Software piracy costs businesses $114B: IDC

12 years ago

The use of counterfeit and pirated software in the workplace is costing enterprises more than $114 billion each year, according to a study conducted by analyst firm International data Corp. for software maker Microsoft.

Increased security threats, interferences with authorized software, system malfunctions, operation downtime, support and repair costs and drain in IT resources, are among the problems associated with the use of pirated and faked software, according to decision makers in some 973 business worldwide who were interviewed for the IDC study titled: The Dangerous World of Counterfeit and Pirated Software.

Part of the problem, according to Chris Tortorice, corporate counsel for anti-piracy with Microsoft Canada Inc., stems from the prevalence of end-user software installation in the workplace and personal mobile devices brought into the network with any proper security audits.

“Pirated and counterfeit software may be cheaper but they are of substandard quality and often laced with malware,” he said. “It’s very alarming to note that the IDC survey found 38 per cent of IT managers are aware employees install personal software on company computers and 57 per cent of workers admitted to engaging in this practice.”

Equally alarming is the fact that according to IT managers and CIOs, only 15 per cent of software installed by employees were problem free.

The IDC study found that expenses associated with counterfeit software risks went well beyond cleaning and fixing malware on end-user computers.

“They have the costs of replicating security problems – infected computers infecting others – perhaps bringing down the whole network, Web site or IT system,” IDC said.

The analyst firm noted that in a research for the Business Software Alliane it conducted in China in 20111 it found pirated software caused system-wide outages or slowdowns nearly once a month for the average sized organization. The cost per outage was estimated at $100,000.

The costs identified in the IDC study did not include fines and penalties from government or industry bodies and well as legal costs and lawsuit settlements.

Enterprise organizations are also failing to remedy the problem. For instance, only 10 per cent of IT managers and CIOs said they have disabled programs that provide automated software updates.

A full third of IT managers and CIOs said they don’t audit end-user PCs for user-installed software or do this audit only one a year.