We're on a hard drive to tackle piracy

SCOTS firms must continue to be vigilant over software piracy to safeguard their own economic wellbeing and the country's.

The trade in illegitimate software is big business and carries with it great risks.

Then there's the cost to a hard-pressed company's pocket and bottom line if they get tangled up in an investigation.

Teams of investigators are engaged in a series of visits throughout Scotland to PC shops, resellers and online auction sites suspected of hard-disk loading, or other forms of piracy.

In Glasgow, a clampdown on the sale of counterfeit software involved three years of investigations into 12 firms, resulting in court proceedings and settlements of up to £75,000 each.

The Office for National Statistics has revised its calculations upwards, as to the contribution that software makes to the UK economy.

Global market intelligence outfit IDC estimates that the UK software industry is currently valued at around £40 billion, but that a whopping 27 per cent of sales are counterfeit.

IDC further calculates that a ten per cent drop in piracy rates in the UK - worth £11bn - would generate 34,000 jobs plus £2.8bn in tax revenues between now and 2009 for Treasury coffers.

Hard-disk loading is a practice where PC vendors charge multiple customers for software copies - but provide a licensing agreement valid for only one copy.

My colleague Michaela Alexander, Microsoft's UK head of anti-piracy, reports that we're talking about a small number of IT vendors placing customers at risk of unwittingly running illegal copies of software.

The current action plan also involves education - through local trading standards offices - to help customers fully comprehend the dangers of counterfeit software.

Also, we began working with eBay last August, and the online auction site has so far removed more than 35,000 suspected illegal sales items - at a rate of 200 bogus software sales per day on eBay's UK website alone.

The crackdown is aimed at the small resellers and system-builders who undercut genuine IT companies and shops by selling pirated Microsoft software.

It's about cutting the problem off at source. An estimated two-thirds plus of PCs shipped in the small system-builder market are without genuine copies of our software.

It's not only about cutting our own piracy losses, but about protecting our legitimate partners who face being undercut by those selling pirated products.

We must not allow the honest system-builders and IT companies in Scotland to be driven out of business by the illegal activities of unscrupulous traders. Neither do we want to see customers duped by illegal trading.

• Raymond O'Hare is the director of Microsoft in Scotland