BSA Study Demonstrates Open Source's Economic Advantage

jeremy · 05-29-2013, 01:48 PM

Quote:

I love the spring. Not, of course, because of the glorious weather, since we don't have any. But because it's time for the annual BSA report on piracy, which is guaranteed to provide me with hours of innocent fun as I go through finding its methodological errors and dodgy data.

Long-suffering readers of this column may recall my previous discussions of these reports and their egregious flaws. For example, back in 2010, I pointed out that the BSA's claim that reducing PC piracy by 10% would create $142 billion in new economic activity was nonsense - the money saved by piracy does not simply disappear, but is spent elsewhere. In 2011, I noted that the BSA used the misleading phrase “commercial value of software piracy”, something repeated in 2012, when the BSA spoke of the “commercial value of this shadow market of pirated software” as if that had any relevance to what was happening on the ground.

So, with a certain excitement I began reading this year's report, intriguingly entitled “Competitive Advantage: The Economic Impact of Properly Licensed Software”. Here's the summary:

properly licensed software has a positive impact on national economic activity that is more than three times the impact of pirated software, according to a new study from BSA | The Software Alliance. And the additional economic value associated with lawful software use is especially pronounced in developing markets: Every dollar invested in properly licensed software in low-income countries yields an astounding $437 in additional national production, on average.

Well, yes, that is pretty astounding. Indeed, so astounding it clearly deserves closer scrutiny. Here's what seems to be the core reason that licensed software is preferable to pirated copies:

Fully licensed software, in particular, improves effectiveness and efficiencies in enterprises by reducing exposure to viruses and other security vulnerabilities, meaning fewer system malfunctions, downtime, and IT repair costs. This is because licensed software comes with value-added services that provide access to upgrades, patches, and manufacturer support such as training and problem resolution.

What's amusing is that this is something I noted in a reply to a comment on my 2011 article:

it could be argued that the widespread use of unauthorised copies is beneficial to the West, since companies in emerging economies must spend far more time dealing with viruses, Blue Screens of Death etc., all of which lowers their competitivity.

So, obviously, I'm delighted that the BSA is finally catching up with what I said two years ago. But how does this belated understanding lead to that “astounding $437” figure quoted above? It all comes down to mathematics - which is good news, since I have a couple of degrees in the subject lying around somewhere. Here's the basic idea:

More at Glyn Moody's Computerworld Blog

--jeremy