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News

Piracy business intelligence to combat software theft

Vi Laboratories : 14 May, 2009  (Technical Article)
V.i Labs releases results of study demonstrate revenue recovery possible by focussing on users of pirate software
V.i. Laboratories has offered an advisory for ISVs in response to the release of today's Sixth Annual BSA-IDC Global Software Piracy Study, which estimates that more than a fifth of all software running on PCs is pirated. The report also concludes that governments and software companies are making progress in slowing the illegal use of personal computer (PC) software products, but progress has stalled in the United States, where losses topple $9 billion.

While global data is useful at the industry level, individual ISVs need to understand the specific and direct impact of software piracy on their businesses. Global piracy numbers have increased from 38 to 41 percent: the BSA/IDC research attributes this to emerging markets and fast growing PC markets, particularly in China and India. What the report doesn't address are the best methods for ISVs to recover revenue once they have been compromised.

Based on V.i. Labs' independent research of 80 percent of BSA member companies, we estimate that only 21 percent are using some form of piracy business intelligence to assess their actual problem and identify the businesses using their unlicensed software.

"Many organizations still believe that their piracy issue is ad hoc and the companies who use pirated software would not otherwise pay for it," said Victor DeMarines, vice president of Products for V.i. Labs. "It's clear from today's research that the best chance for revenue recovery efforts, ISVs need to focus on who is using the pirated software, rather than focusing on who is pirating their products. Given the increase of global piracy and specific data we see from our customers, we advise ISVs to turn their attention to piracy as a lead generation process and a way to recover revenue from the businesses that are ultimately making a profit at the ISVs' expense."

V.i. Labs helps ISVs learn about their specific piracy issue and gather data directly from infringing organizations to recover license revenue. Thirty percent of the BSA member companies are high value software vendors who have seen piracy group release activity grow an average of 155 percent over the last three years. Product lifecycle management (PLM), engineering, and electronic design automation (EDA) customers who implemented V.i. Labs' piracy business intelligence solution (CodeArmor Intelligence) have reported the following:

* A large PLM vendor generated more than 40,000 actionable infringement leads within five months of releasing their Service Packs and Beta products.
* Several customer deployments have reported detecting pirated use well ahead of the actual Piracy Group releases. This phenomenon indicates that end users or even licensed customers have enough reverse engineering skills and sophistication to emulate the crack approaches used by the piracy groups to disable licensing. This behavior has been reported on both software and hardware (USB dongle) based systems. It was estimated in one deployment that 30% percent of the infringements were generated from cracks not initiated from piracy groups.
* In all deployments the piracy detection and reporting capabilities were still available after the piracy group releases.
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