How to Combat Software Piracy: From Reaction to Revenue Recovery (
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Software piracy is not a new issue for software vendors. After all, software is valuable intellectual property. However, in different segments of the software market, the strategies and opinions on how to combat the software piracy issue can be very different. Here, Knowledge Center contributor Victor DeMarines explains the stages of an anti-piracy strategy, and how software vendors' strategies evolve from denial and reaction to realization and revenue recovery.
As
someone who has spent a lot of time discussing piracy with the ISV
community and researching the piracy scene, I believe what a software
vendor does to combat piracy is directly proportional to its knowledge
of the piracy scene motivations and its own piracy activity trends. In
fact, you can group how software vendors respond to piracy
into three stages: Denial, Reaction and Realization.
Let's explore each of these stages in some detail:
Stage No. 1: Denial
The belief that people who are downloading pirated software would
never pay for it. If there is a piracy concern, then vendors at
this stage only address overuse within their customer base and not the
potential issues of overt piracy (unlicensed use).
Stage No. 2: Reaction
The focus here is to respond with techniques that
target the piracy groups themselves (for example, legal takedowns,
homegrown software protection, planting dummy software in peer to peer
sites, etc.). It is often an emotional response to the very visible
piracy groups that target the vendor's products. This
can include more intrusive licensing approaches such as hardware
dongles and activation, and may use technology that risks impact
to customers.
Stage No. 3: Realization
Vendors in this stage focus on the users of pirated
software and use business intelligence (BI), reporting and schemes
that consider piracy viral marketing. Advanced methods include data
gathering to identify organizations targeting pirated software, and
then integrating this information into the legal and sales process.
An example of this relationship can be seen in the PC
gaming market, perhaps the segment with the most piracy experience.
Plagued with piracy, software game vendors turned to
ever-escalating software protection techniques to combat the
threat. Vendors deployed more and more anti-reverse engineering
countermeasures, trying to stay a step ahead of the cracking
community that was part of the piracy scene. These technologies ranged
from traditional anti-debugging methods to more invasive protection
using virtual machines and device driverswhich drew wide consumer
criticism. One of the most egregious examples of this was the Sony BMG
Digital Rights Management (DRM)/rootkit scandal.
Eventually the industry (for the most part) dropped
intrusive protection approaches in favor of gradual piracy detection
and response mechanisms, and server-based activation. In addition,
the game industry recognized that piracy was a part of business and
optimized its launch plans to maximize revenue within four
weeksthe time it takes crackers to break their copy protection
approach.
This final stage for gaming vendors captures what I
call a final realization to focus on capturing the user revenue
versus carrying on a countermeasure war with the crackers. Some online
gaming companies have moved away from client software protection
techniques to full server validation to catch fraud. In this scenario,
the gaming company simulates game play on the server, then determines
post-game whether the results were suspicious and impossible for a
human to match (game bots).
Turning to the high-value software vendor market
segment (Product Lifecycle Management (PLM), EDA, engineering software,
etc.), I would argue that the software vendors in these
industries are at the initial stages of an anti-piracy
process: denial or reaction. They differ significantly from
gaming vendors, not only on the per-seat price point
($15,000-$30,000), but because their software is
experiencing recent increases in piracy rates due to demand in
emerging markets.