Software Piracy Pummels Florida to the Tune of $490 Million

ORLANDO, Fla., March 16, 1999 — Microsoft Corp. today released economic data showing that in 1997 software piracy caused the loss of more than 7,000 jobs and roughly
$490 million in combined wages, tax revenues and retail sales in Florida.

The information is being released as part of a national education effort by Microsoft to raise awareness that software piracy hurts more than just the software industry. The data shows how software piracy – the theft of software through illegal copying of genuine programs or through counterfeiting and distribution of imitation products – adversely affects local businesses and economies, in addition to undermining the value placed on people’s ideas.

“Florida, and particularly Orlando’s I-4 High-Tech Corridor, is one of the nation’s leading information technology centers,”
said Jacob Stuart, president, Orlando Regional Chamber of Commerce.
“The IT industry is not only a significant source of employment and wealth for the Orlando regional economy, but also an invaluable source of innovation and development for the global economy. It is vitally important that we protect the intellectual property that is produced and utilized here if we are to see growth in the digital age continue unabated.”

According to Microsoft, the 7,186 jobs lost to software piracy in Florida translated into more than $193.5 million in wage and salary losses. In addition, the data shows that the region lost more than $248 million in retail sales and approximately $49 million in tax revenues that could have instead contributed to federal and state improvement projects. International Planning & Research Corp. (IPR) of Redmond, Wash., used data from a 1997 international piracy study published by the Business Software Alliance (BSA) and the Software Publishers Association (SPA).

The significance of this data is underscored by the competitive difficulties many businesses throughout the state say they have faced as a result of software piracy.

“I lose about 20 percent of my software business annually to unscrupulous resellers that care only about making money quickly and illegally,”
said Steven Thomas, vice president and general manager of Tampa-based Bay Resources, one of the state’s top systems integrators.
“Customers need to understand that if they see a price for a software product that seems too good to be true, it probably is. Pirated products can cost more in the long run, with loss in productivity due to a lack of service and support and the presence of bugs and viruses.”

Florida has a piracy rate of 32.3 percent, which means that nearly one in every three software programs in the state is an illegal copy, according to the IPR study. Microsoft announced the data in conjunction with Microsoft® TechNet, an event being held in Orlando on March 16 that brings together customers and channel resellers to discuss technology implementation issues.

“The economic impact of software piracy is far-reaching in Florida, amounting to millions of dollars in lost retail sales, tax revenue and job wages,”
said Sandy McCarthy, Microsoft general manager for the Gulf States District, which includes Florida.
“This is not a victimless crime. Software pirates not only sap the Florida economy, but they make it harder for small, high-tech entrepreneurs to blossom and grow into healthy businesses with strong employment opportunities. It’s a vicious cycle, one that Microsoft intends to break with the help of others in the industry.”

McCarthy added that Microsoft is working with its partners in Florida to raise awareness about the need for companies to better manage their software assets to reduce the risks of piracy.

“Businesses and universities can protect themselves from the risks associated with illegal software by shopping smart and by taking licensing seriously,”
said Jana Hambruch, Southwest Florida regional manager for EduTech, an organization that contracts with universities across the state, including Florida Gulf Coast University and University of South Florida, to provide computer technical training.
“An effective software asset management program can reap tremendous rewards. Organizations can save untold time and money, improve efficiency, shield themselves from legal liability, and protect their reputation as an ethical operation.”
Hambruch added that having been a computer reseller for 10 years before joining EduTech, she continues to work with more than 200 accounts to educate them on how to make informed software purchases.

The software industry is a significant driver of the current economic prosperity in the United States, accounting for the creation of more than 2 million jobs, $102.8 billion in software and software-related services, and payment of $7.2 billion in taxes. However, software piracy threatens the ability of the industry to continue to contribute to the American economy. According to a 1997 study by Nathan Associates Inc. of Arlington, Va., commissioned by the BSA, software piracy in 1996 resulted in the loss of 130,000 jobs in the United States,
$5.3 billion in wages and salaries and nearly $1 billion in tax revenues.

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft anti-piracy hot line, toll free, at (800) RU-LEGIT (785-3448), or send

e-mail to piracy@microsoft.com. More information about software piracy can also be obtained by calling the Business Software Alliance anti-piracy hot line at (888) NO-PIRACY (667-4722) or sending e-mail to software@bsa.org.

Founded in 1975, Microsoft (Nasdaq
“MSFT”
) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

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