CAASTing about for pirates

by Alan Zisman (c) 2001. First published in Vancouver Computes, June 2001

While the recording companies and their war on Napster-using music consumers to protect their copyrights and profits got most of the media attention, a similar battle has been brewing between the Canadian software industry and their customers.

CAAST (the Canadian Alliance Against Software Theft), an industry group representing a dozen or so of the biggest software producers?the likes of Apple, Adobe, Corel, Microsoft, and Symantec?declared the month of April ?Amnesty Month?, and offered businesses and organizations such as schools a month to clean up their act in regards to the use of unlicensed software.

Declining growth in hardware sales has resulted in pinched profit margins for software producers as well?software is most often purchased in conjunction with new hardware. As well, many business and home users are breaking free from the urge to upgrade as soon as a new software version is announced. Fewer than 20% of MS Office-usersupgraded to Office 2000, while the next version, Office XP is already hitting the store shelves.

CAAST suggests that Canadians have a higher rate of unlicensed software use than our American cousins. CAAST claims Canada had a 39% piracy rate in 1997, compared to a 27% south of the border, and estimates that the difference cost Canadians some 22 thousand jobs, $2.7 billion in sales, and $750 million in tax revenues.

1999 figures quoted by CAAST claim that piracy costs in BC alone added up to $77 million in retail sales and nearly 4000 jobs. Overall, the organization claims that together, the US and Canada account for US$3.6 billion in piracy, with worldwide piracy estimated as costing the companies some US$12 billion.

These figures can be debated? even if accurate, many home users pirate programs that they would never consider purchasing. And widespread piracy can help boost a market leader into a monopoly position.

But with profits falling, any decrease in the rate of unlicensed software shores up the software companies weak bottom lines.

Hence CAAST?s recent campaign. Software piracy can be dealt with as a crime under Canada?s Criminal Code or as a civil matter. CAAST has pursued sellers, both of pirated software and of hardware bundled with unlicensed software. While they haven?t (so far) been actively pursuing individual software users, they have been prepared to challenge corporations and other organizations. Typically, these groups reach an agreement with CAAST to keep the matter out of court, generally including buying all the unlicensed software at full retail prices. As well, over the past eight years, CAAST and its US-counterpart, the Business Software Alliance have received about US$58 million in penalties from companies with unlicensed software, with this amount going to fund the two organizations? education and enforcement programs.

As part of the April amnesty, CAAST stated that any organization registering with them would be ?excused from penalties for software violations occurring prior to April 1, 2001?. Using direct mail and radio advertising, CAAST aimed to contact 20,000 businesses in Vancouver, Calgary, Edmonton, and Winnipeg.

Businesses were not the only target. For example, principals at several Vancouver schools received a letter from the group. In turn, the school district?s Judy Dallas sent a memo to all the principals noting CAAST?s interest in schools, pointing out the possible penalties for use of unlicensed software, and outlining practices that all of Vancouver?s schools should follow to keep track of software licenses and usage.

I don?t know whether CAAST will end up visiting any of these schools, but from the point of view of the software industry, it may not matter much-- as a result of the campaign, a number of schools rushed to get in their purchase orders for software that had somehow accumulated, unlicensed, on all those computers they had aquired over the years.

Things may change.

On the one hand, software companies like Microsoft are toying with the idea of trying to move customers to a rental model?which has been common practise for years for mainframe computer software. A variation on this would involve ASPs, application service providers offering customers access to software online?for an ongoing fee.

Users wanting off the software licensing treadmill without resorting to software piracy, on the other hand, have an increasingly viable alternative in free or open source software. While this business model is still evolving, open source companies like Red Hat are making their products available for free downloading, while hoping tomake a profit by charging for support.

Users can cut the cord completely, opting for free operating systems such as Linux or Free BSD, along with a growing number of productivity applications?office suites such as ApplixWare or Sun?s Star Office, graphics software like Gimp. Even games are appearing for the open source OS. Or users can choose to keep using their familiar Windows operating system?after all, most of us paid for it along with our computer hardware, while trying out Windows versions of Star Office, Gimp or the Software 602 office suite.