Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Firms Seen Ignorant of Software Piracy Risks

MTA street vendor selling a range of pirated software on a street in Moscow.
Russian companies' widespread use of pirated computer software may be partly because of ignorance about the costs and risks involved, according to a survey released Wednesday.

More than 80 percent of commercial enterprises across the country continue to use unlicensed or pirated software, according to the survey, which was commissioned by Microsoft and conducted by IDC, a global provider of market intelligence.

"Many company directors still think procuring software legally is not cost effective and inevitably involves extra expenses like training of IT managers or paying for software upgrades," said Leonid Klyaiman, Microsoft's product manager in Russia.

"Such ignorance has encouraged a preference for unlicensed software in many companies."

The survey polled company directors and IT managers in 500 companies across five federal districts to determine how company executives perceive risks associated with using unlicensed software.

Violation of intellectual property rights has long been a sore point in Russia's relations with the United States, which has pressed hard for a crackdown on piracy as a condition for the country's WTO accession.

"Official concerns have forced law enforcement agencies to intensify efforts to bring violators to book," said Konstantin Zemchenkov, director of the Russian Anti-Piracy Organization.

In May, a Perm region court found school director Alexander Ponosov guilty of installing pirated Microsoft software onto his school's computers and fined him 5,000 rubles ($200). The case attracted both widespread publicity and media sympathy for Ponosov.

Sergei Alpatov, Microsoft's head of software promotion in Russia, said Wednesday that the company was now offering an 80 percent discount for operating systems installed in schools.

"This is a huge relief for school budgets, especially in remote areas," Alpatov said. "Cases like that [of Ponosov] will soon be a thing of the past as prices come within the reach of schools' budgets."

Timur Faroukshin, consulting manager for IDC in Moscow, said the cases of people being prosecuted over software piracy had raised awareness of the legal consequences to 80 percent, from a mere 25 percent four years ago.

"But company executives worry more about loss of face or reputation than the legal consequences or technical glitches that pirated software could cause," Faroukshin said.

Software crashes and other technical glitches could cost a company up to an estimated $35,000 per year, several times the cost of acquiring licensed software, he said.

Eighty percent of company executives polled said they believed there was a high likelihood of prosecution from using pirated software, but less than 20 percent said pirated programs could cause computer glitches.

All the companies surveyed used a combination of licensed software as well as bootlegged versions of Microsoft Windows and Office programs, with the latter often dominating, the report said.

Zemchenkov said, however, that the use of licensed software had increased in the past two years -- in part because licensed software producers have greatly reduced their prices.

"The sale of licensed DVDs has increased to 51 million from 24 million two years ago, and will probably double again next year," Zemchenkov said.