The high price of piracy

Cutting software piracy can boost economies and create jobs.
Countries in Western Europe could create a million jobs and boost the value of their technology sectors by £250 billion if they cut piracy rates by ten points by 2006, claims a study.
The research, carried out for the BSA anti-piracy group, revealed that piracy is stunting the growth of software firms worldwide.
The BSA (Business Software Alliance) estimates that almost 40% of all software being used around the world is pirated.

Hidden cost
The research looked at the effects of piracy in countries that together account for 98% of the world's technology economy.
The study was drawn up by analyst firm IDC and found that countries enforcing anti-piracy laws tend to have larger and more creative technology sectors.
"Strong intellectual property protections spur creativity, which opens new opportunities for businesses, governments and workers," said Beth Scott, European vice-president of the BSA.
Countries could boost the size of their software sectors by doing a better job of stopping people making counterfeit copies of commercial software and catching pirates, said the report.
The report put a value on Britain's technology sector, which includes software and hardware makers as well as associated services, of £37.5bn but said this could grow to £54.4bn by 2007 if piracy rates were slashed to 15% from their currently 25% rate.
The growth of the technology industry would contribute £10bn to the growth of the UK economy as a whole, add £2.5bn to tax revenues and create up to 40,000 jobs.
France's tech sector could grow by 50% in four years if it too managed to cut ten points off its current 46% rate of piracy.
Cutting piracy by ten points globally could add 1% to world economic growth.
The report authors said such cuts in piracy were feasible because almost two-thirds of the 57 countries covered in the study had already managed to reduce piracy by ten points since 1996.

I’m confident, the rate of software piracy is rising around the world. The increase in piracy is due largely to higher PC shipments and sales, especially in emerging markets such as Brazil, India, and China is one of the biggest markets for pirated software. I believe software piracy doesn't just take profits away from the industry but also has a potential effect on the economy. In fact, piracy means lost revenue, Obviously, Software theft hurts not just software companies, but also the broader economy at the local, regional, and also global levels by cutting out service and distribution firms. I think in order to prevent piracy Software companies should offer extra value and services to users of legal software and restrict those from people who use unlicensed products.

Piracy problems stain Windows XP

Microsoft's plans to stop people pirating the next version of Windows have suffered a setback. A German computer magazine has found weaknesses in the piracy protection system built into Windows XP.
The weaknesses could mean that in up to 90% of cases users can circumvent the copy protection system. But Microsoft said that the protection system would be much stronger and harder to defeat when the final version of XP is released later this year.

Component count
In a bid to combat piracy Microsoft is introducing a product activation system into the XP versions of its software. Activating a product involves contacting Microsoft for an identification number that is then combined with the serial numbers of the components inside your computer to create a unique identifier.
Big changes to the hardware in a machine could mean that users have to contact Microsoft for a new identification number to re-activate their software.
By tying software to individual machines Microsoft hopes to stop its products being run on more machines than they are licensed for.
But now German computer magazine Tec Channel has analysed the product activation system that is being used in the test, or beta, versions of Windows XP and found that, in many cases, it can be compromised by making simple changes.

File fiddling
When Windows XP is first installed and activated it generates a file called wpa.dbl that stores information about the configuration of your machine.
Changes to any one of the ten components or serial numbers that this file watches are logged. When three changes have been made the wpa.dbl file is deleted forcing the user to contact Microsoft to reactivate the software.
But Mike Hartmann, a journalist at Tec Channel, has found that the ability of the wpa file to spot piracy can be easily compromised.
In tests Mr Hartmann installed and activated XP, then saved a version of the wpa file that was generated. He then changed components on the test machine so XP had to be re-activated. However, copying the old version of the wpa file back in the Windows system directory stopped requests for reactivation.

Piracy problems
The activation was also compromised when XP was fooled into thinking that a desktop PC was a laptop in a docking station, rather than a self-contained machine. In this configuration some components that wpa watches would be in the docking station rather than the portable computer. XP dutifully ignored any changes made to these components.
In total Mr Hartmann found a way to make the Windows XP activation technology ignore six of the ten components that it monitors. Mr Hartmann said another two can vary in only a small number of ways among all machines making it possible to create a "universal" wpa file that should activate XP on most PCs.
"With some smart tools that do automatic matching of hardware and activation-files it would be possible to 'activate' nearly 90 percent of home-user machines without Microsoft knowing anything about it," Mr Hartmann told BBC News Online.
Mr Hartmann expects to see activation file sites springing up on the web that offer wpa files tied to PCs with particular configurations thus ruining Microsoft's chances of cutting piracy.
"Should Microsoft stick with current version of wpa they will have wasted lots of money for call-center-employees, webservers and the technology itself," he said.
But a spokeswoman for Microsoft said that the version of the activation system that is in the pre-release versions of Windows XP is weaker than that which will ship with the finished version.
"The things that have been highlighted as a way of potentially bypassing activation will not be in the final code," said the spokeswoman. "The final code is going to be very different to what we have now."
"Product activation is not completely fixed in place at this time," she added

http://news.bbc.co.uk/2/hi/science/nature/1448869.stm

Companies are always wanted to find new ways to prevent piracy. Microsoft is one of these companies, this time by introducing XP version is trying to overcome previous defect which was security problem. This new version has this security system; Activating a product involves contacting Microsoft for an identification number that is then combined with the serial numbers of the components inside your computer to create a unique identifier. Also this security system is so strong and unreachable for hackers but still there is some problem for XP activation the problem can be seen in the uploaded video the thing is 'activate' nearly 90 percent of home-user machines without Microsoft knowing anything about it," Mr Hartmann told BBC News Online.

Software piracy on the wane

According to figures collected by the Business Software Alliance, global piracy rates declined last year to 39%. But the lost revenue this represents to firms making the software being pirated rose 19% to more than $13bn.
The UK bucked global trends as its businesses used slightly more pirated software than in previous years.

Stealing software
North America and Western Europe have the lowest global piracy rates. Only 24% of business software in the US is pirated compared to 35% in Europe. But for the first time in seven years the number of UK firms using pirated software has risen.
Figures gathered by anti-piracy group the Business Software Alliance show that 26% of the software used in the UK companies is pirated. Last year the figure was 25%.

GLOBAL PIRACY RATES
The BSA put the rise down to companies trying to cut costs as the hi-tech slowdown bites.
"There may possibly be an issue with the current economic recession with some people under-licencing to make precious IT budgets go further," said Richard Saunders, former chairman of the BSA.
He said that the growth of broadband net access was also making it easier to download stolen software. The rise in the UK is set against a broader background of falling piracy rates around the world. The Middle East/Africa has shown the most significant reduction in the amount of pirated software.
In 1994 when the BSA began measuring piracy rates, eight out of every 10 business software packages in Middle Eastern and African nations were pirated. Now the rate is 49%.
This region is also home to the nation showing the greatest fall in piracy rates. The United Arab Emirates has trimmed piracy to only 36% in 2002 from 86% in 1994.

Ups and downs
Scandals like Enron might make firms wary of breaking the law
According to the BSA figures, the second most improved region was Latin America which saw its piracy rates drop 23 points to 55% between 1994 and 2002.
In Latin America, Guatemala seems to be doing the best job of combating piracy as it saw a 33 point drop in piracy over the last seven years to 61%.
The amount of business software pirated in Asian and Pacific Rim nations is dropping too with some countries, such as Japan, recording a huge drop, 66 points, in piracy rates.
But some nations in the region, such as China and Vietnam, remain black spots with piracy rates in excess of 92%.