The Business Software Alliance (BSA), which represents the commercial software industry and spearheads the effort to stop the spread of unlicensed applications, estimates in its Global Piracy Study 2010 that USD 51.4 billion of unlicensed software was distributed in 2009. The report estimates that for every USD 100 worth of legitimate software sold in 2009, an additional USD 75 worth of unlicensed software also made its way into the market. According to the 7th Annual BSA/IDC Global Software piracy study, piracy levels in India are peggedat 65 percent.

Can the industry’s current favorite, cloud computing, come to the rescue? Some vendors believe it can—that it cannot be copied since the intellectual property is interwoven with the delivery model. Applications will be available as services that can be consumed only from a remote server as against the traditional method of
installing applications. 

"The affordability of the pay-peruse model will significantly reduce upfront investments and act as a major disincentive to piracy”

- Vikas Arora,  Group Director, Cloud Services, Microsoft India

 “The affordability of the pay-peruse model will significantly reduce upfront investments and act as a major disincentive to piracy. Additionally, as
applications are available as services, it will help protect intellectual property
and make it extremely difficult, if not impossible, to pirate,” says Vikas
Arora, Group Director, Cloud Services, Microsoft India.

That said, vendors believe that the piracy problem has escalated due to the lack of respect for intellectual property, and that a change in delivery model would not greatly affect the piracy rates.

“SaaS is not an anti-piracy solution by any stretch of imagination”

- Bharat Goenka, Co-founder & Managing Director, Tally Solutions

Argues Bharat Goenka, Co-founder & Managing Director, Tally Solutions,
“SaaS is not an anti-piracy solution by any stretch of the imagination. Any
technology that serves the suppliers’ needs and not the customers’ needs will—in any case—be irrelevant in the market. Buying software in the country is not easy, and that is a problem created by the industry, not the user. As we simply the buying process, more people will tend to buy.”

A leader in providing accounting solutions, Tally Solutions, suffers significantly from piracy. As for every official copy that Tally sells, approximately eight pirated copies get installed.

While Goenka says that SaaS is a good and novel technology, he
argues that the benefits touted go against fundamental principles. Says
Goenka, “One touted benefit for SaaS is reduced cost of licensing.” However,
converting an upfront payment to a monthly payment does not reduce the
cost of licensing—it only changes the cash-flow implications.”