A pirate's best friend

Kripa Raman

FOR every item of the accounting software Tally that is sold by its manufacturer, there are nine pirated ones that exist in the country. This product, from the Bangalore-based Tally Solutions, is the highest selling accounting software in the country. But more Tally is used in the country than the company itself has ever brought out.

Tally Solutions is openly reconciled to it, and indeed has modelled its plans, going ahead, based on this unpleasant inevitability. Unlike, say the likes of the giant Microsoft, Tally, which fully knows its products are being pirated left, right and centre, does not pursue its pirates with the help of the Business Software Alliance, the police and the National Association of Software and Services Companies.

''Our surveys indicate a 90 per cent piracy rate of our products,'' says Bharat Goenka, Managing Director, Tally Solutions Pvt Ltd. ''And, we believe this impacts our turnover to the extent of 300 per cent to 400 per cent, that is to say, our turnover could/should have been three to four times its current levels.''

The Indian software industry, often ridiculed for not having enough successful products (as against services) to its credit, says the domestic user must change his mindset if he expects his software companies to generate products for him. The experience of companies which have brought out products has not been a happy one at all.

Some hard truths

First, the Indian customer will, more often than not, go out of his way to procure a pirated version of the software he wants. Second, the Indian customer is not yet of the mindset when he feels something as unpalpable as information or software must be paid for. If he can avoid using software that he cannot pirate, he will try to, say companies.

The fact that software has become very expensive, too, only makes matters worse. ''Although the cost of hardware has come down, by the time one installs software as well, the costs double,'' says Vipul Jain, Managing Director, Kale Consultants. Kale does have some products of its own, but they are heavy duty products - not off-the-shelf ones - that have to be followed up with service from the company and not feasible to pirate.

The reluctance of the user to pay for software is not always related to his ability to pay. By group-user standards, Tally is not particularly expensive, say distributors. One version, TallySilver, costs Rs 22,500 for a single-user version, while the unlimited multi-user edition of TallyGold costs Rs 45,000.

Tally Solutions, in fact, has been able to take the dent from piracy in its stride. It has a few high-profile industrialists as investors and has pretty deep pockets. In fact, it has a very clear plan for the long term; in addition, Tally is also being used by the multinational and large established Indian corporate sectors. It also has plans on the export front. The problem, however, is acute when a product is largely suited for small office home office (SOHO) or the small and medium sector and when the manufacturer does not have deep pockets.

Legal but unattractive

''The Indian public does not want to pay for legal software,'' says Pune-based Sanjiv Mehta, Managing Director, Cirrus Technologies Pvt Ltd, who says his company is one of the largest distributors of multilingual and niche products.

Sanjiv Mehta had invested Rs 40 lakh in developing a product called India Speaks, which he launched a year or two ago. This single product was a learning programme for a dozen Indian languages. The unique thing about this product, says Mehta, is that any Indian language could be learned through any other Indian language as well as through English.

But the product, covered as a ''hot product'' by several publications and reviewers, and priced at just Rs 2500, bombed in the market. The Indian consumer, who would easily pay Rs 500 for a book or a dictionary for his office or organisation or home or institution, was not willing to pay Rs 2500 for a dozen languages.

Mehta says his research was done well: ''There are so many products which teach French through Spanish or Spanish through French and the like. We brought out this product under the assumption that people are becoming more and more mobile and that there is potential in the country. We took into account the number of NRIs as well. Even 10 per cent of the potential market would have done for us. We did not have any doubt about market potential.''

But there was one place where he went wrong, feels Mehta. ''We did not take into account the fact that the customer would not pay. The market is not willing to pay.''

The Rs 500-barrier

According to Mehta, who has many years' experience in distribution of software, the average Indian user is not willing to pay for any software unless it costs below Rs 500. ''How do I reach out with such a price, how do I advertise or promote my product?''

Mehta tried to co-brand his product: ''But when I do this, I am basically doing a barter deal.'' Now, he says, he plans to relaunch his product.

According to him, as a distributor, he cannot name any Indian product other than Tally (which itself says it pays heavily for piracy) which sells well in India. Even EX the accounting software from Tata Consultancy Services ''has tremendous recall, but distributors are not able to sell accordingly. And we are talking about TCS which has all the money in the world. What about the rest, then?'' Pirated versions of EX too, are easily available in the market.

Products now increasingly come with locks, but the locks are broken by software pirates. In fact, this is exactly what Microsoft has sought to counter with its latest XP launch. It involves registering one's product with the company through some key numbers; the product also gets disabled if repeated copies are made. However, despite this, there were x worldwide reports when XP was pirated and released on the Net even before its official launch. For Microsoft, the problem is not so bad. In the West, at least the majority will pay for products. In India, the majority is unwilling, says the vice-president of a software company.

Disillusionment complete

Some years ago, a gentleman by the name of Sudhir Kadam won an award from CSI for the best shrink-wrapped application of the year, says Harsh Kumar, Advisor, IT, with Hindustan Petroleum Corporation Ltd, and himself a CSI member. This product was an office application. ''He just could not sell it,'' says Kumar.

''Distributors were hammering him down, finally he offered the rights for a song to some other company. Poor fellow, that company tried to hammer the price down even further till it came to the ridiculous level of Rs 50,000 or something.'' Kumar says his friend Kadam left the country in disgust.

Kumar himself has invented a software that enables one to use several Indian languages on the computer. One uses the Roman letter keyboard, as for English, but gets Indian language fonts on the screen.

Kumar called it Shusha; this product, he says, does not call for any reprogramming. But he decided he would not bother to sell it. He offered it free to just about anyone who would take it. ''Some of us used to go to these IT fairs and distribute copies to all who asked for it.''

Another product company, MicroWorld, which has an eScan software product as well as anti-virus software, is in a rather different area, one that is not very attractive to pirates, and has managed to appoint some 10,000 resellers and distributors across the world. It bundles its products with others.

For example, VSNL is offering these products bundled with all its ISP CDs.

Pirates wreak havoc

Software piracy works against growth in several ways, says Bharat Goenka of Tally. Piracy has increased the company's costs of sales dramatically, which again has a negative impact on sales.

''It affects our ability to create a high-class customer support service, since people requesting service are viewed suspiciously (after all, nine out of 10 are expected to be using pirated software) - which will always tend to annoy the legal customer.''

Also, says Goenka, developers have to spend expensive time and energy in devising ways to protect their software ... and the expense is finally borne by the genuine software buyer.

It also spreads an unfair reputation about the ability or disability of a software since the absence of training and support centres creates wrong knowledge which spreads. ''It stops innovative pricing benefits and schemes from being created, since developers feel that humanity, at large, is cheating them anyway.''

Finally, says Goenka, it reduces creative enthusiasm for on-going product development since the risks and efforts do not get compensated fairly. ''All in all, a bad business.''

The larger, especially foreign, players are constantly arranging for police raids to be made with the help of the Nasscom-BSA anti-piracy alliance, says the head of a small IT company. ''You hear of copies of Adobe, Coreldraw, Microsoft products and overseas DTP software having been seized. But one seldom or never hears of Indian software copies being seized. The smaller players seem to be left out of this and have no one to turn to.''

kripram@thehindu.co.in

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