V.i. Labs

Average Infringing Organization (SIIA)

52 percent of UK SMBs have bought or downloaded illegal software (BSA)

The BSA hired research company Vanson Bourne to survey IT decision makers from 250 UK SMBs:

• 52 percent of UK SMBs have bought or downloaded illegal software
• 41 percent of the SMBs that “admitted purchasing illegal software had reportedly fallen victim to identity theft or had their credit cards cloned (21 percent).”
• 88 percent of SMBs said the use of illegal software creates liability concerns
• 21 percent admitted using software key generators
• 27 percent paid for a legal software key and 10 percent uninstalled the software

Top 20 Software License Misuse and Piracy Hotspots (based on aggregated CodeArmor Intelligence data as of January 2013)

Ninth Annual BSA and IDC Global Software Piracy Study

• Commercial value of unlicensed software put into the market in 2011 totaled $63.4 billion while the global software piracy rate was unchanged at 42%
  
• Once again, the U.S. has the lowest piracy rate (down to 19%), but still has the highest commercial value of pirated software (losses of $9,773 million)
• 57% of the world’s personal computer users admit they pirate software
• Business decision makers who admit they frequently pirate software are more than twice as likely as other computer users to say they buy software for one computer but then install it on additional machines in their offices
• It is not uncommon for large companies to make hundreds or thousands of illegal copies
• Software is an essential tool of production: companies that dodge the capital cost of it gain an unfair competitive advantage over companies that pay for software

Top 20 Piracy Regions Based on Aggregated CodeArmor Intelligence Data (May 2012)

* Regions with an enforcement factor of 70 percent or higher. Learn more about the enforcement factor and your company’s revenue opportunity by using V.i. Labs’ Compliance Revenue Opportunity Calculator at: http://www.vilabs.com/uncover-your-compliance-revenue-opportunity

Source: CodeArmor Intelligence data from sample deployments (top geographies based on the number of unique machines running pirated software)

Top Piracy Regions By Application Type (May 2012)

Oil & Gas, Plant Design

EDA (PCB Design)

CAD/PLM

Source: CodeArmor Intelligence data from sample deployments (top geographies based on the number of unique machines running pirated software) and presented at the May 1 License Compliance Panel hosted by V.i. Labs

Microsoft: Manufacturing Companies in BRIC Countries Suffer Massive Competitive Disadvantage Due to Software Theft

• As part of a study to examine the broader economic impact of software piracy, analysts from Keystone Strategy evaluated the unfair competitive advantage enjoyed by companies that practice widespread piracy.
• In China, for example, manufacturers that “play fair” with legal, licensed software suffer a competitive disadvantage of about$837 million compared with companies that illegally slash costs and use pirated software.
• Russian manufacturers who play fair are disadvantaged more than $575 million over the five-year software lifespan.
• Piracy creates more than $2.9 billion of competitive disadvantage per year across manufacturers in Latin America, Central and Eastern Europe and Asia-Pacific regions.
• In specific countries, Keystone determined how much pirated software harms manufacturers playing by the rules as follows:Brazil ($186 million), Russia ($115 million), India ($505 million), and China ($837 million).
• Over a five-year software life cycle, manufacturing companies in BRIC countries will lose more than $8.2 billion to their cheating competitors.
• There are more than 4.1 million PCs legally licensed by manufacturing firms that play by the rules in China. The competitive disadvantage to these firms amounts to about $837 million annually, or $4.18 billion over the typical five-year software life cycle.
• Indian manufacturers experience $505 million per year in competitive harm. Their pirating competitors could use this money to hire more than 215,000 new employees.

FAST Research: 76 percent would not report their employer if they were using illegal software

• Over three quarters of UK office workers would turn a blind eye to malpractice in the office and fail to report it, according to the latest research from the Federation Against Software Theft
• Of this sample, 13 percent stated that they would not report illicit use to protect their jobs;
• 22 percent because they did not wish to be seen as a whistleblower and
• Amazingly, 46 percent simply did not care

Eighth Annual BSA and IDC Global Software Piracy Study

• Commercial value of unlicensed software put into the market in 2010 totaled $58.8 billion (up 13% from the year before andalmost double what it was compared to the first study in 2003)
  
• Once again, the U.S. has the lowest piracy rate (unchanged at 20%), but still has the highest commercial value of pirated software (losses of $9,515 million)
• Even with relatively low piracy rates, the size of the technology markets in North America and the European Union led to a combined $32.2 billion in unlicensed software in 2010 (55% of total losses)

SIIA Paid $57K in 2010 to Piracy Whistleblowers

• In 2010, the Software and Information Industry Association received 157 reports of alleged corporate end user software piracy
• Of the 157 reports, 42 (or 27%) were judged sufficiently reliable to pursue
• Of these 16 qualified for rewards totaling $57,500
• 75% of all reports come from IT staff or managers, 11% from the company’s senior management and 4% from outside consultants
• More than 59% of those reporting are no longer employed by the target company
• Most corporate cases pursued by SIIA represent relatively larger companies – the average number of employees is over 567 with average annual sales of nearly $441 million

Top 20 Geographies for Pirated Software Use (Jan 2011)

Source: CodeArmor Intelligence data from sample deployments (top geographies based on the number of unique machines running pirated software)

Microsoft Removing 800,000 Links Per Month

• Through an artificial intelligence system, Microsoft scans the Web for suspicious, popular links and then sends takedown requests to Web service providers, providing evidence of questionable activity.
• The counterfeiters, however, have automated systems that replace links that Microsoft deep-sixes. So the company has turned up the dial on its link-removal machine.
• “We used to remove 10,000 links a month,” Mr. [Peter] Anaman [of Microsoft] says. “Now, we’re removing 800,000 links a month.”

Seventh Annual BSA and IDC Global Software Piracy Study

• Commercial value of unlicensed software put into the market in 2009 totalled $51.4 billion
• Once again, the U.S. has the lowest piracy rate (20%), but still has the highest commercial value of pirated software (losses of $8,390 million)
• Even with relatively low piracy rates, the size of the technology markets in North America and Western Europe led to a combined $21 billion in unlicensed software in 2009 (41% of total losses)

SIIA Anti-Piracy Year on Review 2009

Most cases pursued by SIIA represent relatively larger companies – the average number of staff is over 1,721 with average annual sales of nearly $505 million

Share of Pirated Titles by Software Type

• Productivity (96%)
• Utilities (74%)
• CAD (71%)
• Development (67%)
• Document Management (45%)
• Creative (42%)
• Media Management (38%)
• Security (29%)
• Other (23%)
• Server (0%)

Microsoft: 1 in 8 Workers in the U.K. Use Pirated Software

• 57% believed their boss would consider the practice acceptable

Bill Gates Calls Out China On Software Piracy In Business

• “What’s unique to China is you have large businesses using software without paying for it. Super-profitable big businesses.Take two of the five most-profitable businesses in China: they don’t pay for their software.“

V.i. Labs Software Piracy Risk Assessment Report – September 2009

• File hosting services are a significant piracy distribution threat:100% of the pirated product releases surveyed were available on Rapidshare and 67% were available on two or more file hosting service providers.

V.i. Labs Software Piracy Risk Assessment Report – July 2009

• The top five piracy groups (out of 212) contributed 59% of the cracked releases in the research sample.

Top 10 US Industries With Highest Reports of Software Piracy in 2008 (BSA)

Sixth Annual BSA and IDC Global Software Piracy Study

• One-Fifth of PC software in United States is pirated
• Worldwide losses grew in 2008 by 11 percent to $53 billion

SIIA Anti-Piracy Year on Review 2008

• Most cases pursued by SIIA represent relatively larger companies – the average number of staff is over 804 with average annual sales of nearly $90 million

V.i. Labs’ Research Offers Insight to High-Value Software Applications and Piracy Activity (August 2008)

• V.i. Labs evaluated 17 leading EDA and PLM vendors, including Agilent, ANSYS, Autodesk, Cadence Design Systems, Synopsys, Dassault, The MathWorks, Mentor Graphics, National Instruments, PTC, Solidworks, and UGS/Siemens
• Discovered nearly 1,000 crack releases in the last three years alone, with 79 percent of those being PLM or CAD-related, and 21 percent being EDA-related
• The average time-to-crack for PLM vendors was 30 days(the point in time where the piracy group has produced a quality crack release of a vendor’s new software version)

PricewaterhouseCoopers 2007 Technology Licensing Marketplace Study

• Consensus estimates seriously miscalculate the impact of licensing revenue leakage
• Almost half of the companies surveyed (48 percent) do not have a plan for recovering lost licensing revenue
• Forty percent of technology licensors do not conduct any compliance audits

PricewaterhouseCoopers “Economic crime: People, culture and controls” (The 4th biennial Global Economic Crime Survey)

Of the 41% of IP infringement cases that involved a perpetrator located overseas, 44% of those involved a perpetrator from China.

UBS Investment Research: Could the Piracy Trade Winds Be Changing Course? (May 2006)

• Estimated average piracy rate for the large enterprise market in China is approximately 70%
• Estimated average piracy rate for the SMB market in China is approximately 90%