Intuit made history with TurboTax this year. for the first time, a company that commonly gives its software away for free tried to force its customers into a restrictive activation scheme. Intuit buckled after receiving a barrage of complaints and a couple of lawsuits, giving the official excuse that the company did not realize the additional revenue it expected.
In fact, Intuits revenues grew nearly 25 percent after it enacted product activation. Its a nasty paradox: Product activation both annoys users and brings in more money. To its credit, Intuit will forgo the revenue jump in future versions of TurboTax.
Other vendors might not be so smart, though, and that will mean headaches for corporate IT. Symantec products, for example, include an activation scheme. Adobe is going to start putting activation in future products, starting with Acrobat 6 this summer. Others surely will follow.
The vendors are following the lead of Microsoft, which implemented an activation policy in Windows XP and Office XP. The scheme led to a wave of trouble tickets for IT departments, the complaints of which, in turn, led Microsoft to loosen up the activation and provide Volume License Product Keys.
Microsoft made the right moves for corporations, but for consumers, the headache is still there. An untimely Microsoft Office activation situation once got me to uninstall Office on five of my systems and switch to StarOffice for a few months, and as a software evaluator I dont even have to pay for the Microsoft software! I now use both interchangeably and wait for the day when StarOffice and OpenOffice are more than simply "personal protest" solutions.
I believe every company has a right to protect its assets. But activation as implemented is a horribly wrong way to do it. Activation explicitly tells customers that they are not to be trusted. Activation breaks what should be a synergistic community relationship between vendor and consumer and treats every consumer as a potential criminal. In the enterprise, even though not every vendor uses product activation, some organizations are forced to pay for specialized software to help manage software licensing schemes that should never have been there in the first place.
The rationale behind activation is not far removed from the infamous dongle. Back in the late 1980s and early 1990s, many products shipped with a dongle, which was a key that plugged into the parallel or serial port. Besides the fact that many dongles disabled printers, even when the dongles were equipped with pass-through port capabilities, dongles were a terrible idea from naive businesspeople who thought they were protecting their assets.
Vendors should view CDs as a software distribution method and not a data security mechanism. Macrovision, the most popular provider of software protection schemes (and the company that helped put those ugly copy protection bars on VHS tapes), was Intuits short-term choice for activation and has several DRM and software protection schemes. Unfortunately, Macrovision forces organizations to purchase FlexLM—its license manager—to manage activation.
There is a better way. First, vendors should drop restrictive activation policies immediately. Then they should offer customers incentives to register. For example, customers who register would get additional product features turned on as well as software updates. Right now, I can copy a CD illegally from most vendors and get all the product updates I want without having registered in the first place.
Second, give away enterprise software license managers for free. These shouldnt be the expensive packaged applications that need to be supported by an IT pro. They should be lightweight applications that run as a service or a process in any operating system. All the apps need to do is verify that a product is licensed.
Third, vendors should look to the ASP model for guidance. Adobe, for example, has free PDF conversion utilities available to anyone. Why not have a more complete version of an application available online to registered users?
Vendors need to find a way to ensure compensation without making life miserable for their customers. They should remember that in most cases, they grew large from small beginnings, thanks to few restrictions on software. Vendors should also remember that the money isnt in the bytes on disk. The money is in the service behind the bytes.