New compliance and accounting regulations are helping to drive down the number of firms who use unlicensed and counterfeit software, according to Microsoft.
In an interview with silicon.com, Microsoft UK MD and European VP Alistair Baker said the tightening of company audits is forcing businesses to be more accurate and transparent about the software they use.
"Governance is changing the way companies think about software as an asset and how they account for it with auditors," he said. "If somebody has unlicensed software, that is a liability."
Baker said Microsoft has seen an increase in the number of companies asking it to conduct a software audit as a direct response to new accounting requirements.
However, while licensing compliance is getting better at the top, Baker said there is still are still problem at the small and medium-sized business end of the market and with dodgy resellers who do hard-disk loading and sell counterfeit products.
"With enterprise and middle market customers governance requirements are now very tight," he said. "In small business there are millions of customers so therefore there is a higher percentage of piracy."
But Baker argued that new protection measures have helped drive down piracy of Office 2003, particularly in the consumer and small business market.
Research from anti-piracy body the Business Software Alliance in July claimed software piracy is costing UK businesses £860m, with almost a third of software across all organisations being unlicensed.