http://www.techdirt.com/articles/20080718/1226541724.shtml

we’ve done a detailed analysis of how the BSA’s stats are misleading, but one bit of news that came out last year that was even more interesting is that in the majority of countries listed in the report, IDC does no actual surveys. Instead, it just makes up the numbers.

Im just re-reading your “detailed analysis” and I notice first off that you DO NOT provide ANY actual surveys, OR ANY ACTUAL NUMBERS, AT ALL !!!!

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So it would appear your ‘analysis’ is pure opinion, and alot of it is wrong opinion.

Except that this is almost entirely incorrect and it’s relatively easy to show why:

1.The report counts every unauthorized piece of software as a lost sale. You have to dig through separate PDFs to find this info, but when you finally get to the methodology it states:
The software losses are based on the piracy rate and equal the value of software installed not paid for.
That’s a huge, and obviously incorrect assumption. Many of the folks using the software likely would not have paid for it otherwise, or would have used cheaper or open source options instead.

Mike, That would therefore represent a LOSS OF SALE
from a cheaper or open source option. Would it not ??

So how is that NOT a loss of sale ? how is that **NOT** reducing competition ? the “cheaper or open source” option loses out, because someone wants to steal something they see as better.

How is the cheaper version or the open source version supposed to get market traction if there are cheaper alternatives, and are clearly better. ?

The consumer had a choice, he could choose a cheaper version, an open source version, or he could pay for the commercial version (what is mostly done), or he can steal ANY of those he wants if he chooses to break the law.

He decided to break the law, and when you do that you generally choose to steal the best you can get, not the cheapest.

So yes, file sharing DOES, clearly AS YOU HAVE STATED damage smaller business, and open source.. Point 1.

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2.
2.The report makes no effort to count the positive impact of unauthorized use of software in leading to future software sales. This is something that even Microsoft has admitted has helped the company grow over time. But according to the BSA’s report, this doesn’t matter.

And neither do you Mike !!

So Mike, when do you propose to “count the positive impact of unauthorized software” ?

or the negative impact on the development of that software you use, and not pay for, that means that the developers are not being paid, and new features will be slower to arise. Analyize that.

3.The report also proudly notes: “Software piracy also has ripple effects in local communities.” However, “ripple effects” are easily disproved as double or triple counting the same dollar.

Its called “money in circulation”, and it does have a very effective ripple effect, it has clearly been studied and analyized, and its very real.

And with all those transactions, with each transaction the government gets a cut, and that money pays for things like roads, water, electricity, security, and social stability.

Money on circulation has a much greater impact on the economy than does money that is not spent, or is borrowed or saved. That money does nothing in the short term.

Give it to the people, in wages, jobs and so on, and that money does ripple into other markets, and the economy in general. People with jobs can afford houses, cars, computers, dinners, kids, education. and so on.

Where is the ripple benifit that you talk about that is achieved from stealing something or not paying for it?

What model do you base your assumption on ? how do I improve the economy if I download a $5000 commercial PCB design package, to design a circuit card?

The company that spent years writing the software sees no money from me, so I effectively pay them ZERO dollars, and too boot I am not buying a cheaper version, or using an open source version. So how do I improve the economy ?

why should the open source or cheaper company even bother to enter the market ?. They know (as you said Mike), that most will opt for the better (illegal, free) version.

So what happens to the cheaper company, or the open source alternative ?

As you can see the ACTUAL or real market forces that determine what you will use is QUALITY, not price.
If the quality is not high enough then cheaper or “open source” does not matter. People want quality, and if necessary they will pay for it.

And if you dont pay for it, or expect it for free, then sooner or later that quality will fall, as there are less development money for that product.

Quality cost money, so you can go for cheap low quality, or free low quality, or illegal high quality, or legal (paid for) high quality.

No real commercial company would use a pirated copy or AutoCAD or AutoTrax, or LabVIEW for their commercial processes, they will pay for the product legally, and expect their own clients to pay for the legal products as well. Thats how (legal) businesses work.

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Point 4.

“Ripple effect in “the other” direction.

You think that a company would save $5000 on a software package and use that money to employ another worker ?
So they are happy to convert all their assets into liabilities ?

A software package is an asset, an asset is an economic resource, assets represent owership of value that can be converted into cash (allthough cash itself is also considered an asset).
Balance sheet of a form records the mnonetary value of the assets owned by the firm.

Intangibleassets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place.
(goodwill, copyrights, trademarks, patents and computer programs).

Employing staff, is a LIABILITY, an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets.

Wages, are a liability, and not an asset, and if you do not need to employ anyone else, (especially if you just stole some nifty software to do his job), then you WILL NOT employ anyone else, and you have not increased the value of your company. (you have not gained assets if you download a free software package).

Point 5.
See point 4, its the same thing. The company will not put on staff and increase liability, and reduce assets.
The chances of that money going into executive bonuses is far higher than it going into additional staff.
Its not like heaps of companies are trying to find workers these days. So it could be said easily we are experiencing the very problems that you say do not exist.

According to Mike, the US economy should be hiring, looking for skilled workers, and be going strong… ummm its not..

Point 6.
Unauthorized use of software is most likely to greatly outweigh the lost tax revenue elsewhere.

Software is a producivity tool, is saves employing more staff, you can do more with less, so you will not use illegal software and hire more staff. And again, the overall benifit of using illegal software to producivity compared to paying for the legal version of the same software is almost zero.

Any serious company would not use illegal products to gain a financial, or technical advantage over the competition.

And if you are the competition, and you play by the rules, is it right that the other company do better than you, by not obeying the laws ?

By not playing by the set out rules?
Or by benifiting from the work of others (the software writers) without rewarding them for their work, and ongoing development ?

Point 7.
7.Worst of all, the report seems to assume that direct software sales are the only business model for the software industry, ignoring plenty of evidence from companies that have adopted business models that embrace free software — generating billions of dollars for the economy (and in taxes)

You said yourself, companies will choose the commercial, professional grade software over the cheaper or free alternatives. The cheaper or free alternatives do not get the development attention they therefore should, and they do not get to become as good (in terms of quality) as the commercial offering.

Thats why Open Source and ‘cheaper’ companies cater for hobbiest or the ‘low end’ of town.

There simply has not been the development put into OSS, ‘alternative’ products that cater for the commercial end of business or industry.

There are no AutoCAD’s or high end PCB routing packages for Free software, there are no high end SCADA systems.

And people who does high end work would NEVER do it on pirated software, for their day job for their company.
They might have a pirated copy at home, to allow them to play or work at home, but anything “official” would be done on the legal copy of the software.

And of your bosses found out your were using illegal software AT WORK, you would probably be fired, for making the company’s practice illegal.

Just as if my boss told me to use an illegal copy of a package, I would have to explain to him that its not possible or legal for me to do so.
(and probably the product of my work is not legal).

Or look at it from the point of view of the company producing the commercail software, it cost money to employ programmers and write the software.

If EVERYONE downloaded it for free, where does that money to pay them come from ?

So Mike, if find it hard to see how you can call this a “detailed analysis”.

It appears to be pure opinion and conjecture !!

You have made some claims, and many assumptions, but you have provided NO facts, no analysis, and no studies to support your claim. I dont think it passes for “detailed analysis”. at all… do you ?