The Canadian Alliance Against Software Theft (CAAST) and the Business Software Alliance (BSA) today announced the findings of a global software piracy study that reveals Canada's software piracy rate decreased three percentage points from 36 per cent to 33 per cent in 2005, falling below the worldwide piracy rate which remained stable at 35 per cent. Losses to the Canadian economy due to software piracy were CDN $943 million, down CDN $166 million from 2004. Canada is also among the top 20 countries with the lowest software piracy rates worldwide.


The independent study, conducted by global market research and forecasting firm IDC and released by CAAST and BSA, shows some improvements in a number of markets that indicate anti-piracy education, enforcement and policy efforts are beginning to pay off in emerging economies such as China, Russia and India and in Central/Eastern Europe and the Middle East & Africa. However, losses from software piracy worldwide amounted to CDN $41 billion in 2005, an increase of CDN $752 million over the previous year.


"It's encouraging to see progress being made in reducing Canada's software piracy rate and how it is approaching the rates found in countries such as the U.K., Germany and Australia," said Jacquie Famulak, president of CAAST. "However, more than one out of every three copies of PC software put into use in Canada in 2005 was still obtained illegally. This continues to have an impact on our economy and local software vendors, suppliers and channel partners in the wholesale-to-retail distribution chain are among the most deeply affected. This year's study shows that software piracy can indeed be lowered, but also that more work needs to be done."


Piracy rates decreased moderately in more than half (51) of the 97 countries included in this year's study, and increased in only 19. The global rate was unchanged from 2004 to 2005 as large developed markets like the United States, Western Europe, Japan and a handful of Asian countries continue to dominate the software market while their combined piracy rate hardly moved. Some positive changes were seen in rapidly developing countries such as Russia, which saw a four point drop in its PC software piracy rate while India's piracy rate declined two points. China, with one of the fastest growing IT markets in the world, dropped four points between 2004 and 2005.


Other key findings from the study include:


- The four countries with the largest percentage point drop in their


piracy rate during the past year were China (4 points), Russia


(4 points), Ukraine (6 points) and Morocco (4 points).


- Software piracy rates in 19 of 26 countries in the Middle East and


Africa declined, with 12 countries dropping two or more percentage


points.


- In Central/Eastern Europe, the piracy rate declined in 15 of the


18 countries included in this year's study.


- The countries with the highest piracy rates were Vietnam (90 percent),


Zimbabwe (90 percent), Indonesia (87 percent), China (86 percent) and


Pakistan (86 percent).


- The countries with the lowest piracy rates were the United States


(21 percent), New Zealand (23 percent), Austria (26 percent) and


Finland (26 percent).


In countries with very large software markets, comparatively low piracy rates can amount to huge losses. While the United States had the lowest piracy rate of all countries studied at 21 percent, it also had the greatest individual losses - CDN $8.3 billion. China saw the second highest losses at CDN $4.7 billion with a piracy rate of 86 percent, followed by France with losses of CDN $3.8 billion and a piracy rate of 47 percent.


"Many factors contribute to regional differences in piracy - the strength of intellectual property protection, the availability of pirated software, cultural differences and IT-related market trends," said John Gantz, chief research officer at IDC. "Canada's lowered piracy rate, as with other countries, can be attributed to high PC market growth, continued enforcement and a major increase in branded laptops replacing desktops made by local assemblers."


"Stronger intellectual property protection and education and awareness are absolutely critical to stem the growth of piracy around the world," said BSA president and CEO Robert Holleyman. "As broadband growth continues and the IT sector expands, the influx of new users and the increased availability of pirated software means continual efforts are required to reduce and keep software piracy down."


A previous CAAST/BSA-IDC study showed that if the global piracy rate were to drop 10 points to 25%, it would create as many as 2.4 million new jobs, CDN $465 billion in economic growth, and CDN $77 billion in tax revenues worldwide. In Canada, a 10 percentage point reduction in software piracy over a four year period could yield CDN $8.1 billion in economic growth, CDN $2.3 million in tax revenues and 14,000 new jobs.


Methodology


The CAAST/BSA-IDC Global Software Piracy Study covers all packaged software that runs on PCs, with the exception of other types of software such as that which runs on mainframes, servers or software sold as a service. IDC used proprietary statistics for software and hardware shipments, conducted 5,600 surveys and enlisted IDC analysts in 38 countries to confirm software piracy trends.


For more details or for a copy of the study, please visit www.caast.org.


About CAAST and BSA


Established in 1990, The Canadian Alliance Against Software Theft (CAAST) is an industry alliance of software manufacturers who share the common goal of reducing software piracy. CAAST provides educational information to corporations, consumers, academic institutions and resellers about software theft and its implications. CAAST is affiliated with the Business Software Alliance (www.bsa.org), the foremost organization dedicated to promoting a safe and legal digital world. BSA is the voice of the world's commercial software industry and its hardware partners before governments and in the international marketplace. BSA programs foster technology innovation through education and policy initiatives that promote copyright protection, cyber security, trade and e-commerce.


CAAST Member Companies include Adobe Systems, Apple, Autodesk, Avid, Bentley Systems, Borland, CNC Software/Mastercam, Internet Security Systems, Microsoft, McAfee, PTC, SolidWorks, Sybase, Symantec, The MathWorks, and UGS.


Company names herein may be trademarks of their respective owners.


About IDC


IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.


For further information: Melita Vega, (416) 413-4743, melita.vega@hillandknowlton.ca; Amy Diniz, (416) 413-4696, amy.diniz@hillandknowlton.ca