Revulytics Blog

Do The Right Thing (Software Piracy Edition)

October 31, 2012

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One of the thoughts we often hear from software vendors echoes the famous quote from Bill Gates on software piracy in 1998:

“Although about 3 million computers get sold every year in China, people don’t pay for the software. Someday they will, though,” Gates told an audience at the University of Washington. “And as long as they’re going to steal it, we want them to steal ours. They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.” (emphasis added)

Two things stand out:

  • There is an implied acceptance of the inevitability of piracy in this statement. Even Microsoft - with all of its market and technology power - recognizes that as long as there is software there will be piracy. Microsoft still fights piracy on many levels - technology, lobbying, education - but there is an acknowledgement of its inevitability. It makes sense, then, that “[A]s long as they’re going to steal it, we want them to steal ours.”
  • Bill Gates is a visionary! “They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.” He made this statement in 1998; in 2008, V.i. Labs introduced CodeArmor Intelligence - the first commercially available solution that enables software vendors to identify who is using and misusing their software so they can collect license revenues from them.

Despite this, many software vendors continue to accept the inevitability of software piracy (and how this leads to customer misuse) without doing anything to really tackle the problem. On the other hand, software vendors using CodeArmor Intelligence are doing the right thing and have recovered hundreds of millions of dollars in software license revenue.

Do the Right Thing

  1. Do the Right Thing for Your Customers: You know that feeling you get when you find out your neighbor bought the same car as you did, but paid 20 percent less? Put yourself in your customers shoes and imagine how they feel when they realize that their competitors are using your software for free. Your customers are now suffering a competitive disadvantage because your company accepted the inevitability of piracy and is still waiting to figure out how to collect. By being proactive and identifying the companies that are using pirated versions of your software, you are telling your customers that you are committed to keeping the playing field level in terms of software costs. You also underscore the value of your software when you make sure that everyone who uses it pays for it. If you don’t believe software piracy creates a competitive advantage, check out the case in Massachusetts where a “Thai company did not pay licensing fees to use the software to sell and deliver its seafood” and was ordered to pay a $10,000 fine for “having violated Massachusetts General Law Chapter 93A, which states that businesses using unlicensed software should not gain unfair advantage over competitors who follow the law.”
  2. Do the Right Thing for Your Shareholders, Investors and Employees: If you dropped a $20 bill on the street would you stop to pick it up? Of course you would. By ignoring the use of pirated software you are leaving money on the table. Your shareholders, investors and employees all have a vested interest in your company maximizing its revenue opportunities. CodeArmor Intelligence identifies the sources of these losses and provides our customers with a map of where to pursue license revenue recovery opportunities.
  3. Do the Right Thing for Your Company: Convert pirates into paying customers and everyone wins. By ensuring that users of your software pay for it, you have leveled the playing field for your customers - but you have also grown your market. You have also grown the number of users who can help drive future product development and provide feedback on the value of your applications.
  4. Do the Right Thing for Your Compliance Team: By leveraging software intelligence you enable your compliance team to address both software piracy in prospect accounts and license overuse in your existing customer accounts. On average, our customers see half of their license misuse coming from existing customers. By alerting these customers to the overuse or piracy (often unintentional) they can forge stronger relationships that might otherwise suffer under the strains of time and resource intensive audits based only on suspicions of misuse.

What to Do Next

Watch the recording of our panel discussion with guest speakers from Adobe, ANSYS and PricewaterhouseCoopers. We discussed the impact of the Unfair Competition Act that is helping connect software piracy to fair trade practice requirements as well as software intelligence driven compliance programs and how to leverage forensic evidence of infringement.

You may also want to download the IDC whitepaper, Information Is Power: Combating Software License Misuse and Overuse with Intelligence, to learn how your peers and competitors are using software intelligence to better understand the scope of their problem and recover millions of dollars in license revenue.

Activate Your Data-Driven Compliance Program

Add new license revenue by detecting, identifying and converting unpaid users into paying customers.

Michael Goff

Post written by Michael Goff

Marketing Director at Revulytics
Michael is Marketing Director at Revulytics where he is responsible for corporate marketing, content, and social media. He has helped to educate the industry on the benefits of software usage analytics for compliance and product management through the company's blog and contributed articles in trade publications. Michael was previously a marketing programs manager at The MathWorks and principal at Goff Communications. Michael earned a J.D. from Boston University School of Law and a B.A. from Colgate University.