Pirated Software To Cost Businesses £297Bn In 2014

Microsoft has published a new study from analyst house IDC and the National University of Singapore (NUS), which warns businesses of the risks when they run unlicensed software.

The study is based on a survey of 1,700 IT professionals, government workers and consumers in 15 markets.

Financial Cost

The study, sponsored by Microsoft, “revealed that enterprises are particularly hard hit by malware introduced via pirated software,” David Finn, associate general counsel and executive director of Microsoft’s Cybercrime Centre, wrote in a blog post. This year, IDC forecasts that “businesses will spend $127 billion (£77bn) dealing with security issues and $364 billion (£220bn) dealing with data breaches.”

In total, businesses will spend nearly half a trillion dollars ($491bn or £297bn) cleaning up after pirated software in 2014. Finn added that “almost two-thirds of these losses, or $315 billion (£190bn), will be the result of organised crime – malware launched by financially motivated criminals.”

Last year, in a similar study also conducted by IDC, the companies predicted that enterprises would spend $114 billion (£69bn) in 2013 to eliminate malware from counterfeit software.

At the same time, governments stand to lose more than $50 billion (£30bn) recovering from malware-ridden pirated software. Government officials polled by IDC are most concerned about “the loss of business trade secrets or competitive information (59 percent), followed by unauthorised access to confidential government information (55 percent) and the impact of cyber-attacks on critical infrastructure (55 percent),” wrote Finn.

Consumers will also get hit hard, in terms of cost and time. IDC and NUS expect individuals to spend $25 billion (£15bn) and 1.2 billion hours fixing infected systems. And there’s no guarantee that buying a supposedly new, off-the-shelf PC will keep users safe.

Infected Computers

In a forensic analysis of 203 computers that were bought “new” in 11 countries, NUS discovered that 61 percent were loaded with pirated software. “Most of the infected computers had more than one malware threat on them, and any one threat could infect multiple files.”

According to IDC, other highlights include the following:

1. Consumers and enterprises have a 33 percent chance of encountering malware when they obtain and install a pirated software package or buy a PC with pirated software on it.
2. When asked about their biggest fears associated with a security event, 60 percent of consumers put loss of data or personal information in the top three and 51 percent placed unauthorised access or online fraud in the top three.
3. Despite these fears, 43 percent of consumers don’t routinely install security updates on their computers.
4. Because of its large installed base of PCs and high piracy rate, the Asia-Pacific region will incur more than 40 percent of worldwide consumer losses and more than 45 percent of enterprise losses from malware on pirated software.

Echoing the company’s stance on software piracy, Finn said the study shows “how vital it is that individuals, small businesses, enterprises and government institutions buy new computers from reputable sources and demand genuine software.” Microsoft’s recent push toward software subscriptions, namely Office 365, may help turn the tide.

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Originally published on eWeek.