eChannel 10th June 2007

Daring raids, individuals arrested and equipment taken away for analysis. The plot for yet another blockbuster crime movie, right? Wrong. Merely another dramatic week in the life of Microsoft’s swashbuckling anti-piracy team.

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By  Andrew Seymour Published  June 7, 2007

Editorial Leader|~||~||~|

Pirates Of The Middle East

Daring raids, individuals arrested and equipment taken away for analysis. The plot for yet another blockbuster crime movie, right? Wrong. Merely another dramatic week in the life of Microsoft’s swashbuckling anti-piracy software team. Software piracy. The scourge of software vendors the industry over and a menace that, if we are to believe what the authorities tell us, is increasingly a front to fund more sinister activities. Let’s refrain from getting too bogged down by the altruistic perspective that surrounds this delicate topic though. The real reason software vendors want to stamp out the illicit activity taking place on their doorstep is because it means one thing: lost revenue. Every time a reseller buys, copies and distributes a piece of illegal software it hits the vendor right where it hurts the most. In the pocket. A study published two years ago by the Business Software Alliance and IDC revealed that for every US$2 of software purchased legally in the Middle East, US$1 was obtained illegally. Piracy rates in Bahrain, Oman, Jordan, Qatar and Kuwait remain above the 60% mark, and in Syria and Yemen it is reported to be even higher. Clearly we are talking about an issue of epic proportions. There are few vendors that take a kicking from the software pirates as regularly as Microsoft. In fact, I’d hazard a guess that the market for pirated Microsoft software in this region alone is larger than the genuine market of most other software developers operating in the Middle East. Microsoft is more than capable of looking after itself, but I’ve detected a sea change in the way it is clamping down on piracy these last few months. Its actions in the UAE since the turn of the year have revealed an aggressive side that hasn’t really surfaced before. Sure, the old Microsoft tactics are still evident — banging on about the Windows Genuine Advantage programme and instructing users that buying illegal software can result in all sorts of terrible things happening to their computer — but they are now accompanied by a more forceful approach when it comes to dealing with illicit channel behaviour. Royal Focus Trading and Sun Rose Computer are two Dubai resellers that can vouch for the fact that Microsoft Gulf has finally grown some teeth. Both traders were recently busted for dabbling in pirated software, but more significantly they became the first offenders to be publicly ‘named and shamed’ for their misdemeanors. Microsoft has been at it again this week, knocking down the doors of suspected piracy perpetrators with the help of the Business Software Alliance and local authorities. I’m sure the image of Microsoft executives donning fake beards and trench coats to go under cover in attempt to catch the culprits red-handed is not the way these things are done, but clearly its methods are paying off. Raids on resellers in Abu Dhabi and Dubai resulted in several people coming face to face with the long arm of the law, while more than 200 CDs containing pirated software were seized. I’m certain that when the time is right, the new ‘take no prisoners’ Microsoft will have little hesitation in disclosing the identity of the latest parties guilty of breaching its intellectual property rights. As one Microsoft employee recently confirmed, the policy of “naming them and nailing them” is quickly becoming a key part of its strategy. There is an argument from some quarters that Microsoft should handle software piracy more discreetly. Matters like these can always be resolved privately and without the need for offenders to be chastised in public. This is a region, after all, where perpetrators of other felonies are rarely identified beyond their initials. I strongly disagree with that viewpoint. As far as I am concerned, this tougher stance being adopted by Microsoft sends out a powerful statement that resellers looking to breach IPR laws will not be dealt with lightly. For far too long, Microsoft — and a number of other software vendors for that matter — have pussyfooted around when it comes to being forceful and making examples of guilty parties. They can talk about the virtues of genuine software and intellectual property rights until they are blue in the face, but it means absolutely nothing to a reseller with a CD burner in one hand and a copy of Windows XP in the other. Sure, there is a possibility that this ‘name and shame’ ritual won’t have any impact at all, but in my opinion it can only serve to act as a more powerful deterrent at channel level than simply putting up anti-piracy posters or sweet-talking dealers into changing their ways. Whether this refreshing approach helps to protect Microsoft’s bulging bank balance is irrelevant. What matters here is that it gives some assurance — at last — to those resellers who are playing by the book. Because every piece of software sold illegally potentially denies the authorised channel a sale. Let’s imagine the 200 disks Microsoft confiscated last week were going to be sold on for US$20 each, earning the pirates US$4,000. Not a bad day’s work. The chances are, 90% of those CDs would have ended up in the hands of buyers specifically seeking a cheap, pirated CD and with no aspirations of ever buying the genuine article. Technically speaking, those buyers wouldn’t eat into the authorised resellers’ pie because they have zero intention of purchasing from official channels anyway. But what about the other 10%? Not only are they likely to have been duped into buying pirated software, but they would probably be content to shell out for the genuine version if only they were more educated on the advantages of buying legitimate software. Now, let’s assume that 10% could be converted to buying legitimate software from an authorised reseller — XP Professional edition with service pack two, which typically retails at US$270, for example. Sell 20 of those and you’d rack up sales of US$5,400. Multiply that several times over and you can see why many lawful software resellers will be supporting Microsoft’s no-nonsense approach. Software piracy may have reached epidemic levels in this region, but that doesn’t mean the resellers who invest in building a legitimate software practice and understand the merits of playing by the rules shouldn’t be protected. And if that means Microsoft knocking on a few more doors and exposing those who threaten this then it should be welcomed.||**||

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