Infection from pirated software will cost consumers $22 billion and 1.5 billion hours in 2013, estimates a study by the world’s largest software maker Microsoft and leading global market intelligence services firm IDC. The implications are larger on an enterprise level as IDC expects organizations worldwide to incur costs of $114 billion to deal with counterfeit software. Losses as a result of data breaches are estimated at $350 billion.
According to the study titled The Dangerous World of Counterfeit and Pirated Software, 1 out of every 3 consumer PCs that have pirated software installed will be infected by malware in 2013. From a consumer perspective, counterfeit software is most likely to slow PCs down, spam PCs with pop-ups, infect PCs with viruses or in worst cases even require hard drives to be reformatted.
Websites and P2P networks continued to be the top source for pirated software. Acquiring software in physical media from street markets and borrowing software from others also emerged as common channels through which pirated software is circulated.
Microsoft’s study also noted that CDs bought from street vendors had a high chance of not working at all, infecting PCs with viruses or containing additional software that would connect to the internet once installed, leading to malware infection. The report also advised users to watch out for online deals that were too good to be true. Websites offering software downloads for a price that is a fraction of its original costs may be looking to lure users into installing counterfeit software which is loaded with malware.
A unique threat of infection via pirated software exists in markets like India where users who prefer to buy assembled PCs may not know the origin and source of the software that has been installed in their new purchase.
The financial implication of having a PC infected by malware or virus emerged to be larger than simply having to reformat hard drives or investing the time and energy to disinfect it. IDC’s findings revealed that 29% of consumer respondents feared identity theft, which is known to lead to electronic financial fraud.
“Some of this malware records a person’s every keystroke — allowing cybercriminals to steal a victim’s personal and financial information — or remotely switches on an infected computer’s microphone and video camera, giving cybercriminals eyes and ears in boardrooms and living rooms” said David Finn, Associate General Counsel, Microsoft Cybercrime Center.
So what should every day Indian PC users and consumers beware of?
Buying legitimate software from authorized dealers is recommended. Developers and e-tailers now allow users to purchase software online and install via instant downloads. A broadband connection allows users to download software in a matter of hours if not minutes. The financial and emotional frustration caused by loss of data may not be worth the rupees saved in the long run.
Counterfeit software posed a greater risk to enterprises and organizations from a cost perspective. The study estimated that organizations will spend $114 billion in 2013 to deal with malware and other related infections that were a result of counterfeit software. This approximately translated to 8% of total IT labour costs for an enterprise.
IDC estimated that it costs organizations globally an average of Rs. 50,000 in labour, external costs and share of IT resources to identify and repair every incident of infection from counterfeit software.
It is estimated that the costs incurred by organizations worldwide for dealing with loss of data that is a result of infection from counterfeit software will balloon into $350 billion in 2013. The cost elements associated with combating malware on an enterprise level included ballooning labour costs to identify and prevent future infections, third party support, system downtime, cost of data theft and potential fraud. These cost elements have the potential to climb up into income statements as noticeable figures.
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