Software sinners

Viewed by software developers as an unrelenting affliction that eats into the revenues of authorised channels, the pervasiveness of piracy in the Middle East is, to put it bluntly, beyond farcical. Channel Middle East investigates whether the contemporary strategies used to thwart unscrupulous traders from making a mockery out of the region’s software industry will really make a difference.

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By  Andrew Seymour Published  August 1, 2007

There are two aspects to the software piracy story in the Middle East. Both are intrinsically linked and both depend on the other to prevail, but ultimately they are two very separate issues. The first involves end-users who knowingly purchase copied software or, more commonly, breach licensing agreements by installing software on more machines than they have paid for. The other - and the point with which this article is specifically concerned - centres on the replication and distribution of pirated software by IT dealers.

At the end of the day, copied software has to travel through a channel and that often tempts resellers into a world that software vendors urge them to resist. Latest figures from the Business Software Alliance (BSA) and IDC reveal the piracy rate in the Middle East and Africa reached 60% last year, almost twice the global average.

Some markets, such as the UAE, fall significantly below the 60% regional aggregate, while others, such as Egypt and Yemen, find themselves with plenty more work to do.

In Africa, where piracy rates in many countries exceed the 80% mark, the problem is clearly even more pronounced.

All software vendors will, at the very least, acknowledge that piracy is a burden on their activities, but for Microsoft it has virtually become a way of life. The ubiquity of its applications, coupled with the high level of demand its products command, pitches the Redmond-based goliath into a daily battle with resellers, traders and dealers trying to make a quick buck from producing or distributing copied versions of its software.

In the same vein as the majority of its industry counterparts, Microsoft's approach to addressing software piracy has largely been one of education and counseling.

Widespread campaigns enlightening channel partners on the benefits associated with using genuine software - and urging them to share these with their customers - have left resellers in little doubt that dealing in pirated software is strictly against the rules. But with more than US$2 billion in potential revenues disappearing from the Middle East and Africa market each year, the question of whether the message will ever sink in continues to be asked.

While those educational campaigns remain a vital tool in stressing the importance of using genuine software in the Middle East, there is a growing view that it will take a lot more than a few well-chosen words of advice to convince a reseller involved in piracy to curb their criminal behaviour.

Microsoft's decision to publicly reveal the conclusion of recent raids it has carried out on Middle East resellers trading copied software, therefore, is understandably attracting acclaim from legitimate resellers desiring greater protection. Whether it proves to be nothing more than just a classic use of scare tactics or not, the view from some Microsoft resellers is that illegitimate traders will be far less inclined to deal in pirated software if they see fellow lawbreakers exposed for their sins. Inside the last few months, operations initiated by Microsoft and the BSA have culminated in 10 arrests and the seizure of hundreds of disks loaded with pirated software. Earlier this month in Sharjah, three illegal traders were arrested after being caught with 100 assorted pirated CDs and PCs containing illegally downloaded software following a surprise raid carried out by anti-piracy operatives and the UAE authorities.

Following that raid, Jawad Al Redha, co-chairman of the BSA in the Middle East, claimed it was important for tactical initiatives to be sustained in an effort to stamp out crime syndicates. "Our collaborative efforts with local authorities and private organisations have yielded excellent results and have even encouraged other business establishments to join our campaign by providing valuable information about illegal traders in their area," he said. In a region where the market for copied software is larger than for genuine software, it could be argued that these busts barely scratch the surface. But they do succeed in sending out a powerful statement that the authorities will come down hard on perpetrators if necessary, argues Juma Al Leem, director of the censorship department at Dubai Government.

"The only way to deter the proliferation of these unlawful elements is through a compelling show of force," he reasoned. "Our efforts are also a way of encouraging consumers to deal only with resellers offering genuine software as doing otherwise would be tantamount to supporting these criminals. By keeping the industry free of illegal software distribution, we are encouraging more foreign investments and consequently generating new wealth for the economy."

Talal Ahmed Al Zaabi, chairman at UAE-based reseller Grandsys Group, believes the situation could be better resolved by efforts to strengthen relations between Microsoft and the local dealer community. He claims the soon-to-be-formed Dubai Computer Trader Group plans to issue a document to members that will set out clear guidelines towards promoting original software. "There has to be somebody in place within Microsoft to handle these problems before they go to court and open a case," he also added. "Maybe instead of US$15,000 fines, they could make [guilty resellers] buy US$15,000 worth of Microsoft products to sell instead."

Rajesh Keshwani, director at another UAE reseller, Tiger General Trading, feels Microsoft must be careful that it doesn't end up shooting itself in the foot with its aggressive stance on piracy. He suggests there is a danger that the company might end up losing relationships with parties that it could potentially transform into partners.

"Microsoft raids a few resellers, catches them, and the Ministry fines them US$3,000 or US$15,000 based on whichever law they were encroaching," said Keshwani. "They'll go out of business for some time because they can't afford to pay it and survive, but it doesn't actually improve the situation for Microsoft."

The legitimate channel is vital to policing the software reseller market in the Middle East and it is common for vendors to look upon authorised partners as their eyes and ears in the field. "Small and mid-sized business customers rely on our partners' recommendations in nearly 80% of sales interactions; it's important that we're doing all we can to make sure customers and partners are getting what they pay for," asserted Altinordu at Microsoft.

Security vendor McAfee admits that as well as receiving reports about customers who have not renewed their licenses, it also gets routine notifications from partners who spot other resellers illegitimately selling OEM versions off the shelf. Samer Malak, regional channel manager at the firm, believes an education-led approach is still the most effective strategy for tackling the problem.

"We try to provide a lot of awareness for the partners as well as getting end-users to have better asset management in terms of IT budgeting and educating them on where to get their software and not to buy from unknown sources," he said. "We are also trying to make it easy for people to report piracy."

CAD software vendor Autodesk cites the channel as one of its primary weapons in countering software piracy too. "I would actually term our authorised partners as ambassadors for legitimate software because they discuss the benefits of using software and provide customers with support when they have invested in legal software," explained Middle East programs manager Neethu Paul. "Moreover, they are a sort of channel through which we come to know about unethical behaviour in the market because as Autodesk we cannot be in the streets finding out who's doing what," she added.

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