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Piracy sends IT sector adrift

Counterfeits deter firms from outsourcing to Cambodia, Microsoft official says.

WIDESPREAD soft-ware piracy is deterring foreign companies from working with Cambodia, Microsoft Corp’s country director said as an international report showed Tuesday that the value of unlicenced software worldwide has hit US$51.4 billion.

The sale of counterfeit computer software – which includes programs such as Windows and the Adobe Creative Suite – is considered prevalent throughout the Kingdom.

“The software companies which are interested in outsourcing are concerned about the security [of their products, and] thus wouldn’t choose to work with the Cambodian software companies”, Microsoft’s Country Manager Pily Wong wrote in an email Monday.

On Tuesday, a report from Washington-based Business Software Alliance (BSA) and market researcher IDC showed that piracy rates increased 2 percent worldwide last year, from 41 percent to 43 percent.

Although Cambodia was not included in the BSA report, Vietnam was reported to have an 85 percent piracy rate, representing a commercial value of $353 million in PC software, and Thailand a 75 percent piracy rate, representing $694 million.

According to a 2007 report by the International Data Corporation, provided to the Post by Microsoft, around 95 percent of the Kingdom’s software was fake, causing $47 million in losses to the sector.

Microsoft believes that continuing concerns over the poor enforcement of intellectual property rights has led many international software firms to avoid entering Cambodia.

Pirating software means the developers are not compensated for their work, Pily Wong said, slowing development of a domestic software industry.

“It gives a bad image of Cambodia to the international community. People would not invest in a country full of ‘thieves and pirates’,” he wrote. “We will always be technologically behind if there is no incentive for improvement of skills and innovation,” he added.

He says increased enforcement of intellectual property protection could boost earnings among distributors and retailers, generate increased tax revenue, and boost Cambodia’s information technology sector.

“Without the necessary support and incentives to reward software entrepreneurs and investors, rampant piracy will simply kill off innovation,” BSA manager Roland Chan added via email on Monday.

Some domestic firms hope to stem the use of pirated software. Development Manager for Blue Information Technology, Aeng Sopkaea, said that his firm experienced minimal losses due to piracy of its range of small business accountancy programmes, despite prices starting at $600. The firm relies on the software’s complexity to prevent counterfeiting, he said.

Assistant manager of Singapore-based ICT consulting firm Deam Computer International Limited, Than Tzin, acknowledged that piracy is still prevalent among home users in the Kingdom, but said the practice had been in decline among businesses since “about 2003 or 2004” when stronger anti-counterfeiting measures became increasingly common.

Security risks have also been highlighted by industry experts. Phnom Penh-based ICT security consultant Bernard Alphonso wrote in an email Monday that pirated titles often come with viruses preloaded, and that users do not receive security updates to defend against exploitation by hackers.

Ly Phanna, director general of the Ministry of Commerce, speaking earlier this year, said that Cambodia has four main Intellectual Property laws in place: one concerning trademarks; a law on patents; a law on copyright; and a law on plant variety protection.

However, Secretary General of the National Information Communications Technology Development Authority, Phu Leewood, said Tuesday that police confiscation of suspected counterfeit software is only undertaken in response to specific complaints, and only on a case-by-case basis.

“If we don’t receive complaints we can’t do anything,” he said.

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