Microsoft and Nokia struck a deal to integrate Microsoft software into its phones last year.

For people who don't have a Windows Mobile phone or a Nokia phone, Microsoft has made these applications available via a mobile Web browser, giving any wireless user whether they are using a smartphone, like an Apple iPhone, or a basic feature phone, the opportunity to access some of the Office 2010 functionality.

The new version of Office 2010 is all about keeping people connected and allowing them to collaborate. Some of the new features the company showed off during a demonstration highlighted this. For example during the keynote, Chris Capossela, senior vice president of Microsoft's Information Worker Product Management Group, showed how photos and video can be edited within Word and PowerPoint. He also showed how PowerPoint slides can be broadcast and people using the Web and mobile version of the application can view the slideshow anywhere they can get access to the Internet.

Microsoft's move to put some Office functionality into the "cloud" and offer it to consumers for free is a clear nod to competitor Google, which has been offering things like Google Docs for free for years. But unlike Google, Microsoft isn't looking to make money by selling advertising to consumers.

Instead Microsoft hopes that the Web version of these products will give consumers enough of a taste of the applications to persuade them to actually buy the software. The Web version of the products don't offer the full functionality of the client-based software. For example, Capossela said during an interview that video can't be edited in the Web version of Power Point. The browser simply doesn't allow it.

"You can use the Web version of office to do basic things like share documents and edit them," said Capossela. "But if you're a student, you're still probably going to want the rich client version to write a paper. You wouldn't want to do all of that in the browser."

Capossela said that he believes that if consumers are given a taste of some of the new functionality in Office 2010, they will want the full version.

"People will definitely pay for value," he said. "The free version is a great thing to have available when you want to work on a document from home or you want to share it with someone."

As for the mobile version of the product, Capossela said that Microsoft wanted to make sure that customers could access their documents, spreadsheets, and Power Point presentations from anywhere. So it was important to make the software accessible by any mobile phone. But he admitted that Microsoft has made the apps for its own Windows Mobile platform more robust than the Web-browser version available on handsets using other mobile operating systems.

"The approach we've taken with phones is to build rich client applications for Windows phones," Capossela said. "When you're running PowerPoint on a Windows Mobile phone or a Nokia phone, you're getting a richer experience than if you're using a BlackBerry or some other type of device."

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iPhone 4G packs potent chip

If reports are accurate, the iPhone 4G would use a version of the A4 processor--a chip that Apple initially adopted for the iPad.

(Credit: Apple)

A prototype iPhone 4G is powered by an Apple processor similar to the one found in the iPad, according to published reports Wednesday.

iFixit said Wednesday that the iPhone 4G prototype torn down on a Vietnamese Web site uses a chip that has markings similar to the iPad's A4 processor.

"(Wednesday's) photos from Vietnam of a leaked iPhone 4G prototype contain legible part numbers revealing (the) new iPhone's processor: the Apple A4," iFixit said.

If an Apple A4-class chip actually makes it into the final version of the iPhone 4G, consumers would likely see another appreciable jump in performance. The A4 chip was custom-designed by Apple "to be extremely powerful yet extremely power efficient," according to an Apple description of the chip on its iPad page.

Needless to say, the iPad has a much larger screen (1024-by-768) than the iPhone (480-by-320) and uses the added horsepower of the A4 to, among other things, push around the extra pixels on its larger screen. Whether the iPhone 4G would use the same processor or a slightly tamer version because of its size constraints, remains to be seen.

And as a quick refresher, by definition, the A4 is a system-on-a-chip, or SOC, that integrates the main processor, graphics silicon, and other functions like the memory controller on one piece of silicon--in this respect, not unlike other ARM SOCs from companies like Texas Instruments, Qualcomm, and Marvell.

The A4's central processing unit (CPU) is thought to be based on a design by Intrinsity--a company Apple recently acquired--and manufactured by Samsung. Analysts have speculated that Apple may have also enhanced the A4's capabilities by modifying functions such as the 3D graphics engine. Along these lines, last year, Apple hired former chief technology officer Bob Drebin of the Graphics Products Group at Advanced Micro Devices, who is now listed as a senior director at Apple.

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