The Business Software Alliance (BSA), the voice of the world's commercial software industry, has identified Texas as a national hotspot in terms of reports of illegal software use and is urging individuals across the state and in the Houston area specifically to report the use of pirated software by businesses to NoPiracy.com.
In conjunction with the online software piracy reporting network at NoPiracy.com, BSA also maintains the manned 1-888-NO PIRACY hotline. Individuals can confidentially offer information on unlicensed software use as well as register to claim rewards of up to $1 million. Since 2008, BSA has paid a total of $220,650 in rewards for verifiable tips of software piracy. Despite the rewards program, many opt not to take the reward, citing their motivation as simply "to do the right thing."
Reporting by the general public over the past nine months shows that the state of Texas is a top five hotspot for reports of illegal software use with a large portion coming from the Houston area. Dallas-Ft. Worth was a close second in terms of reports of software piracy, while the Austin and San Antonio regions were a distant third and fourth.
"This is the first time BSA has identified specific U.S. states as 'Software Piracy Hotspots,' although our records over the last years have shown that Houston has consistently been active in terms of illegal software reports," said Jenny Blank, Senior Director of Legal Affairs for BSA. "Our analysis of the trends suggests two things: First, given the number of leads from Southeastern and central Texas, people in the state are obviously quite concerned about this issue and don't like the idea of local companies using what amounts to stolen software products. Second, there are clearly a lot of companies in Texas who are not concerned that they are breaking the law and are willing to take the risks associated with that decision. For many companies, such blatant disregard for the law has proven costly."
Each year, BSA receives on average over 2,500 reports of software piracy from across the country. The majority of the reports come from current or former employees who had information related to the unlicensed software activity.
According to the Sixth Annual BSA-IDC Global Software Piracy Study, the retail value of unlicensed software installed in 2008 -- representing revenue losses to software companies -- was estimated at $9.1 billion in the United States and $53 billion worldwide.
The national average software piracy rate in 2008 was 20%, meaning that one in five pieces of PC software installed in the United States was unlicensed. Texas' rate however is also 20% according to the 2007 State Piracy Report released last year and also conducted by IDC. While in line with the national average, the rate is still dismally high given the cost of piracy to the economy.
Software piracy in Texas cost software vendors an estimated $627 million, which is the third-highest figure of the eight states included in the study. Lost revenues to a wider group of Texas software distributors and service providers cost an additional $1.7 billion, which is, for example, enough to hire more than 9,200 tech workers. The lost state and local tax revenues -- $223 million -- would also have been enough to fund the hiring of more than 4,000 experienced police officers. These are significant economic losses especially in light of the troubled economy.
Reducing piracy brings tangible economic benefits to the local IT industry and local communities. For every $1 of PC software licensed, there is another $3 to $4 of revenues for local service and distribution firms, as well as tax revenues to support local services, according to the BSA-IDC Global Software Piracy Study.
"Staggering economic losses like these clearly appear to resonate with many individuals in Texas who have decided to come forward and confidentially report instances of unlicensed software use in their organizations," said Blank.
Financial Risks
Businesses found to be using unlicensed software may be required to pay thousands of dollars in damages to BSA. A company found using unlicensed software and violating copyright laws could pay damages of up to $150,000 for each software title copied. If convicted, violators can be fined up to $250,000 per title or given a jail term of up to five years, or both.
When BSA receives a tip about a company using pirated software, it typically contacts the company and asks it to conduct an audit of its software assets. If unlicensed software is found, the next step is for both parties to work toward a resolution that involves immediate legalization of software.
Security Risks
Pirated software can also pose security risks to the users' networks and computers. Company computers can be infected with trojans, viruses, malware, and other threats, and this in turn can expose sensitive data and personal information of employees and customers. As companies and government agencies have found, having confidential information exposed to outsiders is costly and can put an organization's reputation at risk.
Tools & Resources to Ensure Compliance
BSA works with businesses to help ensure that their company isn't at risk of the financial, technical, and legal risks associated with illegal software. In addition to the educational and self-audit resources provided online at www.bsa.org, BSA has partnered with the U.S. Small Business Administration to educate up to 100,000 small businesses on software licenses, copyright laws, tips on how to purchase safe and legal software online, and how to develop an SAM program.