Why pirated software will cost you

A Microsoft study has revealed that the chances of consumers getting infected by malware when downloading pirated software is in three. Three in ten businesses that download pirated software will be infected by malware, resulting in them spending $22 billion identifying and recovering from the damage caused.

Computer users who install pirated software on their computers in the hope of saving money are in for a rude surprise, according to a new study released by the IDC this week.

The study, commissioned by Microsoft, found that the chances of infection by unexpected malware are one in three for consumers and three in 10 for businesses. As a result of these infections, consumers will spend an estimated 1.5 billion hours and $22 billion identifying, repairing and recovering from the impact of malware, while businesses will spend around $114 billion to deal with the impact of malware-induced cyber-attacks.

The IDC study, titled ‚”The Dangerous World of Counterfeit and Pirated Software,‚” was released today as part of Play it Safe, Microsoft’s global initiative to bring awareness to issues related to software piracy.

Although the IDC survey did not include South Africa, an informal survey run by Microsoft SA found that close to a third of respondents had unknowingly installed pirated software on their computers in the past two years, causing them to spend time and money recovering from the impact.

‚”This is costing businesses time and money to fix problems relating to pirated software time and money which could have been spent on growing small businesses, employing employees and adding to the economy,‚” said Mteto Nyati, managing director at Microsoft SA.

However, the impact of piracy goes beyond business and consumers, said Nyati: the livelihoods of local software businesses and computer dealers are also being impacted by pirates, as their activities are eating into their business revenue.

‚”If we’re going to be serious about building small businesses and creating employment opportunities in South Africa, we have to work actively to stamp out piracy,‚” said Nyati.

Amanda Lotheringen from the Companies and Intellectual Property Commission (CIPC) said the commission has a mammoth task ahead to protect businesses and the individual software developer’s rights to create intellectual property. ‚”We value our partners like Microsoft to assist us in building awareness and educate consumers on the impact piracy has on the country’s economy as well as individual consumers,‚” she said.

The study found two main sources of counterfeit software: it is either pre-loaded on computers sold by unscrupulous dealers, or downloaded from the Internet. Of this, 78% of the software downloaded from websites or P2P networks included some type of spyware, while 36% contained Trojans and adware.

‚”The cybercrime reality is that counterfeiters are tampering with the software code and lacing it with malware,‚” said David Finn, associate general counsel in the Microsoft Cybercrime Center. ‚”Some of this malware records a person’s every keystroke – allowing cybercriminals to steal a victim’s personal and financial information – or remotely switches on an infected computer’s microphone and video camera, giving cybercriminals eyes and ears in boardrooms and living rooms.‚”

IDC chief researcher John Gantz said the research was unequivocal: ‚”Inherent dangers lurk for consumers and businesses that take a chance on counterfeit software. Some people choose counterfeit to save money, but this ‚’ride-along’ malware ends up putting a financial and emotional strain on both the enterprise and casual computer users alike.‚”

In line with global best practice, Colonel John Matroos said the SAPS’ Commercial Crime head office has a sophisticated partner ecosystem, called Inter-departmental Enforcement Committee, consisting of industry, government departments, customs and the legal system to enforce the protection of Intellectual Property rights.

Other survey highlights:

· 64% of the people respondents knew who had used counterfeit software experienced security issues.

· 45% of the time, counterfeit software slowed their PCs, and the software had to be uninstalled

· 48% of respondents noted that their greatest concern with using counterfeit software was data loss

· 29% were most concerned with identity theft

· In South Africa, 82% of respondents who had installed non-genuine software had experienced security and system-related issues.

· Over 70% of local respondents collectively highlighted the loss of data, identity theft and affected computer performance as the biggest concern.

· Only 58% of local respondents said that they always install security updates to keep their software up to date.

· In the past two years, over 43% of respondents reported they have knowingly or unknowingly borrowed pirated software to install while 28% downloaded it from the web or from a peer to peer computer network.

The IDC white paper also explored the surprising level of end-user software installations made on corporate computers, exposing another method for the introduction of unsecure software into the workplace ecosystem. Although 38% of IT managers acknowledge that it happens, 57% of workers admit they install personal software onto employer-owned computers.

‚”The reality is that more and more employees are downloading software on to their computers at work up to 40% in South Africa, according to our local survey,‚” said Microsoft SA’s Nyati.

65% of IT managers agree that user-installed software increases an organisation’s security risks. For many in the enterprise, user-installed software may be a blind spot in ensuring a secure network.

Microsoft cautions to rather be safe than sorry when it comes to suspected pirated software. IT departments and consumers should contact Microsoft’s anti-piracy team at sapiracy@microsoft.com if they are unsure or suspect any unfair play.

· The study analysed 270 websites and peer-to-peer (P2P) networks, 108 software downloads, and 155 CDs or DVDs, and interviewed 2 077 consumers and 258 IT managers or chief information officers in Brazil, China, Germany, India, Mexico, Poland, Russia, Thailand, the United Kingdom and the United States.

· Customers are encouraged to visit or www.howtotell.com if they are unsure or www.microsoft.com/security to learn about malware and ensure their machine is not infected: if malware is present, the site offers tools to remove the infection. Customers shopping for a new computer are encouraged to buy from a reputable source to ensure they are receiving genuine Microsoft software.

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