The BSA Global Software Survey quantifies the volume and value of unlicensed software installed on PCs in 2013. To compile the report, BSA worked closely with IDC, one of the world’s leading independent research firms, to measure, understand, and evaluate licensed and unlicensed software use globally.
The study involves collecting 182 discrete data inputs and assessing PC and software trends in 116 markets.
Measuring the scale and scope of illegal behavior like unlicensed software use clearly has its challenges. While this study is considered to be one of the most sophisticated appraisals of global copyright infringement, BSA and its partners continually look for new ways to improve the reliability of the data. In 2011 in partnership with two prominent IT economic researchers, BSA made several modifications designed to refine the inputs and ensure the most accurate estimation of unlicensed software use possible.
GLOBAL SURVEY OF SOFTWARE USERS
A key component of the BSA Global Software Survey is a global survey of nearly 22,000 home and enterprise PC users, conducted by IDC in early 2014. The survey was conducted online or by phone in 34 markets that make up a globally representative sample of geographies, levels of IT sophistication, and geographic and cultural diversity. In addition, a parallel survey was carried out among 2,020 IT managers in 20 countries.
The surveys are used, in part, to determine the “software load” for each country — that is, a picture of the number of software programs installed per PC, including commercial, opensource, and mixed-source programs. Respondents are asked how many software packages, and of what type, were installed on their PC in the previous year; what percentage were new or upgrades; whether they came with the computers or not; and whether they were installed on a new computer or one acquired prior to 2013. These questions are asked of both consumers and of business users.
In addition, the surveys are used to assess key social attitudes and behaviors related to intellectual property, unlicensed software use, and other emerging technology issues. This insight provides fresh perspective each year on the dynamics underlying unlicensed software use around the world.
Survey countries are selected using a rotational strategy to maximize worldwide coverage year over year. Eleven priority markets are surveyed in concurrence with each study cycle and 52 countries are surveyed at least once every two to three cycles. The remaining countries are selected 12 BSA | The Software Alliance on an ad hoc basis. In any given study cycle, the total survey population accounts for over 85 percent of total software units deployed and around 90 percent of paid-for units, while ensuring that most markets are surveyed at least once every three study years.
CALCULATING RATES OF UNLICENSED SOFTWARE INSTALLATION
Since 2003, BSA has worked with IDC, the leading provider of market statistics and forecasts to the IT industry, to determine rates of unlicensed software use and the commercial value of those unlicensed installations.
The basic method for coming up with the rate and commercial values in a country is as follows:
- Determine how much PC software was deployed during the year by consumers and business users.
- Determine how much was paid for or otherwise legally acquired during the year (such as through an open-source, free or complementary license), again segmented by business and consumer usage.
- Subtract one from the other to get the amount of unlicensed software. Once this amount is known, the unlicensed rate is computed as a percentage of total software installed.
To calculate the total number of software units installed — the denominator — IDC determines how many computers there are in a country and how many of those received software during research products called “PC Trackers” that cover 86 countries, and it covers approximately 20 more countries through custom assignments. The remaining few countries are researched annually for this study.
Once IDC has determined how many computers there are, both consumer PCs and business PCs, and using the software load data collected in the survey, it can determine the total software units installed — licensed and unlicensed — in each country.
To estimate the software load in countries not surveyed, IDC uses a cluster analysis technique to find like characteristics with countries with varying software loads and using these characteristics to assign loads to countries not surveyed. IDC validates this by looking at correlations between the known software loads from surveyed countries and their scores on an emerging market measure published by the International Telecommunications Union, called the ICT Development Index and dividing them into cohorts in order to compare them to unsurveyed countries.
To get the number of unlicensed software units — the numerator of the equation — IDC must determine the value of the legally acquired software market. IDC routinely publishes software market data from about 80 countries and studies roughly 20 more on a custom basis. For the few remaining countries, IDC conducts annual research for the purposes of this study. This research provides the value of the legally acquired software market. The value is broken down by consumer and business users.
To convert the software market value to number of units, IDC computes an average price per software unit for all of the consumer and business PC software in the country. This is done by developing a country-specific matrix of software prices — such as retail, volume-license, OEM, free, and opensource — across a matrix of products, including security, office automation, operating systems, and more.
IDC’s pricing information comes from its pricing trackers and from local analysts’ research. The weightings — OEM versus retail, consumer versus business — are taken from IDC surveys. IDC multiplies the two matrices to get a final, blendedaverage software unit price.
To arrive at the total number of legitimate software units, IDC applies this formula:
In 2011, IDC implemented several measures to validate its calculations of average software unit price. Analyst teams in 25 countries have been asked to provide additional information on software price by category and user (consumer or business) and estimates of acquisition type (e.g., retail, volume-license, free/open source) to serve as a cross-check against IDC’s computed values. Rotating the countries for which information is collected each year allows IDC to recalibrate software prices periodically, providing a more accurate estimate of legitimate software units from industry revenues.
Finally, subtracting the number of legitimate software units from the total software units reveals the number of unlicensed software units installed during the year.
This process provides the underlying data for the basic rate equation.
CALCULATING THE COMMERCIAL VALUE OF UNLICENSED SOFTWARE
The commercial value of unlicensed software provides another measure of the scale of unlicensed software use and allows for important year-over-year comparisons of changes in the software landscape.
It is calculated using the same blend of prices by which IDC determines the average software unit price, including: retail, volume license, OEM, free, open-source, consumer or business, etc. The average software unit price is lower than retail prices one would find in stores.
Having calculated the total units of software installed, as well as the number of legitimate and unlicensed software units installed and the average price per software unit, IDC is able to calculate the commercial value of unlicensed software.
WHAT SOFTWARE IS INCLUDED
The BSA Global Software Survey calculates unlicensed installations software that runs on PCs — including desktops, laptops, and ultraportables, such as netbooks.
It includes operating systems, systems software such as databases and security packages, business applications, and consumer applications such as games, personal finance, and reference software. The study also takes into account the availability of legitimate, free software and open-source software, which is software that is licensed in a way that puts it into the public domain for common 14 BSA | The Software Alliance use. It is typically free but can also be used in commercial products.
It does NOT include software loaded onto tablets or smart phones. It also excludes software that runs on servers or mainframes and routine device drivers, as well as free downloadable utilities, such as screen savers, that would not displace paid-for software or normally be recognized by a user as a software program.
The study includes cloud computing services such as software-as-a-service (SaaS) and platformas- a-service (PaaS) that could replace software that would otherwise be installed on personal computers. Software sold as part of legalization programs — such as a bulk sale for a government to distribute to schools — also is included in the study.
THE IMPACT OF EXCHANGE RATES
Prior to 2009, dollar figures in the value tables were in current dollars from the year before. For example, the 2007 value of unlicensed software was published in 2006 dollars for easier year-onyear comparison. In 2009, BSA made a decision to publish value figures in the current dollars of the year being studied. Thus, 2009 values are in 2009 dollars, 2011 values in 2011 dollars, etc. We do not restate previous values in current dollars.
This is important when evaluating changes in the values over time. Some of the changes will be based on real market dynamics, some on exchange rate fluctuations from year to year.
For instance, 2011’s commercial value of pirated software, if converted to USD at 2013 exchange rates rather than 2011 exchange rates would be 6 percent higher than published.