Revulytics Blog

More on Making Software Piracy a Revenue Source

October 11, 2013

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Craig Vodnik, co-founder and VP Operations at Cleverbridge, published a fantastic article yesterday titled, “How to Make Software Piracy a Revenue Source.” It was great to see another voice in our industry turning conventional wisdom on its head suggesting that “rather than chalking up pirated users as lost revenue, there are ways to salvage some value from those illegal users by opening up a previously unknown revenue channel.”

We recently shared our thoughts on unpaid software and are hosting a webinar on Driving Revenue from Unpaid Software Use at the end of October - clearly this is an important topic to us and our customers.

Mr. Vodnik notes that “after protecting software against pirates, the next task is to identify those countries where software piracy is prevalent” and points to BSA piracy rates as a starting point in this analysis. Of course, CodeArmor Intelligence customers can see high level regional data on unpaid use, but they can also have forensic evidence of who is using their software without a license and where they are located. As As Mr. Vodnik noted, “many companies can now see who is using their products illegally, and there are many mechanisms for communicating directly with those pirated users.” Armed with CodeArmor Intelligence data, software vendors are in a much better position to decide which compliance approach works best for their company and the specific unpaid user.

Unpaid Software Use Map

CodeArmor Intelligence Dashboard: Map of Unpaid Software Use with Details on Non-Compliant Organization (click image to enlarge)

One approach is direct outreach by your compliance team or inside sales group (or outsourcing it to someone like V.i. Labs’ partner Software Compliance Group). Another approach is to use in-application messaging such as that provided by CodeArmor Control to communicate directly with specific unpaid users (alerting them to the unpaid status of the application and presenting any number of different options to rectify the situation).

We agree with Mr. Vodnik that it is better to use the carrot than the stick when first approaching unpaid users to convert them to customers. He noted how Microsoft did this with Windows XP: “Microsoft isn’t accusing the customer of software theft. Rather they’ve made the customer a victim and have alerted him to the benefits of a fully paid version. If the user clicks on the offer, they are presented with a 60% discount on the product.”

It is often said that piracy results from flawed or incomplete market analysis: the failure of a vendor to understand demand in specific markets and price its offerings accordingly. Mr. Vodnik ends by discussing the benefits of setting and presenting the right price for a discount based on your target markets (Cleverbridge enables vendors to “use Geo-IP detection in the cart to serve the correct pricing to the correct customer”). Coupled with the usage data generated by CodeArmor Intelligence, software vendors are armed with the geographic insight and analysis they can use to tackle the demand for pirated software on a regional basis.

Our customers have demonstrated the benefits of making software piracy a revenue source and have added hundreds of millions of dollars to their top line revenues. Want to see how your revenue opportunity from unpaid software? Check out our revenue calculator for an estimate.

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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.