MOSCOW. (RIA Novosti economic commentator Vasily Zubkov.) To criticize Russia for rampant computer piracy has become a convenient topic in the West: they say 87% to 88% of software circulating on the Russian market is pirated.
This, however, should not be perceived as characteristic for all Russian IT sectors. Russian software developers - members of the nonprofit Software Suppliers' Partnership - have probably a cleaner record on piracy than many Western outsourcers.
Erran Carmel, Associate Professor at the Information Technology Dept., Kogod School of Business, American University in Washington, D.C. says security of intellectual property is certainly not the biggest problem for such international giants as Dell, Siemens, Motorola, Boeing, GE, Samsung Electronics, and many other major international players who approach Russian software developers.
Violation of trust in direct contact with a respected customer is universally considered to be the gravest intellectual property offense often equal to industrial espionage. In developed countries, it is often subject, in addition to public exposure and loss of business reputation, to criminal persecution.
In fact, Russia's 88% proportion of illegally copied software looks appalling only when not compared to Western Europe's 37%, U.S. 30%, Eastern Europe's 67%, and, most importantly, to China and Malaysia's 2004 records provided by Entertainment Software Association. Following Vietnam (92%), Ukraine (91%), China (90%), and Zimbabwe (90%), Russia - together with Indonesia - is listed fifth in the league of pirate-loving nations.
It is true that, according to Russia's high-tech police officials from K Department at the Interior Ministry, most Russian corporations (some say the number is 90%) use pirated software, most frequently Microsoft Office packages. With genuine Windows XP Professional sold at $130 to $150 per copy, most Russian corporate as well as individual customers find legal software cost-prohibitive.
This is largely because lawmakers have failed to provide a legal base for an effective fight against computer piracy; massive police raids and widely publicized shows with bulldozers crawling over piles of pirated CDs were too crude to win the hearts and minds of Russian people and encourage them to buy the genuine articles; adverse publicity of counterfeit software rarely causes something but cynical remarks as Russians cheerfully buy and sell fake CDs under "we-love-Microsoft" posters.
Last year, Russian producers and distributors of counterfeit software earned $1.4 billion of the $90-billion global software market, in which, according to IDC and Business Software Alliance, pirates account for 35% of sales.
This trend is as grim as it is unsurprising. Genuine software copies are several times as expensive as pirated copies, whose price effectively includes only materials, distribution costs and a moderate profit margin. A licensed copy of 1S Accounting, a popular Russian enterprise management package, costs $2,000 while a pirated one is available for around $100. At such a gap between the two, most customers do not even bother to think of legal - let alone moral - implications.
Most household-level customers, who have yet to decide whether the additional expense for licensed programs pays off, say their comfortable price margin for basic software lies between 100 and 300 rubles ($3.5-$10.5) per disc. At this price, they would buy only officially approved copies, people say. When asked about the morals of buying pirated software, nine in ten buyers at Gorbushka, Moscow's largest computer market and allegedly pirate haven (shop-owners there say a quarter of their clients are Europeans and Americans), said, well, it might be not good but licensed software is too expensive. At unethical wages of $100 to $200 per month, they say, who could expect that a Russian schoolteacher, doctor, civil servant, or academic will think of buying ethical software? Without pirated programs, many computers that are selling very inexpensively nowadays would have remained piles of metal and silicon, leaving people without communication and without access to knowledge and entertainment.
Sergei Kapitsa, a famous academic and longtime anchor of the popular science show Ochevidnoye Neveroyatnoye on Russian TV, in a private conversation described Gorbushka as "the most progressive place in Russia" because for many Russians it became the only window to cultural, scientific, and artistic treasures of the world.
Copyright experts warn that fast development of hard disc capacity and broadband Internet could soon even squeeze Gorbushka out of business: many people download all programs they need through peering networks, not even knowing who the provider is.
While computer pirates have already proven themselves flexible and market-friendly enough to successfully counter traditional police techniques, they will not feel as comfortable when living standards become higher. Poor people will not think of buying genuine software, but many Russian buyers of expensive laptops already opt for "clean" software.
Corporate clients also reveal better understanding. Firstly, under the new Code of Administrative Offenses, corporations could lose computers that fake programs are installed on (in the central Russian city of Saransk, three computers powered by fake Windows were confiscated from the local department store); secondly, the creation of cracks that allow illegal copying and distribution is a criminal offense punished by up to five years' imprisonment (in the same city, a hacker got five years for selling self-cracked software; in the southern regional center of Rostov-on-Don, chief engineer of software distributor Servis Plyus Co. was fined); thirdly, an unexpected program error can cost the company a lot more than a dozen licensed copies.
The proportion of licensed software is the highest in Russian banks and the offices of cellular operators because they run many business-critical applications, and in public institutions because they are the most exposed to scrutiny and have no cost-reduction motivations.
As Russia's accession to the World Trade Organization moves forward, with copyright protection being the most pressing issue on the agenda, the Russian government is vowing to take action and get the fake software market to a "civilized" 60% to 70% share, comparable to that of Eastern Europe.
