Revulytics Blog

Software piracy affects your entire business ecosystem

May 5, 2009

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I've talked to some very large software companies around the world in the last several months about software piracy and I've become keenly aware that their piracy problems are affecting their entire business ecosystem. I'm glad to see that Microsoft is taking action, suing four Canadian resellers it uncovered as part of its channel monitoring program.

I think these are probably rare cases and that most resellers and partners are honest business people, but it does highlight that the problem exists everywhere.

I was at a recent vendor conference which was, by my view, a very successful conference for that vendor. They had over 4,000 customers in attendance, over 200 partners exhibiting their complimentary products, and every training room was full.  However, in spite of their efforts to try to manage the unlicensed use of their products they have a piracy problem, and I started to think about how it was affecting everybody in attendance.

Their Customers:  They pay the vendor for support and maintenance of their products and can find themselves waiting for support behind an unlicensed user (this is how most unlicensed use gets caught).

Their Partners: In many cases they are small to medium size businesses who have developed some special functionality that extends the vendor's products in markets or verticals that the vendor hasn't focused on itself. They are dragged into the vendor's piracy problems mostly because of their business relationship and losing 10% - 30% of their revenue to piracy might mean the difference between the survival or failure of their business. These businesses are counting on the vendor to take a leadership role in addressing piracy.

Their Resellers:  Again small to medium size business that the vendor has chosen because of their ability to extend their sales reach - mostly into geographic areas that they couldn't otherwise afford to have a presence in.  Shouldn't a large software company that counts on this channel also help them by providing leads of known unlicensed users?

- Tim

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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.