010 001 2960 [email protected]

South African companies caught using pirated software spent more than R5 million in 2012 in settlement and legal fees, according to the Business Software Alliance (BSA).  The BSA is a trade body that represents the interests of the software industry. The BSA works with companies using a process of self-auditing to conduct investigations into whether or not they are using pirated software, says Warren Weertman, manager – legal affairs for Europe, Middle East and Africa (EMEA), BSA.

And the body says costs associated with these companies replacing unlicensed software jumped by R4.9 million last year – six times more than what was recorded in 2011.

South African law firm, Adams & Adams, helped the BSA in its investigation and the two organisations found that companies operating in the engineering, graphics and advertising sectors as the top offenders.

The BSA reported that the cost of engineering companies using unlicensed software was estimated at over R1.5 million followed by the graphics and advertising industries at respectively just over R700, 000 and R650, 000.

The costs comprise of settlement and legal fees that have to be paid by the company found to be using pirated software.

Chairman of the BSA South African committee, Drummond Simpson, 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.”

“Not only does the use of unlicensed software 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,” he explained.

Mervin Miemoukanda research analyst for ICT at Frost & Sullivan told ITWeb Africa that unlicensed software accounts for 20% to 30% of the overall software market in South Africa, which makes the statistics from the BSA close to the reality.

“The number makes sense and it is mainly due to the sales of counterfeit PCs and mobile devices in the country,” he said.

He added, “These PCs and mobile devices are usually loaded with pirated software from Microsoft and other software vendors.”

Miemoukanda and the BSA agree that education is the key to ensuring that companies understand the far reaching implications of using pirated or unlicensed software.

“It is quite a huge task that government institutions and software companies should start educating students in universities and schools, in general the population to use licensed software,” he said.

“Yes, it’ll be very difficult to prevent people and small businesses from using unlicensed software, however education is key because as most people are not aware of adverse consequences of using unlicensed software,” he concluded.

According to the BSA across the EMEA region the use of pirated software cost businesses more than $16.5 million in 2012.