Rand exchange rate fluctuations have somewhat exaggerated the value of software piracy in SA, but the overall trend appears to be steady to lower, says Alastair de Wet, chairman of the Business Software Alliance (BSA).
De Wet says software piracy costs the country around $284 million annually, which is about R2.8 billion, at current exchange rates. However, the one percentage point decline in the piracy rate over last year, as reported by research firm International Data Corporation (IDC), remains valid.
“We are somewhat encouraged by this as a lot of effort has been made to get South African companies compliant. Our trend is more or less in line with that of other countries, such as Russia, which has seen a 34% decline in the rate of software piracy,” he says.
Currency fluctuations, due to the world financial crisis, caused the rand to hit its worst level against the US dollar since 2001. On Thursday, the local unit saw its biggest one day fall since 1994. The rand was last seen trading at R10.15 to the dollar, a gain of 0.57% since the Thursday close.
According to IDC SA, last year, SA had a software piracy rate of 34% compared to the African average of over 80%, with the highest rate being Zimbabwe's 91%. A reduction in piracy of 10 percentage points over four years could generate R6 billion in additional revenue in the South African IT industry and as many as 1 210 extra IT sector jobs. In addition, the state would receive an extra R490 million in taxes, it says.
De Wet says the IDC software piracy reports have come in for some criticism, but they have been using the same criteria for five years at least and this makes annual comparisons easier.
“I know many people say that licensing only benefits the big American companies and that the money goes offshore anyway, but there is a whole eco-system that surrounds the industry of selling licensed software that is beneficial to the economy.”
He adds that companies that import and distribute licensed software do increase their employment of local staff as their revenues increase and the resellers who sell software often do the same.
“All those formally employed people do pay taxes, which is good for the country,” De Wet says.
The BSA has embarked on a programme of auditing companies to gauge their compliance with software licensing.
“Most companies do want to be complaint, and really it is not an easy thing to do. However, most vendors are happy to see that a company has a plan or strategy to do this and is working actively to become compliant.”
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