‘Software is a strategic business asset’

Over the past two decades, IT innovation has been an

important agent for change in India. It has helped raise incomes, improve quality of life and drive social and economic development. ?India has a clear opportunity to further boost its IT competitiveness with policies that promote technology innovation by bolstering intellectual property protections,? says Robert Holleyman, president and CEO of the Business Software Alliance. During his 21-year tenure as head of the multinational IT industry group, the software industry has grown more than fivefold; its annual sales now exceed $310 billion, making it the world?s largest copyright industry. He was appointed by the US President Barack Obama to serve on the President?s Advisory Committee for Trade Policy and Negotiations, the principal advisory committee for the US government. While in New Delhi last week, he sat down with Sudhir Chowdhary and discussed opportunities to accelerate technology innovation in India by strengthening intellectual property protections and lowering market-access barriers. Excerpts:

The IT sector has been powering India?s remarkable economic rise, but much needs to be done in areas like IT infrastructure, business and legal environment and government support for industry. What are your views in this regard?

India is a global IT powerhouse. That is one of the great stories about India and that?s one of the great opportunities for the country going forward. Every two years, BSA releases a study about IT competitiveness among nations. We develop it with the Economist Intelligence Unit. In this year?s study, India moved up 10 places in the global IT competitiveness ranks for its strengths in human capital and R&D. This study also shows there are opportunities for improvement in infrastructure which are already underway through government investments. This type of investment in infrastructure, combined with advances visible in R&D, and filing of patents will really further accelerate the pace of growth in the IT industry.

Give us a sense of your ongoing efforts to establish a legal framework for cloud computing technologies.

Cloud is a huge opportunity for the software industry. Also, it is a huge opportunity for the Indian software industry because as a new kind of IT infrastructure there are going to be apportunities for distribution of software and different services through the cloud that would really provide opportunities for Indian software companies to provide service and gain entry into markets that previously have not been available in the evolution of this industry. Both the US and India have shared interests in this area?and there is a clear opportunity for Indian and US governments as the two leading nations behind the software industry to try and set up policies, globally, that will allow the software industry to grow and expand. All of the companies are making significant investments in innovation around the cloud. We know that it is the fastest growing form of software distribution. But it is still a minority but we think it will grow in rapid importance.

What we are trying to do at BSA is to help governments including India, US and other markets understand the needs for building a common framework around the way data is transported across borders and to develop regimes that prevent the imposition of market access barriers. We are also working with partners to get the right policy framework for issues like security, privacy and data exchange so that the efficiencies of the cloud can be really brought to bear in the global market place.

Is the use of pirated software on a decline in India?

We have seen examples, including here in India, of software piracy rates coming down. In the last several years, software piracy rates have declined to 64% in India. Of course 64% is still quite high. It?s higher that I think anyone in India would like to see. But what we have seen are partnerships with the Indian government really focused on the specific nature of software piracy and software products.

The majority of piracy in India, the US and other markets happens within otherwise legal businesses that are using software every day for their productivity?as a tool of production?but too often than not aren?t properly licensed.

So led by India?s department of information technology and followed by several of the Indian states, there have been partnerships focused on to bring the message to businesses about the need to respect copy right, to fight against software piracy and to build the kind of productivity that legal software can bring to an enterprise. With such partnerships continuing at an accelerated pace, I think we can see piracy rates in India come down substantially and that?s what we are here to encourage.

Is India moving towards tougher IP theft laws? Are policies being put in place for data protection?

We think specialised intellectual property (IP) courts would be important for expediting processes around IP, for specialised training of judges, and to provide a deterrent against forms of piracy. In the end, such measures are important for protecting the software.

Data protection is an issue that really gets us back to the subject of cloud computing and the ability to protect information held by customers. India has an important role to play in the global marketplace around discussions of how data can be protected, and how that protection can flow across borders in ways that facilitate commerce. So the two issues are related but there are different nuances related to each.

What measures are the need of the hour to strengthen India?s IT ecosystem?

The key issues are to allow innovation to occur with governments avoiding imposing technology mandates that would harm the ability of the best products? whether it is software that is proprietary or open source or mixed source?to grow and to meet customer demands. The government should provide a sound foundation instead of picking winners and losers.

Secondly, the government should have the right rules to provide protection?ensuring those rules are enforced because the incentives provided by software proprietary are critical to future innovation. And finally, the government?and this is particularly important for India in partnership with the US government at this time?to work to define the roles going forward in terms of how new computing architecture like the cloud will be treated. And if those rules allow software to compete in the market, whether it is of Indian or American origin, then cloud will be successful.

We have to work together to avoid the imposition of market access barriers that might try to block software services and data to be transported across borders. This is a big opportunity in the next couple of years and the decisions that are made internationally will affect the ability of cloud companies to continue innovating going forward.

What is the relevance of software asset management to Indian enterprises?

Software asset management is a critical part of managing the software within an enterprise. Software is a huge asset. It is directly linked to productivity, security of the computer network. There are a series of best practices that governments and enterprises need to adopt to ensure that they get maximum productivity from that key asset?and also to ensure that they are respectful of the copyright law in India and have the efficiencies through sound software practices.

What recent steps has BSA taken in this regard in India?

We work closely with the department of IT to look at how software is managed within the government. A government that uses the software in any country needs to manage their software carefully?to ensure that the software is licensed, to use best practices, and to lead by example. That?s happening here in India and I am optimistic about where that moves forward and also some of the best practices that are being adopted by Indian industry that would be important for both domestic and as international model.

In addition to the department of IT at the national

level, we are working closely with three state governments?Maharashtra, Karnataka and Andhra Pradesh. These are examples of how governments are reaching out to the private sector to talk about how software assets are managed, providing systems to connect the use of IT within those enterprises with productivity and to raise the importance of IP protection and its link to innovation in those states.

?Buy the hardware, software is free? seems to be the common perception here. How can this be changed?

That is the perception that is too often the case. The point that we make, and I do think that it is the point that is understood in India because the software industry is such a big part of the Indian GDP and India?s future is that IP software is an asset and it needs to be respected as an asset just like a tangible hardware is respected.

And there are more opportunities for engineers and the people working on the software industry in India that will result from higher levels of protection of IP in India. It is important not only domestically but because Indian engineers are huge part of global software business. Not only Indian companies, but multinational companies employ thousands of Indians in developing the code and new product. This is really a shared interest.

India has an interest in tackling the problem of software piracy around the globe. When there are countries, China for example, that have high rates of piracy?high dollar losses directly impact the ability of companies to grow and hire more people in software here in India, just as it does in China. So the partnership really is for both the domestic market. But really this linkage between these two software power houses in the Indian software industry and multinational or US software industry that act in support of IP and fight piracy whenever and

wherever it occurs.

What measures have you suggested to the Indian government to promote legal use of software?

To follow the example of what we are seeing at the department of IT, about how government leads by example of managing its own software, and how government can take this example directly to private enterprises. This has happened in three states and more to come and by recognising that a lot of awareness needs to be made about the type of tools and practices that good responsible businesses could provide to ensure that their software is legal.

When I talk about software piracy?globally as well as in India?piracy in businesses/enterprises is the most common cause of software piracy in anywhere in the world. It is often the case that the business might have grown from a 100 to 200 to 500 employees but they have not got the licenses for software for all of those employees. That?s a violation of law but most importantly that is failure of that business to recognise that the software is a key asset and proper management practices will allow that so that they can manage that asset to again efficiencies and really secure their networks and have good control over their processes.

Best practices are now being deployed here in India that we think will be successful here but also be good models for other countries to adopt.