Is it time for businesses to give up on shrink-wrapped software?

Summary:Buying physical copies of software is so last millennium. Or is it?

Ed Bott

Ed Bott

Yes, now!

or

Not time yet

Ken Hess

Ken Hess

Best Argument: Yes, now!

32%
68%

Audience Favored: Not time yet (68%)

The moderator has delivered a final verdict.

Opening Statements

Stop the madness

Ed Bott: Shrink-wrapped software is so analog and sooooo last century. It belongs on a list with afternoon newspapers, VHS tapes, and rotary phones.

The problem isn't the physical package. Instead, it's the idea that software releases can be frozen in time and maintained in that static state for years. That might have made sense in the days when bits had to be shipped on physical media. But this is 2013. C'mon.

Software changes quickly, and if you want to get security fixes and new features, you need to move just as quickly. Google has been successful using regular automatic updates and Chrome-hosted apps. Microsoft's experience with Office 365 is also promising.

Maintaining multiple versions of software imposes a serious engineering burden on software developers. Right now, for example, Microsoft is supporting five different versions of Windows. That's a tremendous waste of engineering resources, with equal amounts of waste on the client's side, managing those deployments.

The sooner we get off the update management treadmill and transition to continuously improving software, the more productive we'll all be.

It's all about lowering risk.

Ken Hess: It's easy for me to argue the 'Yes' side of this question by saying things such as, "It's 2013, software should be delivered as-a-Service, or via ISO, or by App stores." And those are fine arguments--for consumers but not at all for businesses. ISOs are nothing new. App stores really aren't all that new. And cloud-based software offerings aren't all that new either. But their relative newness makes them seem risky.

What you have to think about for businesses is the very old concept of risk. Risk plays a major role in business and the decisions made around it. Businesses spend billions of dollars per year to reduce and mitigate risk. Having a physical piece of software and its accompanying license reduces risk.

If I have a CD or DVD of a legitimate product on my premises, registered to my company, no one can say that I have violated a copyright, patent, or licensing requirement for that product. That physical product is my assurance and my safety net against such accusations. The risks associated with a license dispute, an accusation of software piracy, or a copyright infringement suit are too great to forfeit that shrink-wrapped, paid-for, official copy to in exchange for a few blips on a computer screen.

A physical copy can't be hacked into or compromised over the Internet. It can't be erased with an accidental slip of the finger. Nor can it be denied legitimacy. Not so of cloud-based software or online subscriptions. That physical asset has value. It has more perceived value than its online equivalent does. Maybe that's a matter of perception but perception is reality.

It is not time for businesses to give up on physical software assets or on the prospect of reducing risk. Shrink-wrapped software gives business owners peace of mind that there's something in the cabinet that says, "I purchased that software license. It's mine. I have physical proof."

The Rebuttal

  • Great Debate Moderator

    Welcome back

    ...to our Tuesday Great Debate. This week's topic: Is this the end for software in a box? Debaters ready?

    Posted by Larry Dignan

    All set here

    Are you prepared Ken?

    Ed Bott

    I am for Yes, now!

    Let the games begin

    I'm ready

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    On-premise software

    I view shrink-wrapped software as a synonym for on-premise software in the enterprise context. Do you agree?

    Posted by Larry Dignan

    It's your business

    That's a good way to look at it. You own the rights to run the software on your own boxes. You're responsible for keeping it running and up to date. You're responsible for having experts on call who can recover from an outage at 3 AM. And you have to budget for upgrades and maintenance, which are typically included with software that runs as a cloud service.

    Ed Bott

    I am for Yes, now!

    You own it

    Yes, that's exactly what it is. It is physical software media, as in CD, DVD, USB drive, etc. that you can physically work with, install, backup, and so on. You can lock it up in a vault and keep it as proof of ownership. It's the traditional delivery method for software since the first software was delivered on tape.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    Need

    In what circumstances would companies need shrink-wrapped software?

    Posted by Larry Dignan

    It can be a pain

    I suppose if you're running an off-the-shelf management program for your restaurant or doctor's office, it's useful to have the software around. But for everything else, from consumer services to enterprise deployment, getting rid of those shrink-wrap boxes makes life less stressful.

    Ed Bott

    I am for Yes, now!

    Proves ownership

    As I stated in my opening argument, I think that physical software is important for companies who want to prove "ownership," that they've paid for a license, and that they have physical proof that they're in compliance with being able to produce licenses on demand. They can show that they purchased the software in good faith and that their copies of copyrighted material are legitimate--or at least purchased as legitimate.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    Real copyright/patent protection?

    Do physical copies of software--DVD, thumb drive etc--really protection you from copyright and patent issues?

    Posted by Larry Dignan

    It's all in the license agreement

    Software is weird stuff, legally. That physical copy has very little to do with your rights, most of the time. Your rights are defined by a license agreement that defines where and when and how you can use it. The method of delivery doesn't help at all with patent issues. Ironically, using cloud-based software is much less likely to get you into copyright troubles because each license is tied to a login that's easy to count.

    Ed Bott

    I am for Yes, now!

    It does but...

    Interesting question. I've stated that it does. However, back in the 1990s, I recall that there was an influx of what was then known as "gray market" software. Companies purchased this legitimate software from vendors with the full expectation that their purchases were also legitimate. They kept the media and licenses in compliance with regulations. To the surprise of many, the software, while official, was not obtained through official channels.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    Cost benefit

    What are the cost benefits to having shrink-wrapped software?

    Posted by Larry Dignan

    It's insurance

    If you "own" the software you're protected against the possibility that its developer decides to change or eliminate a feature that your business relies on. Worst case scenario: the provider goes out of business. That's especially important for any service that collects and stores data for you. Otherwise, the only cost advantage is that you get the choice to use a program indefinitely without paying for an upgrade.

    Ed Bott

    I am for Yes, now!

    Time is money

    I'm not sure that there are any cost benefits to having it. Although sometimes it's more convenient to have it on hand, and perhaps that leads to some cost benefit. I've had to install software from physical media and having it available to me has been an advantage in that I don't have to search for it, redownload it, beg or borrow a copy from someone else, and so on. Mostly the benefit is a matter of convenience and time is money.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    Missing updates

    What are the problems with not getting continuous updates?

    Posted by Larry Dignan

    Not being on the same page

    You mean aside from the very real possibility that someone will break into your network with malicious intent, steal your business secrets, drain your bank account, and deface your web page? Nothing, I guess.
     
    Seriously, if the developer and the customer are on the same continuous update schedule, security is the obvious win, with reliability a close second. None of us think twice about regularly updating OSes. This just moves that habit down the stack.

    Ed Bott

    I am for Yes, now!

    Security

    The most obvious one is security. I do remember waiting for certain service packs to become available on CD. That was a little painful but the distribution channels were always pretty good, so it wasn't too bad.

    The next obvious problem is that you end up waiting for features that you really want or need. Again, though, the waiting was never too long.

    These days, delivery is better for updates, but you can still have that immediate delivery now with ubiquitous broadband and still enjoy having the security of physical (shrink wrapped) software by your side.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    The cloud factor

    Clearly, software is increasingly going to the cloud. Won't users of physical software assets be at a disadvantage?

    Posted by Larry Dignan

    Saving IT headaches

    Well, they always have been, haven't they? If you own it, and it breaks, you have to fix it. Even when it's not broken, you have to maintain it, installing updates and monitoring its performance to ensure that something isn't on the verge of breaking. In theory and increasingly in practice, cloud providers are proving that you can get rid of a lot of IT headaches by turning them over to specialists.

    Ed Bott

    I am for Yes, now!

    No disadvantages

    No, not at all. Physical software simply means that you have an original copy of the software that you can touch. Software in the cloud is by subscription. Some software by subscription still comes in a shrink wrapped package--think Quickbooks here. Although I haven't used it in a while, AutoCAD probably does as well. There are no disadvantages to someone who wants to use shrink-wrapped software and cloud services.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    Continual licenses

    Haven't software vendors largely decided already that shrink-wrapped software is done via continual licenses etc?

    Posted by Larry Dignan

    Success of Office 365

    If you mean licensing programs like Microsoft's Software Assurance, yes. But that's a high-end option for big shops. I think we're seeing that model move down to products targeted at SMBs and consumers as subscriptions. Office 365 is a big success story for Microsoft and really eliminates a lot of pain points for people who own multiple devices but aren't IT pros. We'll see whether Adobe can duplicate that success.

    Ed Bott

    I am for Yes, now!

    Different delivery models

    I'm not sure I completely understand the question but I'll take a shot at it from what I think you mean. I think that software vendors have decided that it's less expensive for them, rightly so, to provide downloadable software instead of shrink wrapped. I'm not sure if the licensing model changes depending on whether you're using physical or virtual media.

    One interesting dilemma does arise from these different delivery models. That of the version upgrade. When you buy a copy of shrink-wrapped application version 8, you are not necessarily entitled to anything but version 8 updates. No upgrades. It seems that vendors are more likely to supply some upgrades for virtual software than for physical, such as free upgrades for three years or for two versions.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    The right match

    There are plenty of companies with multiple versions of applications and they all seem to do fine. What's the big deal?

    Posted by Larry Dignan

    A pain to maintain

    I'll bet most of those companies are old and established, which means they’re vulnerable to disruption by more agile and aggressive upstart competitors. It might look like they're doing fine, but managing all those versions on the back end is a huge test and development burden. That's a big drain on innovation. Imagine if all those engineers can work on the same project at the same time instead of maintaining rusty, crufty old code.

    Ed Bott

    I am for Yes, now!

    Physical media rules

    This is where physical media has clear superiority over virtual. Multiple versions of applications are OK if you can accurately track those versions' licenses. It's difficult to do with virtual software unless you have a very vigilant software inventory package and very vigilant people who keep track of that inventory.

    Physical copies have a sort of built-in audit trail. Someone purchases the software, someone receives the software, someone copies the original disk for physical use, and someone archives the original disk and files the licenses.

    Like the complaints against virtualization, making software licensing easy and virtual, makes licensing sprawl easier too. Multiple versions are like playing too rough on the playground; it's cool until someone gets hurt.

    Have you tried to open a document created in Word 2013 in Word 2007 or Word 2003?

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    Too many updates?

    Do more frequent updates of software cause problems for IT managers and companies?

    Posted by Larry Dignan

    Needs the right timing

    There's no easy answer to that question. There are ways to minimize the disruption of frequent updates, and there are ways to test updates to find and fix problems quickly. Making updates an infrequent, all-hands-on-deck effort creates a different set of problems, doesn't it?

    Ed Bott

    I am for Yes, now!

    Too many complications

    Yes, frequent updates make it very difficult to keep track of licenses, so what usually happens is that companies will end up spending way too much for licensing or be dangerously out of compliance and risk fines.

    It seems that new software versions and updates come out so often that it's difficult to track even for the most organized, anal-retentive nerd using the best available software inventory system. Almost everyone is out of compliance from the small mom-and-pop shops to the largest enterprises.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    Can older companies adapt?

    Last question, can software companies who have made fortunes with shrink-wrapped software and an on-premise approach really make the turn to become cloud/service companies?

    Posted by Larry Dignan

    It's harder from the clouds

    Some will make that turn, some won't. In some cases, it will be pure cloud companies who take over from established software companies that can't figure out how to make the transition.

    Ed Bott

    I am for Yes, now!

    Improvement necessary

    I think that most can. Certain technologies need to improve before some of them can. AutoCAD, for example, perhaps will run in the cloud someday, but not today and maybe not tomorrow, but some day for sure. It will be tough for AutoDesk to make that transition as it will for some other companies because of the nature of their software and what it takes to run it. However, AutoDesk offers subscriptions so it is probably making plans to move in that direction over the next few years.

    Someday maybe 3D CAD, movie editing, CGI and other compute-intensive software will run in the cloud but, for now, shrink-wrapped is still the way to go.

    I think that before some of those software vendors move to the cloud, they will offer pre-built systems with their software pre-installed on them as dedicated workstations. Then the whole system will arrive as your shrink-wrapped software/hardware combo.

    Ken Hess

    I am for Not time yet

  • Great Debate Moderator

    It's a wrap

    Thanks to both debaters for sharing their knowledge with you. Remember, closing arguments will be posted on Wednesday and my pick for the winner will be announced on Thursday.

    In the meantime, check out the comments, add yours, and cast your ballot. See you next week.

    Posted by Larry Dignan

Closing Statements

Welcome to the 21st Century

Ed Bott

The longer you've been in this crazy business, the more of a sentimental attachment you're likely to feel to shrink-wrapped software. But this industry isn't in its infancy anymore, and it's time to give up that security blanket.

 My opponent believes that possession of a box and a shiny disk conveys magical properties that can safely repel copyright and patent lawsuits and provide a "Get out of Jail Free" card for your next software audit. Sorry, but that's just not true. Having a physical package and some sort of certificate or sticker just means you have more stuff to keep track of. Your real rights when it comes to business software are defined by contract, and the shrink-wrapped box is completely irrelevant.

 Getting over the obsession with the physical media is freeing in so many ways. Subscription-based software updates itself, so you don't have to continually be planning for migrations and downtime. And when old, vulnerable versions of a program are no longer available, the Internet at large is a better, safer place.

 I'll keep a couple of those shrink-wrapped boxes around as reminders of the way the world used to work, but I won't miss them.

No harm in keeping it

Ken Hess

I find no compelling reason for businesses to stop using shrink-wrapped software. If it gives them peace of mind or helps them better establish license compliance, then there's no harm in it. The advantages of having tangible, shrink-wrapped software in your possession far outweigh any disadvantages of having it. 
 
Official, physical media and hard copies of accompanying licenses still mean something. There's value in it. You can refer to a copy of a printed manual. Read the box describing features of the product and a toll-free number to call in case of any problems is proper business software attire. You can't Casual Friday your way through everything by declaring that cloud-based software is simpler or more efficient. It's really a matter of perspective and preference.
 
Having tangible assets is part of what gives value to a company. It's difficult to explain perhaps to millennials but hard assets equal value. For example, companies that produce no tangible goods and have no hard assets have less perceived value than those that do. Shrink-wrapped software isn't just blips on a computer screen or records in a database; it's something that you can point to, hold, and use.
 
I do, however, realize that there is a time coming in a few years when physical, shrink-wrapped software will cease to exist in favor of cloud-based alternatives. That's still a dream for many. The reality is that businesses today want shrink-wrapped software and will as long as it's being produced. If software vendors want to wean businesses off of the real stuff, they'll have to deliver great alternatives.

Voters are wrong

Larry Dignan

It's somewhat stunning that the majority of the vote is for shrink wrapped software. Arguments between Ed Bott and Ken Hess aside, that vote is absolutely bonkers. Fortunately for me, Ed made the better case even though Ken had some good arguments for hanging on to those boxes. Ed gets the win though. The rest of you need to get your head shrink wrapped.

Topics: Great Debate

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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