Enlightening ISVs – Turning software piracy into revenue

On average, nearly half of all infringing organizations are existing customers, often a result of software license overuse.

This is part three of a three-part series by Michael Goff about dealing with software piracy. Read part one: Software piracy – Where is your revenue going? and part two: Responding to software piracy - React but don’t overreact.

Commentary -We’ve previously covered the early phases of software piracy, where ISVs are first unaware of a potential software piracy problem and then how they initially react. We discussed how and why the best response plan is to be proactive, yet patient. In the final phase, ISVs progress from “reaction” mode to what we call “enlightenment”.

In the later stages of the reaction phase, ISVs begin to realize that common approaches to dealing with piracy such as DRM solutions and stronger licensing controls aren’t enough. No matter what, software will be cracked and made available in an unlicensed form and shared through P2P sites like Pirate Bay. It’s at this stage when mature ISVs begin to realize they need to adopt a system for monitoring and tracking software piracy. By taking a piracy business intelligence approach, ISVs can collect and accumulate data on trends and patterns on how and where their software is being pirated. For example, the data can point to geographic regions that produce the highest rates of piracy, enabling ISVs to develop actionable, data-driven decisions to better respond to the problem.

In the final phase, the enlightenment phase, software vendors “operationalize” their piracy data, meaning they are collecting the data and initiating programs to recover revenue lost to piracy or working with partners in other geographies to ensure piracy doesn’t become a problem or continue to be a problem. ISVs have collected enough data to get an accurate understanding of their own piracy problem. As they analyze the data within piracy dashboards, the ISVs get a true sense of the issue at hand. The piracy data serves as forensic proof of what software applications are being used without a license and to what extent.

Often times, the results in the dashboard can be quite surprising. In fact, on average, nearly half of all infringing organizations are existing customers, often a result of software license overuse. The remaining 50 percent of piracy sources should now be viewed as a new business opportunity – organizations previously unknown to you that you now know are using your software as part of their business operations.

ISVs taking a piracy business intelligence approach have direct visibility into who the biggest offenders are in terms of unlicensed software use and can take the forensic data from their dashboards to develop a data-driven response to recover the lost revenue. One key point to consider is that infringing organizations chose your software over your competitors for a specific reason and likely have a business need to continue using it. In many instances, the benefits are just as great for the infringing organization to become a paying customer. By doing so, the organization becomes software compliant, and is now entitled to services from the vendor such as support and upgrades.

Previously, software vendors had no means of measuring or defining their own software piracy problem. Few ISVs had the resources to take on such a task themselves, and those that did lacked the tools to really do it well. With piracy business intelligence solutions, ISVs can do exactly that. They can determine their own piracy pipeline number, which details exactly how big their own piracy problem is and with the data they have collected, decide the best approach to respond. ISVs in the enlightenment are proving to be visionaries and leaders in the fight against software piracy, by recovering lost revenue and turning infringing organizations into paying customers.

biography
Michael Goff is the marketing director at V.i. Labs, where he helps oversee the development and promotion of solutions that provide software companies with actionable intelligence on the use and misuse of their products to increase revenue. A fifteen year software marketing veteran, Michael understands how IP theft and piracy impact an organization’s bottom line, as well as how unlicensed users can be converted to recurring revenue.