Testimony from June 15, 1999

Prepared Testimony from Robert Holleyman, Business Software Alliance

Yesterday, you heard Federal Reserve Chairman Greenspan testify that America's technology industry
has not only substantially boosted economic growth in our country, but more importantly, it has
fundamentally transformed the economy itself by making American businesses more efficient, productive,
and competitive than ever before.

Today you are hearing from five CEOs of BSA member companies, who have played a pivotal role in
this economic transformation. In addition to Mr. Gates, from whom you have already heard, these BSA
CEOs are Jeff Papows of Lotus Development Corporation, Bill Larson of Network Associates, Dr. Eric
Schmidt of Novell, and Jeremy Jaech of Visio. These CEOs, together with seven of their colleagues, are
in Washington this week to participate in BSA's fourth annual CEO Forum.

As you have heard Mr. Gates discuss this morning, the U.S. software industry is, without a doubt, one of
the great success stories of modem business history. The industry is among the fastest-growing and most
dynamic sectors of not only the U.S. economy but, indeed, the global economy. Tomorrow, as Mr. Gates
mentioned, BSA's CEOs will release the results of a new study, conducted by the economic consulting
firm of Nathan Associates Inc., that quantifies the direct impact of our industry on the U.S. economy as
well as the indirect, "ripple" effect felt by other sectors of the economy as a result of the demand for
software products. This study, based on industry data collected from 1990 to 1998, examines trend
software industry growth rates throughout this decade in areas such as total industry sales, employment,
and tax revenues generated. Based on these trends, and on economic models of the future of our industry,
the report forecasts extremely robust industry sales, employment, and tax revenues through 2008, the last
year projected.

These leaders of the information age are here to share their vision for America's technology future and to
engage policy makers in discussions on the full range of issues critical to the industry's continued success.
Their agenda- and that of the BSA - can be summed up by four key goals:
1. To tap the unprecedented economic promise of electronic commerce;
2. To promote continued technological innovation through strong international copyright protection;
3. To create more and better American jobs through trade liberalization; and
4. To ensure that legislative proposals before the Congress advance an overall, net-friendly economic
policy.

Policy initiatives before this Congress will have a real and measurable impact on the bottom line of each
and every company in our industry - and that means on the economic opportunities and standard of living
of America's workforce. Let me give you just one example in the area of software piracy.
Through the enactment of specific legislation, the United States Congress armed our nation's Trade
Representative with a powerful tool -- Special 301 -- that has allowed us to identify and take action
against nations which turn a blind eye to rampant piracy of U.S. copyrighted works, including software.
Special 301, combined with the international legal protections championed by the United States and
adopted in the WTO Agreement on Trade-Related Intellectual Property Rights(TRIPS), paved the way
for our industry to aggressively combat piracy on a global scale. As a result, in 1998 alone, BSA was able
to initiate over 12,000 enforcement actions worldwide. These actions, in turn, have had a dramatic impact
on worldwide piracy rates and on the size of the legal software market globally. Let me be specific:
looking at just eight of the world's largest software markets, by reducing piracy rates from their 1992
levels to the levels experienced in 1998, our industry was able to realize nearly $4 billion in additional legal
software sales in just these eight markets in 1998 alone. While piracy rates remain unacceptably high even
in these markets, the pattern of action is clear: solid governmental policy initiatives provide our industry
with the tools we need in order to reduce piracy internationally, and these reductions, in turn,
overwhelmingly benefit U.S. software developers, who are far and away the world's single largest
producers.

Through American ingenuity, technological innovation, and sound public policy, BSA's member
companies and the U.S. software industry have become true global leaders. The result, as you will hear
today, has been increased prosperity for all Americans. On behalf of our member companies, we are
pleased to have the opportunity to appear before you this morning. Thank you.