Software cos lose more than 10% revenue to piracy: study

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New Delhi, Dec 19 (UNI) Software firms lose more than 10 per cent of their total revenue to illegal and unlicensed software installations, a KPMG-International Business Software Manager's Association (IBSMA) study says.

The US audit, tax and advisory firm KPMG study suggests that 87 per cent of the executives claimed revenue loss due to unlicensed users.

In India, too, the picture is grim with 50 per cent of software being pirated.

Of those surveyed, 77 per cent agree with International Data Corporation (IDC) estimates that 35 per cent of software installed is unlicensed, leading to an estimated 34 billion dollar loss of revenue to the industry.

''Executives of software companies are struggling to find answers to combat unlicensed software use. Some firms are either not executing their compliance programs or need them to be analysed or overhauled,'' said KPMG India Executive Director Arpinder Singh.

Effective compliance programs help firms recoup revenue and maintain strong customer relationships, added Mr Singh.

The KPMG study says 64 per cent of software publishing executives indicated that their companies have a program designed to ensure customer compliance with software license agreements.

In fact, 20 per cent of the KPMG survey takers say that their compliance programs deliver over five per cent of their ongoing software revenue streams, and 30 per cent say they derive between 5-10 per cent of annual revenue. Seven per cent of respondents indicate that these programs actually contribute 10 per cent or more to the top line.

Mr Singh believes that in India too the picture is quite grim as almost 50 per cent of software is pirated.

''One of the major problems in India is the weak law enforcement and awareness. Though a number of companies have started software compliance programme but we still need to go a long way,'' Mr Singh said.

Several leading practices can be applied by software publishers to help recover lost revenues, strengthen software license controls, and improve business relationships with major institutional customers, he added.

KPMG surveyed 50 executives from software publishing companies collectively, representing almost 50 per cent of total industry revenue. Twenty eight per cent of respondents are employees of companies with a software revenue of five billion dollar or more.


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