BSA | The Software Alliance recently released its 2018 Global Software Survey and I thought it would be useful to review some of the findings and their implications for software vendors and end user organizations.
The commercial value of unlicensed software globally is $46.3 billion, and 37% of software installed on personal computers is unlicensed.
While these numbers are down slightly from the 2016 Global Software Survey, they underscore the fact that the use of unlicensed software is still widespread and carries a significant economic impact for both software vendors and their customers.
The commercial value of unlicensed software in North America and Western Europe alone is $19 billion.
The interesting takeaway here is that this number represents 41% of the global number despite these regions having lower than average piracy rates (16% and 26% respectively). On its face this might seem troubling, but it is actually good news for software vendors looking to generate revenue from the use of unlicensed software using solutions like our Flexera Compliance Intelligence. Not only do these regions have strong IP protection, our customers see high rates of converting unlicensed use through an inside sales approach that seeks to make infringers long term customers instead of treating them punitively.
Flexera’s list of the Top 20 Countries reporting unlicensed use through Compliance Intelligence product underscores the opportunity for vendors to generate new license revenue.
Unlike the BSA numbers which are based on surveying methodologies, Flexera’s numbers are derived from the actual use of unlicensed software as detected and reported by customers’ deployment of Compliance Intelligence. The commercial value of unlicensed software in North American and Western European countries represented in our Top 20 Countries list is $16.6 billion (see the infographic below). Our customers are getting a high volume of actionable intelligence on infringers in regions with significant revenue generation opportunities and are converting them to paying customers. In fact, our customers have generated more than $2.1 billion in new license revenue since 2010 with the help of Compliance Intelligence.
“Organizations now face a one-in-three chance of encountering malware when they obtain or install an unlicensed software package.”
The BSA Study notes that a malware attack takes an average of 243 days to detect and costs an average of $2.4 million and up to 50 days to resolve. It is not surprising that “avoiding the security threats from malware is now the number one reason CIOs cite for ensuring the software on their network is fully licensed.” As a result, “improving software compliance is now an economic enable and security imperative.” Now more than ever, there is even more reason for organizations to be more receptive when a software vendor contacts them about unlicensed software. In fact, it creates an opportunity for vendors to strengthen relationships with customers (and prospective customers) by alerting them to the presence of unlicensed software on their networks and helping them address the risk of malware to reduce its impact and cost.
“Organizations taking proactive steps are finding that a 20 percent increase in software compliance can improve a company’s profits by 11 percent.”
We have long been a proponent of being proactive to address software piracy and license misuse, and to view it not only as a new license revenue opportunity, but an opportunity to create long term customer value. Look at the piracy adoption trends in the infographic below and you will see that there are consistently high rates of unlicensed software use in the Fortune 100, top universities, manufacturing firms, and even software vendors themselves. At first blush, you would not suspect that leading organizations like these would be using unlicensed software. But as both the BSA Study and our Compliance Intelligence data show, the use of unlicensed software is widespread and there is increased ability, opportunity, and incentive to “take meaningful steps… to improve software management and achieve important gains.”
We’d love to hear your thoughts and perspectives on the latest BSA Study and Flexera’s 2018 Software Piracy Statistics – please share them in the comments below.