This week Robin Bloor and his colleagues consider licensing rights, AOL and a Corel comeback - of sorts...
Do we believe software piracy is coming under control? Are the licence controls and anti-theft work carried out by Microsoft and others bringing us all into line?
Not really. The theft of software is still rife and it is the issues of culture and mindset causing it.
Let's face it, who can truly place a hand on their heart and say that nowhere within their lives - at work or at home - there is not an unlicensed piece of software being used?
Actually, most of us don't know and that is part of the problem. It is never obvious whether it is allowable to take a copy for backup purposes or whether the fact you are not using software at the office allows you to use it at home.
In these days of mobile computing the location of the software is beginning to become confused. It can be assumed the missing detail is available in that big grey box that pops up when we install the product. If only we read the content of that box instead of just pressing the 'Agree' button.
This failure to read a licence agreement is just a symptom of the greater problem with our mindset. The Business Software Alliance is one of the major piracy watchdogs and it has put forward some rather interesting points.
First, in the western centres of computing, piracy runs at about 30 per cent. It is not clear whether this is misuse of official products or actual counterfeiting. We can probably put some of this down to non-intentional misuse.
However, in the Middle and Far East these levels rise to nearly 70 per cent. These are markets where respect for brands is not strongly enforced in law and there are major counterfeiting businesses for all sorts of items. In these areas, software piracy is not seen as a crime. In fact, it is more likely you will find the view that the price mark-up associated with a brand is criminal and that it is the right of an individual to buy any product at the cheapest possible price.
The question here is whether it is incumbent on the individual or the business to deal with this. Given that cultural differences exist and that there are some that will never feel the need to buy from an official source at the correct price, shouldn't the vendors be looking to protect themselves more?
*Does AOL have a future?*
Jonathon Miller, previously head of USA Interactive, has taken up the job as AOL's CEO. Other newbies include Don Logan who oversees AOL Time Warner's cable TV and magazine units and Jimmy de Castro who heads AOL's interactive services.
The challenge before these men is to somehow revitalise AOL, whose stock now lingers in the low teens from an all time high of over $80, while keeping one step ahead of federal investigators who are probing the company's past accounting practices.
Like most with a similar interest, AOL is keen to get its subscriber base on broadband. And with 26 million US narrowband subscribers - approximately 40 per cent of the dial-up market - anyone would be. The problem it faces is that the dial-up market has slowed and broadband requires significant capital investment without any guaranteed gains.
In an effort to get more users on high-speed connections, AOL signed a deal with AT&T that will allow it to offer broadband services to 10 million AT&T cable customers. The main problem the company faces is that it makes good money from narrowband and cannot risk pushing users too far in case it impacts the revenue stream.
Then there is the slump in on line advertising. AOL has stopped its dictatorial approach to advertisers and become far more receptive to their needs, including lower rates. With the online advertising business likely to get worse, rather than better, it's unlikely this sector will give the company the lift it so desperately needs.
Under any circumstances, these issues would present a major challenge but when you have the Feds on your back, the struggle faced by Miller, Logan and de Castro is uphill to say the least.
*Corel v Microsoft?*
Hard on the heels of a similar announcement from Dell, HP has stated it intends to cease delivering Microsoft Works on its consumer PCs in favour of Corel's products. This will make a pretty hefty hole in Microsoft's revenues and may start to kill off the myth that Microsoft is the only supplier of office productivity tools. It seems now that we will have the choice of Microsoft, Corel and Sun as major suppliers - but how will the consumer market react?
It appears the big PC manufacturers are beginning to rebel against Microsoft's re-jigged licensing strategy. A combination of the recent changes by Microsoft and some competitive pricing from Corel has worked to convince these two major PC suppliers they would be better off providing WordPerfect 10 and QuattroPro 10 on their consumer systems in preference to Microsoft Works.
The changes will apply from September on Dell's Dimension desktops and Inspiron laptops as well as HP's Pavilion desktops sold in North America. These pre-installed packages will not be the full WordPerfect Office suite but will be cut back to provide slightly less capabilities so that there is still an advantage to be gained by upgrading to the full Corel suite.
The move is a blow to Microsoft's pride although it is unlikely the effect on its revenues will create more than a quiet rumble in the board room. The danger, however, is that this move along with Sun's promotion of StarOffice 6 will sow some seeds of doubt in consumers' minds and reduce the exposure of new customers to Microsoft products.
On one hand, home users will suddenly find that they have choices. They will see very little difference between the reduced capabilities of Works (compared with the full Microsoft Office), StarOffice and the slimmed-down WordPerfect Office. Without doubt the products will also creep into the business environment.
On the other hand, Dell and HP might find consumers don't like unfamiliar tools being thrust upon them and will buy from other suppliers that will give them their familiar spreadsheet and Microsoft Word capabilities.
After all, things didn't go too well for suppliers who tried to push Lotus SmartSuite as an alternative a few years ago. But they weren't Dell or HP.
**Bloor Research is a leading independent analyst organisation in Europe. You can find out more at http://www.bloor-research.com
or by emailing firstname.lastname@example.org .