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May 23, 2006

The financial impact of software piracy, Tues., May 23, 2006, 8:28 AM

This morning I have my long-term thinking cap on. In other words I am noodling the future, which will become more obvious in my next article and in an article I will (with an editor's consent of course) have published in a few days in a major publication.

My thoughts are on things like the underground economy, and why the Global Banks and the Gnomes are now almost daily reminding us of the Rule of Law. I sense that something big is happening.

Software piracy is an important topic in the big scheme of things because it is a subject of who controls what. As part of the debate, the UBS research team have published a long report on the financial impact of software piracy. Two of the Cara 100 companies, Adobe Systems and Autodesk Inc are involved.

Download UBS report on Software Piracy

Cara 100 GICS 45 Adobe Systems Inc. (ADBE) (ADBE) Financial Data

Cara 100 GICS 45 Autodesk, Inc. (ADSK) (ADSK) Financial Data

Posted by Posted by Bill Cara on May 23, 2006 08:29:08 AM | Category: 45 Info Technology

Discourse

Bill,
I read the report cover-to-cover. Wow! When you have the world's 2nd largest enonomy having widespread ( 70 - 90 % ) utilization of software for 63 cents a copy I would forget about the "China Opportunity" and be focused on the prevention of exporting of high quality software counterfeits into home markets. In the meantime, non-participation in China plus the growing adoption of Linux and open-source puts big negatives on whatever investment opportunity exists in the software sector in the near-term. Thanks again, Bill, for keeping us informed.

Posted by: TerryC [TypeKey Profile Page] at May 23, 2006 11:56 AM [link]

Thanks for posting the link to the thorough UBS report. China and the other high piracy countries will eventually have to come to grips with this issue if they ever want to have high tech industries of their own. The UBS report provides enough data to model how the decrease in piracy will increase revenue for companies like ADSK over the coming years.

Posted by: CalexKitty [TypeKey Profile Page] at May 23, 2006 12:03 PM [link]

CalexKitty,
Based on history, I can give little credence to the report's conclusions and find the piracy-reduction model overly optimistic. Piracy has been rampant for years and I suspect that B. Gates' MoUs mean little. China is simply buying time until they have a home-grown OS which they will control just as they closely control most aspects of their society. China's plan to adopt TD-SCDMA - a domestic wireless standard - is an example of what is to come: preference and market advantage given to the locals to the detriment of their trading partners. If there is any serious IP enforcement in the future it will be at two levels - one for the home-grown IP and " a wink and a nod" toward everything else.

Posted by: TerryC [TypeKey Profile Page] at May 23, 2006 1:58 PM [link]