Gauteng Business News

Send  Share  RSS  Twitter  17 Oct 2008

Security:  Software pirates rob SA industry of R1.9bn annually


Recent Gauteng Business News

They are a new breed of criminals who come in all shapes, sizes and guises and are found in large and small companies, schools, universities, our homes, government offices and just about anywhere else.

Annually they steel upwards of R1.9-billion in South Africa alone.

They are the software pirates, mostly ordinary people from all walks of life who make illegal copies of computer software for friends and relatives, to sell to others or to save themselves the cost of having to legally purchase software. Some make a living out of it.

The software industry points out that regardless of whether someone commits piracy only once, or on a regular basis, it remains a serious crime either way. It is alarming that in South Africa - where the small and medium business sector has become increasingly important for economic growth - the majority of small businesses are using illegal software according to Microsoft.

Even though South Africa last year had a software piracy rate of only 34% compared to the African average of over 80% (Zimbabwe being 91%), the global technology research company IDC says that a mere reduction in piracy of 10 percentage points over four years could generate R6-billion in additional revenue in the South African information technology (IT) industry and as many as 1,210 extra IT sector jobs. In addition the state would receive an extra R490-million in taxes.

Which means ordinary South Africans and communities across the country are the end victims of software piracy, says Jan Wessels, managing director of the Dex Group of Companies, a global IT group based in South Africa which specialises in IT security solutions, software protection and license management solutions.

Software piracy takes on many forms. For example, so-called “softlifting”, which refers to the purchase of a single licensed copy of software which is loaded onto several machines; uploading and downloading software illegally over the Internet; shops and distributors loading unauthorised copies of software onto hard disks to promote the sale of PCs; making and selling counterfeit copies of software; and unbundling or selling standalone software that was meant to be sold as part of a package with specific hardware.

In South Africa the computer industry makes use of two laws to combat the illegal reproduction and use of software. These are the Counterfeit Goods Act, which carries a maximum fine of R5,000 or three years’ imprisonment, or both per item and the Copyright Act which carries the same maximum penalties.

The Copyright Act is mostly used to prosecute small business owners and civil claims for damages that may amount to several times the cost of the unlicensed software can also be instituted. Larger multinational organisations like Microsoft have the means to combat and prosecute piracy far more effectively than the smaller developers who, ironically, are far more dependent on income from individual licenses.

Most software companies are now trying to stamp out these illegal practises by requiring newly installed packages to be checked online for unique signature authentication against a global database.

“This is not a new problem. Companies have been fighting it since software was first developed. However, the increased use of electronic media and the availability of tools to allow illegal replication is rapidly exacerbating the problem,” says Wessels.

Globally there are a number of sophisticated software security solutions available that protect software from piracy and of which Hardware Assisted Software Protection (HASP) technology is considered to be the leading example. This type of technology will provide copy protection, secure the Intellectual Property (IP) that resides in the code and data files of software and can provide flexible licensing options for software.

HASP technology, previously referred to also as “dongles”, still provides the most effective protection due to being hardware based. And the HASP technology is being improved continually to allow developers to stay ahead of the pirates.

In South Africa DexSecurity Solutions is a leading provider of this sophisticated technology that has many unique application features and supports a wide range of operating systems.

“Our HASP technology utilises Software Digital Rights Management, which refers to the simultaneous utilisation of software protection, licensing and distribution. The Aladdin HASP technology family provides the hardware and software tools to ensure the protection and easy distribution of intellectual property,” says Wessels.

The HASP security solutions provided by Dex cater for single users of stand-alone computers, network environments in enterprises and for use in trial software. A HASP-key is sold with the software and the software package can only be utilised if the key is inserted into the computer, thus preventing illegal use of software copies. Copying of the key is not possible due to various hardware layer protections that the typical software pirate does not have knowledge off.

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