Infographic: The Price of Piracy

Malware on pirated software costs global enterprises more than US$500 billion or S$635 billion annually

New study reports link between pirated software & malware infections

Singapore — March 19, 2014 — Enterprises worldwide are expected to spend nearly US$500 billion (S$635 billion) in 2014 to deal with issues caused by malware deliberately loaded onto pirated software — US$127 billion dealing with security issues and US$364 billion dealing with data breaches — according to a new joint study conducted by IDC and the National University of Singapore (NUS). Global consumers, on the other hand, are expected to spend US$25 billion and waste 1.2 billion hours this year because of security threats and costly computer fixes stemming from malware on pirated software.

The study, titled “The Link Between Pirated Software and Cybersecurity Breaches,” surveyed  a total of 1,700 respondents consisting of consumers, IT workers, chief information officers, and government officials from 15 countries including Singapore and Brazil, China, France, Germany, India, Indonesia, Japan, Mexico, Poland, Russia, Thailand, Ukraine, the United Kingdom, as well as the United States. In addition, 203 computers acquired in 11 countries, namely Brazil, China, India, Indonesia, Mexico, Russia, South Korea, Thailand, Turkey, Ukraine, and the United States were also analyzed by NUS.

It was revealed that 60 percent of consumers surveyed say their greatest fear from infected software is the loss of data, files or personal information, followed by unauthorized Internet transactions (51 percent) and hijacking of email, social networking and bank accounts (50 percent). This was consistent with the results amongst Singapore consumers surveyed who displayed an even greater concern in these areas. 65 percent of local consumers indicated loss of data, files or personal information as the biggest fear associated with infected software, followed by unauthorized Internet transactions (64 percent) and hijacking of email, social networking and bank accounts (61 percent).

However, 43 percent of those same respondents (28 percent in Singapore) do not install security updates, leaving their computers open to attack by cybercriminals.

Government officials expressed concern about the potential impact of cybersecurity threats to their nations. According to the survey, governments are most worried about the loss of business trade secrets or competitive information (59 percent), unauthorized access to confidential government information (55 percent), and the impact of cyberattacks on critical infrastructure (55 percent). In Singapore, government officials polled are most concerned about cybersecurity issues between trading partners (65 percent), the impact of cyberattacks on critical infrastructure (62 percent) as well as the loss of business trade secrets or competitive information (62 percent).

It is estimated that governments could lose more than US$50 billion to deal with the costs associated with malware on pirated software.

“Cybercriminals are profiting from any security lapse they can find, with financially devastating results for everyone,” said Keshav Dhakad, Regional Director of Intellectual Property & Digital Crimes Unit, Microsoft Asia. “Motivated by money, they’ve found new ways to break into computer networks so they can steal your identity, your passwords and your money, and unprotected, non-genuine software provides that easy way for cybercriminals. That’s why at the Microsoft Digital Crimes Unit, we’re focused on attacking and curbing such malicious acts by disrupting cybercriminal networks to keep our customers’ personal and financial data safe and secure, while reducing the financial incentive for criminals. The Microsoft Cybercrime Center, a center of excellence for advancing the global fight against cybercrime, affirms our efforts to work closely with our industry partners, law enforcement and customers to create a safer internet and develop best practices for cybersecurity.”

The study was released today as part of Microsoft’s “Play It Safe” campaign, a global initiative to create greater awareness of the connection between malware and piracy.

Additional highlights from the survey include the following:

• Nearly two-thirds of enterprise losses (US$315 billion) will be at the hands of organized criminals.
• Nearly 20 percent of the pirated software in enterprises is installed by employees.
• Twenty-eight percent of global enterprise respondents and 27 percent of Singapore enterprise respondents reported security breaches causing network, computer or website outages occurring every few months or more; globally, 65 percent of those outages involved malware on end-user computers while in Singapore, the figure is higher at 71 percent.

“Using pirated software is like walking through a field of landmines: You don’t know when you’ll come upon something nasty, but if you do it can be very destructive,” said John Gantz, chief researcher at IDC. “The financial hazards are considerable, and the potential losses could leave once-profitable businesses on shaky ground. Buying legitimate software is less expensive in the long run — at least you know that you won’t get anything ‘extra’ in the form of malware.”

The NUS forensics analysis of 203 new PCs loaded with pirated software found that a staggering 61 percent of the PCs were pre-infected with unsafe malware, including Trojans, worms, viruses, hacktools, rootkits and adware. These PCs, purchased through resellers and PC shops in 11 markets, included more than 100 discrete threats.

“It is hugely concerning that brand new PCs are coming pre-infected with dangerous malware due to pirated software, making the users and companies readily vulnerable to security breaches,” said Professor Biplab Sikdar, Department of Electrical & Computer Engineering, National University of Singapore. “The university’s forensic tests clearly indicate how cybercriminals are increasingly leveraging the unsecure supply chain of piracy to spread malware and compromise PC security in a serious way. We would only recommend usage of genuine software for online safety and cybersecurity.”

This year’s research is an extension of IDC’s 2013 study, “The Dangerous World of Counterfeit and Pirated Software,” differentiated by the attitude of government officials as well as the analysis of new markets, making the economic connection to cybercrime.

Whether an individual user, a small business, enterprise or even a government institution, all are encouraged to buy new computers from reputable sources to ensure they receive genuine software. Microsoft is committed to protecting its unsuspecting consumers from downloading or purchasing nongenuine software that exposes victims to malware that can lead to identity theft, loss of data and system failures. Customers are encouraged to visit http://www.microsoft.com/security to learn more about malware and ensure their machines are not infected; if malware is present, the site offers tools to remove the infection.

More information about the IDC study is available at the Microsoft Play It Safe website, http://www.play-it-safe.net, and the Digital Crimes Unit newsroom, http://www.microsoft.com/en-us/news/presskits/dcu/default.aspx.

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