Responding to software piracy - React but don’t overreact

If you find out your software is being pirated, sometimes you can turn the tide with a plan that will make the best of the situation.
Written by Michael Goff, V.i. Labs, Contributor

This is part two of a three-part series about dealing with software piracy. Read part one Software piracy – Where is your revenue going?

Commentary - There are several phases to software piracy. As we have previously discussed, ISVs first tend to be in a discovery phase, where they are not aware there’s a problem, have just discovered that their software has been pirated, or know that their software has been pirated but don’t think there’s anything they can do about it. In the second phase, ISVs move to reaction mode.

Once ISVs discover that their software has been pirated, the gut reaction is to put an immediate stop to it. After all, this is their life’s work. Thus, their first response is often to go after distribution channels and issue takedown notices. For example, the New York Times recently reported that Microsoft is taking down 800,000 counterfeiter links a month to quell counterfeit software threats. The company reportedly spends roughly $200 million in anti-piracy technology. It scans the web for suspicious links and sends takedown requests to web service providers when it discovers questionable activity. However, software pirates then use automated systems that replace links that Microsoft removes. It's a continual battle.

Clearly, this strategy is not working all that well. It’s like a game of “whac-a-mole” – simply impossible to keep up with.

Alternatively, some ISVs look to curb this problem through software protection approaches. By hardening the software, they hope to deter software pirates. In some cases, this does make sense. However, in the majority of cases this merely delays the time it takes to crack the vendor’s licensing or DRM.

If piracy is discovered, it’s best to react, but not overreact. Be proactive, yet patient. This may sound contradictory, but in this case it is not. Patience does not mean passive. It’s about taking the right action, based on the right information. ISVs can be proactive by investing in piracy business intelligence to identify license infringement, and then having the patience to gather this intelligence before making a decision on what actions to take.

Today, ISVs have the means to discover how and where software is being used, what features are used most, and the extent of software misuse. By gathering data on the actual businesses using pirated software, ISVs can make data-driven decisions about their piracy strategies.

Avast is a clear example of this. The company turned a piracy problem into a huge marketing opportunity. Most companies, upon realizing their software was being stolen, would immediately seek to squash the problem and penalize those users. Instead, Avast took the patient, proactive approach, gathering intelligence over the next 18 months about the use of the pirated version of its software.

According to PC Pro, “a single license for Avast security software had been used by 774,651 people after it went viral on a file-sharing site." Avast saw the users for what they were: business leads. Realizing it had an avid following of people clearly interested in its software, Avast decided to flip the users of the pirated version of their application into authorized users. Those people using the pirated version received a pop-up notice offering them a link to the free or paid-for versions of the software. Users had an opportunity to “true up”—and use a valid version of the software free from the risk of malware.

Companies like Avast are taking a more enlightened approach to tackling software piracy, leveraging data about misuse of their applications to recover lost revenue. Ultimately, when it comes to software piracy, it’s difficult to make the right decision without the the most significant facts in front of you. They then have an understanding of the scope of the problem and how best to attack it.

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.

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