December 06, 2004
Pirated Software
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Jack Horgan - Contributing Editor

by Jack Horgan - Contributing Editor
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There is an old adage that says “you get what you pay for”. This suggests that anything you get for free can't be worth very much. Today, there is a considerable amount of valuable software that one can get for free or at a nominal fee. This includes
a) shareware or freeware available on countless websites

b) user group offerings donated by members

c) opensource software

d) readers/players from authoring tool vendors like RealNetworks, Adobe, and Macromedia as described in last week's editorial

e) commercial freebies such as conversion tools from competing databases and

f) the ever popular pirated software.
Pirated software is software that that the vendor/developer did not intend to be free.

Some people see coworkers with “neat” software and rather go through the hassle and time delay to obtain the program through normal company channels, they simply copy it. Some people bring software home from work and vice versa. In some cases people borrow the software with the good intention but little follow through to purchase it later. In some instances managers deliberately decide to save money by installing or making available over a network more copies of a particular program then their firm has legally licensed. In some cases individuals copy software from friends, neighbors, and associates for personal use. Often the source of pirated software is a website or a
flea market that offers popular software for a fraction of the commercial price.

Other forms of software piracy beyond end-user piracy include counterfeiting where illegal copies of software are made and distributed in packaging that reproduces the manufacturer's packaging, internet auctioning where software is resold in violation of its license agreement, pre-installed software where a computer manufacturer or reseller illegally installs software on multiple machines and the sale of circumvention devices. I recall an incident when I was Applicon, where a prospect ordered 6 seats of software but changed to a single seat at the last minute. A disgruntled (it's always the disgruntled ones) employee informed Applicon that his company had purchased 5 copies of a device to
circumvent our security device.

IT organizations, particularly in large firms, do not appreciate employees acquiring software outside normal channels. Not only is this illegal but it makes their technical support task more difficult. Using software from unknown sources increases the exposure to viruses and the like. It also increases the number of configurations that must be supported.

There are several drawbacks in using pirated software including
Lack of documentation

Lack of technical support

Lack of future fixes and upgrades

No warranty protection

Greater likelihood that the program will not function properly

No access to user training

Exposure to substantial legal penalties

Potential public and personal embarrassment
Further, the lost revenue impacts the developers' capabilities to support and enhance their products and to create and maintain jobs. Society suffers when there is less motivation for innovation.

The best example of pirated software in the CAD industry has been AutoCAD. In 1982 Autodesk released AutoCAD at a price of $1,000 running on the newly introduced IBM PC. The product was pirated in droves. This is somewhat ironic because the established CAD vendors like ComputerVision, Applicon and Calma were selling their multiuser systems at over $125,000 a seat. However, the fact that these CAD software modules were tied to proprietary hardware serviced by the vendor's field engineering staff made them difficult to steal. The CAD terminal served in effect as a security block. Since Autodesk had revenues of $300 million in the last quarter, it is clear that the firm has taken steps
to protect its intellectual property. In fact they instituted an aggressive campaign to combat software piracy. In a press release dated July 7, 2004 Autodesk announced that it has recovered more than $63 million in North America since its Piracy Prevention Program began in 1989, and $3 million during the last year, from settlements with companies using unauthorized Autodesk software. The company has a webpage that lists recent settlements along with a description of the offenders. Currently ten firms are listed with a total of $725,000 in payments for penalties for unauthorized use and purchase of Autodesk licenses. The payments range from a low of $35,000 to a high of $157,000.

There are organizations of software companies that are focused on anti-piracy activities such as educating consumers, lobbying the government concerning copyright related legislation and assisting in civil and criminal prosecution of offenders.

The Software & Information Industry Association (SIIA) was formed by the merger of the Software Publishers Association (SPA) and the Information Industry Association (IIA) in 1999. The SIIA is the principal trade association for the software and digital content industry with over 700 members. SIIA provides global services in government relations, business development, corporate education, and intellectual property protection to more than 700 leading software and information companies. Started in the mid-1980s, SIIA's Corporate Anti-Piracy program identifies,
investigates, and resolves software piracy cases on behalf of its members. As Internet-based piracy has emerged, SIIA began an extensive program for tackling software pirates operating over the Internet, ensuring that SIIA members receive the maximum protection possible. The pro-active campaign is premised on the notion that one must balance enforcement with education in order to be effective. The organization offers rewards up to $50,000 to individuals who report verifiable corporate end-user piracy cases to its Anti-Piracy team, whether the software is illegally being offered on a website, newsgroup, auction site, P2P network, FTP site, IRC, bulletin board service or elsewhere on the

The Business Software Alliance (BSA) describes itself as the voice of the world's commercial software industry before governments and in the international marketplace. The mission of organization is to build a safe and legal digital world that fosters IT investment, innovation and confidence in our networks. BSA educates consumers on software management and copyright protection, cyber security, trade, e-commerce and other Internet-related issues. Established in 1988, BSA has programs in more than 60 countries worldwide. Worldwide, more than 50 BSA hotlines provide callers with the opportunity to obtain information about software piracy and report suspected incidents of software
theft. BSA also works closely with law enforcement agencies around the world to enforce software licensing agreements.

The membership of BSA includes the following companies

Adobe Entrust McAfee
Apple HP Microsoft
Autodesk IBM RSA
Avid Intel Solidworks
Bentley ISS Sybase
Borland Intuit Symantec
Cadence Macromedia UGS
Cisco Systems Mastercam Veritas

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-- Jack Horgan, Contributing Editor.


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