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Unlicensed software costs SA business over R5 million in 2012

March 1, 2013 • Opinion

Companies throughout South Africa continue to act negligently when it comes to software licensing.  This follows on the heels of the rising figures released by BSA | The Software Alliance which reveal that unlicensed software has cost South African business over R5.7 million ($675,595) in 2012.  Compared to 2011, this is a six-fold increase of R4.9 million as more companies are being caught using unlicensed software.  In fact, using pirated software has cost one offending business R265,142 ($31,294) in South Africa. This included damages paid to BSA member companies as well as the cost for acquiring legal software.

Drummond Simpson, Chairman of the BSA South Africa committee. (Image: BSA SA)

Across Europe, Middle East and Africa (EMEA) the use of pirated software cost businesses more than R140 million ($16,527,589) in 2012.

According to BSA, the world’s foremost anti-piracy organization, companies operating in the engineering, graphics and advertising sectors have been noted as the top offenders, making the most use of unlicensed software in South Africa.

The cost of engineering companies using unlicensed software is estimated at over R1.5 million followed by the graphics and advertising industries at just over R700,000 and almost R650,000 respectively. Across the EMEA region, Architectural/Design, Manufacturing and Engineering were the top offenders.

Drummond Simpson, Chairman of the BSA South Africa committee, said: “The results confirm that the use of unlicensed software continues to be a major challenge and many organisations are failing to capitalise on the benefits that a reduction in software piracy could bring.”

Simpson highlights that while the use of unlicensed software may not be intentional, the digital era is booming and in 2012, BSA settled with four times as many companies for using pirated software in comparison to 2011.

“We all need to make use of technology innovation and software advances, but education is the key to ensuring that companies understand that there are far reaching implications of using pirated or unlicensed software,” says Simpson.  “Not only does it affect the economy of the country but it also makes the company vulnerable to viruses and other security risks as well as financial and reputational damage if caught.”

Piracy hampers technology companies’ ability to innovate and create jobs, and in turn diminishes government revenues.

Reducing piracy by 10 points would create $142 B in new economic activity globally while adding nearly 500 000 new high-tech jobs and generating $32 B in new tax revenues for governments.

Staff Writer

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