early half the world’s personal computers use software that is pirated. In India, it’s worse. Only about one-third of the software sold is genuine, according to Business Software Alliance (BSA), a trade group representing some of the largest software makers, including Microsoft and Adobe.
If the numbers remain alarmist, you only need to visit the country’s largest technology market, Nehru Place in New Delhi. Its notoriety as a haven of software piracy was articulated by the US last month and it’s easy to see why. At first glance, a first-time visitor to Nehru Place might feel misguided. There’s nothing technology about it.
Street hawkers swamp the two main lanes alongside rows of shops, selling fake branded clothes, watches, shoes, utility items, and what have you. Cut through them to reach the stores selling computers, tablets, smart phones and just about any kind of software. But even before you can enter any of them, 19-year-old Inder Kumar, boyish and street-smart, accosts with a seven-page catalogue.
It’s literally an A to Z of software, from Adobe to Z-Brush (a digital art software ). And he promises to sell them, at prices cheaper than a pair of boxers . He is all mouth even as his eyes dart around for cops and flying squads from Microsoft.
A Delhi Police cop is approaching, and as he nears, Kumar flees, snatching the catalogue. When the cop is gone, Kumar is back, keen to strike a deal. Boys like Kumar, about 300 of them, are all over Nehru Place, earning Rs 150 a day by selling pirated software. About a year back, they were more rooted — they operated from benches just outside the computer stores.
A police swoop put an end to that, but not to piracy — the boys move around. In the last five years, efforts by piracy watchdog Business Software Alliance (BSA) and industry players , including Microsoft and Adobe, has lowered software piracy in India by 7 percentage points to 64%. That is, 64 out of 100 softwares sold are pirated, against 71 in 2006.
But because of more computers being sold, the value of pirated software has more than doubled during the same period, from $1.27 billion to $2.73 billion. It’s why last month the office of the US trade representative (USTR) listed Nehru Place as among the 30 most notorious IT markets in the world that infringe on intellectual property rights (IPR).
Besides Nehru Place, an earlier USTR report released in February had mentioned Richie Street and Burma Bazaar in Chennai; Manish Market, Heera Panna, Lamington Road and the Fort District in Mumbai; and Chandni Chowk in Kolkata on the list. A high arbitrage — difference between original and pirated software — and weak enforcement give them reason to flourish.
High arbitage
Take Nehru Place. When it came up in 1976, it was called Kalkaji District Centre, and housed government entities like LIC, NTPC, NHPC and Iffco. It was only in the late-1980 s and post reforms that the place grew as a major hardware market — rents here were cheap. And the price differential between legal and illegal was huge.
“Import tariffs on computers (hardware and software) were 300%, encouraging a smuggled goods market via Nepal’s porus borders to India,” recalls Saket Kapur, general secretary, Progressive Channels Association of Info Tech (PCAIT), an association of IT traders.
Import duties on computers have crashed to less than 10% now, and have virtually killed the grey market in hardware. In Nehru Place, company dealerships on the ground floor are nudging the resellers on the first floor into declining relevance. But in software, little has changed. The way computing is evolving, the cost of software as a percentage of total cost has increased. Users need more software — particularly applications like those to run videos on computers — and people are buying more games, making it lucrative to peddle pirated ware.
“In the 1990s, software cost was 10% of the total machine,” says Kapur. “Now, software costs as much as hardware.” And the price differential between original and pirated software is phenomenal . A genuine Microsoft Windows 7 costs Rs 5,690-10 ,690, depending on the version (home, student or ultimate), while a pirated one costs Rs 200. Sumeet Khanna, director, Windows business group, Microsoft India, defends the pricing, saying that the company makes an enormous intellectual investment.
Citing another example, Kapur notes that certain specialised software like Computer Aided Design (CAD) used by architects can cost upwards of Rs 50,000, while a pirated copy costs less than Rs 500. “A new architect who is yet to establish his practice may go in for pirated ware to save costs,” he says. Adds Devesh Aggarwal, CEO of Mumbai-based CompuSoft: “Software that needs no support (like basic operating system or office applications) is more pirated than one that needs support (like ERP or core banking software).”
Weak enforcement
According to Indian Software Developers’ Association, Nehru Place accounts for about half of the Rs 12,000-15,000 crore of software sold annually in the country, legally, and is the single largest IT market in Asia. Extrapolate the 64% illegal software figure for all of India, and Nehru Place is a beehive for software piracy.
Lizum Mishra, director, BSA, who sits on the 15th floor of Eros Corporate Tower, ironically located at Nehru Place, says: “We have the right laws, but enforcement is just not there and piracy thrives at Nehru Place.” Boys like Kumar are frequently caught and bailed within 24 hours or let off for small pay offs to the police.
Not surprisingly, they are back, peddling pirated ware. There’s only so much the industry can do to curb piracy. Microsoft does more than a dozen workshops around the country to educate channel partners and retailers on the harm that piracy does. Companies also tip off authorities if they come across rampant piracy in enterprises (for example, a company may have taken 10 licences, but the software is being used by 20 people). Court-appointed inspectors or commissioners can raid companies where they suspect piracy. However, the CBI has just 2,500 officers to take care of all economic offences and is stretched to chase every case of software piracy. “Piracy has come down,” says Khanna of Microsoft. “But in absolute terms, growth in the computer market and drop in piracy are not in sync. The problem is, culturally, we are not tuned to pay for services.”
He also blames retailers for piracy. “They give an option to buyers to buy naked machines (computers without software) and try and sell gear like printers for the money that would go into software.” Vipul Jain, director, eFuture, a large Nehru Place retailer, says organised retail is not behind piracy. He blames it on India’s systemic problems like corruption and crime.
Step outside his office, and you can spot Kumar and his ilk busy looking out for customers and cops. Both genuine and pirated goods do brisk business here, but the latter only seems to grow as the market expands.
Source:http://timesofindia.indiatimes.com/tech/enterprise-it/security/Nehru-Place-A-beehive-for-software-piracy/articleshow/11349126.cms
