Small and Medium Businesses in East Africa are beginning to open their eyes to the risks of pirated software and the benefits of legally licensed software, yet the rates of software piracy in the region still remain high.

That’s according to Billy Owino, Regional Director for Sage East Africa who says that software piracy undermines economic development and also potentially costs companies more in legal penalties and reputational damage than they would need to pay for legally licenced software.

Software piracy is the unauthorised duplication, distribution or use of computer software, an illegal practice that is subject to civil and criminal penalties.

A report by Kenyan authorities and Microsoft shows that software piracy in Kenya costs technology companies $128 million a year.

Software piracy rates in Kenya are thought to be as a high as 80%. It takes many forms such as End-user copying, that is when one person buys a legally licensed piece of software and then allows more friends, business colleagues and family to copy the application than he or she has licenses for.

Piracy also occurs through illegal downloading, that is when someone downloads an illegal copy of the software from the Internet.

Then there volume software license copying that is when businesses underreport the number of computers on which the software is installed so that they can pay for fewer copies than they are actually using, reseller copying where resellers pass software onto their clients for free rather than selling a license.

Also rampant in the region is counterfeiting where criminals copy the software and collateral, such as manuals, and sell it as the original product.

According to Owino, using pirated software is illegal. “If you purchase software from an unauthorized company, make illegal copies or download pirated versions, you are breaching the rights of software owner, says Owino adding that when caught, one could be prosecuted or have their reputation tarnished.

Many people think of software piracy as a victimless crime, but nothing could be further from the truth. By pirating software, organisations are depriving computer resellers and software vendors of their hard-earned revenues. This, in turn, impacts on the ICT industry’s ability to create jobs, invest in product research and development, and pay taxes, says Owino. Local resellers suffer because they don’t get the revenues they need to invest in their businesses.

In fact, the only beneficiary from software piracy is the pirate profiting off someone else’s work and intellectual property. In some cases, says Owino, pirates have ties to other organised crime activities, so one could accidentally be supporting drug and human trafficking when buying product.

What’s more, says Owino, “there is a very good chance that pirated software you buy from an unethical retailer or download via the Internet will contain some spyware or malware. Indeed, in some cases the motivation for giving or selling you pirated software is to plant a virus or key-logging software on your computer to steal your information”.

Another drawback of pirated software is that one will not have access to the vendor’s technical support or the latest patches and updates. This, says Owino will mean that one cannot be to use the full set of functionality in the product or keep it updated with the latest security features and fixes.

“In a time of seismic technological change and digital invention, our smart people use the smartest technology to reinvent and simplify business accounting. We enable our customers to focus on their business and help them to leapfrog to the future,” says Owino. “It is only through the support of our customers that we are able to keep investing in innovation that helps entrepreneurs to stay focused on growing their businesses.”