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Story so far: During the course of working along with the marketing department in my company, I visit a design agency. There, I find teams busy on various ad and movie assignments oozing with money. The only hitch, I notice, is that they are not using legal copies of software. I find it tough to digest piracy, especially when somebody else's intellectual property is put to profitable commercial use.

Episode 93

The nagging thought I'd left with you last week was whether piracy was acceptable in companies that earned neat sums using copied software in their jobs. "Dear Swati, the issue of blatantly pirating software and being pleased as punch about it is a sign of a serious character flaw in Indian society," writes Vinod Reddy, CEO of CK Technologies. "We envy a person who can afford a Rolls Royce, and choose to steal that car when it comes to transporting oneself. The `right' thing to do is to have used a vehicle that one can afford — a Maruti or even a motorbike." Not `to each according to one's greed', I agree.

"What Kadir, the head of the design house in your column, should have done is to have bought less expensive (and perhaps less featured) alternatives to Adobe software for the bulk of the computers in his office, and perhaps bought just one or two licences of Adobe for the few jobs that his less expensive software cannot do." Useful suggestion, that is.

"We at CK Technologies, part of the TeNeT Group at IIT Madras, have realised the hard way that even though we have developed an inexpensive alternative to MS Office, with enough features for 95 per cent of all users, we have a hard time convincing companies to buy it for a trivial price, since many Indian owned/managed corporates get their MS Office for free!" How sad!

"You get a way with a small crime today, and you will be encouraged to commit a bigger one tomorrow. Another reason for piracy being rampant in India is the high cost of quality software. Based on `purchase price parity', an office suite that costs $450 in the US should be priced at less than Rs 3,000 in India. But in reality the most popular office suite is priced ridiculously high at Rs 20,500. How many Indians can afford to buy an office suite at that price? India's requirement is low cost software tailor-made for India. The software industry needs to learn from the example set by the pharma industry where equal quality drugs are available at much lower prices than in the West." Bitter medicine but I'm sure it would work.

"Dear Swati, though piracy is not acceptable generally, it is more so for a company which can afford to pay the fees," reasons M. Radhakrishnan. "It is an accepted fact that companies in the West spend huge amounts for development. However, the charges are exorbitant for an average Indian company to buy the licensed copy. Hence, we resort to using pirated copies." That doesn't wash off the sin, does it?

"Further, we are encouraged by the fact that the laws of the land are not very strict in punishing the offenders. Laws by themselves will not deter people from committing unlawful or illegal activities, but effective punishment will. The same is the case for pharma, music industries to name a few. Therefore, western companies should understand the psyche of Indian entrepreneurs at the time of fixing the fees for licensed products to ensure effective compliance." A realistic price may promote compliance, you argue. Worth a try, I'd say.

"Swati, in some ways, one could compare software piracy to making photocopies of a book and using it, instead of purchasing the book," notes a mail from M. B. Gowrishankar, Santa Clara, US. "But in the case of pirated software, the pirated version is no different than the original, unlike the book. So, the original software loses its value. This is what hurts the original creator of the software the most. Eradicating software piracy could be a difficult, if not impossible, job for the law enforcement agencies. Therefore, I believe more resources should be spent on exploring avenues to use technology that will prevent software from being copied illegally." Software would then protect itself!

"Hi Swati, I guess you have touched upon the issue of software piracy quite late," chides Kamal Anil Kapadia, the PwC CA from Mumbai. "It is quite alarming that software companies use pirated software! Anyway, this is India wherein every thing is copied quite fast and even before the original is distributed, pirated copies start selling in the market. You are aware that in Fort area of Mumbai, DVD, VCD and CDs are sold openly and you can get all software plus the latest movies. `First day first show' items are sold here all for Rs 50; also all MP3 songs. Avoiding pirated copy and insisting on a licensed one would be seen as being foolish!" Is there no way out? "The best way to curb piracy is to go to the roots of the same and find out the source, catch the middlemen, agents and so on. Raids by the software cell persons should be made on the companies to check for the software licences. Let's do things on our own, rather than copy what others have done." Hope that works.

"What is important for a customer or client is that their end objective is achieved irrespective of the means or tools used by the design company," writes Anil Kumar Pillai from Kannur. "The design company is interested in getting the work done at minimum cost. Is it very wrong if the company uses pirated software at cheap rates? If it does not, its competitors would use pirated software and they would have a competitive advantage. Where do ethics or values come into the picture here? It would be pure business equation. Piracy is a general phenomenon. Somebody makes the original product; you have the duplicate product introduced in the grey market.

"Of course an injustice is done to the creators of original software. His creative thoughts are available in pirated form. Who can solve this? Regulation can, but only if it is implemented both in letter and spirit. But how?" Competitive advantage or copying advantage, I wonder.

"Dear Swati, although everybody tries to learn software, only a handful goes on to update the knowledge whenever there is any upgradation," is what B. Subramanian writes from Perambalur. "Also, whenever any consumer who buys a PC for his home or office, the vendor loads the necessary software free of cost, to sell the hardware." That's sadly the harsh reality.

"Thus, software that would have cost Rs 35,000 in original, would come for Rs 250-500. This is not only done by ordinary private companies but even those with good brand logos. This being the case, who will be willing to buy a PC today spending for software an amount equal to the cost of the PC? For the honest, cost of system plus software would be nearly Rs 1 lakh! In the episode too, Kadir is too concerned about increasing cost, so tries to curtail it either by way of using pirated software or by using nodes so that it will be enough if they use one server and as many systems they want." Cost cutting at the cost of ethics, I still hold.

"To avoid this piracy, either the software price should be made affordable or the software should be so made that if the original is copied or installed to some other system, it should not work or should stop working after a period of one year or so. For example, when Tally slashed its prices to Rs 5,000, sales went up. Reverting to the question of piracy, let's understand that no force on earth can stop me if I want to be dishonest." So, we've to find a way to make everybody want to be honest!

There's a belated mail from Rahul Anant who had read the FTA story that was carried a few weeks back. "I came across this article today (`Are we too squeezed out to find time for workouts?') while having lunch at the office (Yes the newspaper was spread on the table, in order to save the table from stains. We have ample of them since we are an ad agency!). The caption interested me as I'm a fitness freak, pressed for time in my busy schedule. The article is about FTA and its aftermath for the Indian industry. Being a visualiser in one of the leading advertising agencies I've worked with some FMCG clients.

"But the experience is very disheartening when it comes to standards of quality, taste, packaging, network, and availability. When they talk of fighting MNC brands they are not even ready to spend on photography which was very critical for the quality of packaging design. This attitude of our industrialists will surely prove suicidal and we will be left with only discussions and talks of how foreign brands rule the consumer minds, but never learn from them." One more instance of cutting costs in the wrong places, shall we say?

*********

During the last few days, I've been attending a wedding here, a reception there, of friends and relatives. A lot of waste occurs in these celebrations, you'd agree. One place where it happens on a large scale is the dining hall, I've been noticing. Caterers lay out dozens of items on the leaf or plate. But when people get up from the table at the end of the dinner, I see sadly all those untouched sweets and other dishes. Within minutes, however, the whole thing is wrapped neatly and dumped in a big trashcan where waiting beggars and hungry dogs compete for the consignment. Are we doing the right thing, I ask myself? Send in your thoughts by Friday.

Swati_CA@hotmail.com

For archived episodes of this column click on: http://www.thehindubusinessline.com/nic/swati/index.htm

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