Friday, July 27, 2007

Software Piracy Continues To Be Major Problem

April 1, 1997

Software piracy is generally defined as the unauthorized use, copying, and/or distribution of software. It includes both applications and operating systems. The actual scope of piracy is worldwide and vast with most of it in the PC realm. Estimates of the value of software illegally copied range in the billions although it can be argued that many of these packages would never have been sold at current list prices.

No one has firm numbers, but the US is still considered to be the single biggest area of software piracy despite stories concerning CD copying factories in Asia, $3 flea market sales of those CDs throughout Asia, and the near absence of any legitimate software in Russia. Autodesk, as an example, estimates that 80% of its losses actually arise from its own corporate customers.

The five states with the highest number AutoCAD-related cases and recoveries are California, Texas, Florida, New York, and Michigan. Total cases since 1989 number in the low hundreds with recoveries in the low millions. During 1996, Autodesk recovered over $4 million from organization that had illegally copied its software. The largest recovery from one firm, $200,000, was from Westech College in Southern California.

In the operating system area, Microsoft and federal agents discovered a small pirate operation in Southern California that held multiple tens of thousands of illegal copies of Windows 95 along with a huge number of illegitimate authenticity certificates.

Pirates also use the Internet to transfer software as well as to exchange the dial-in phone numbers of electronic bulletin board services (BBS) that specialize in having extensive, albeit illegal, software libraries. A much smaller piracy haven lies with businesses that "rent" software diskettes and CDs to customers in one form or another such as "try before you buy" and "buy back" offers for dissatisfied customers.

Without A Technical Barrier, A Wide Spread Attitude Change Is Needed

We see three major attitudes behind piracy. One attitude we’ve heard is that a person should be able to see what the software is really like before paying the full price being asked. Most software manufacturers will not provide refunds to dissatisfied customers, so this attitude has a rather wide, though mild degree of support.

A second attitude is that since the first copy is already paid for, making a second copy for another computer that one uses at different times is perfectly okay. The person never intends to use more than one copy at any one time so vendors are not supposed to feel cheated. This is also wide spread with somewhat greater support.

A third attitude essentially holds that weaknesses that can be exploited, will be exploited if no one really gets hurt. This attitude underlies the efforts of pirates to make an illegitimate profit. This ranges from Asian CD copying factories that pack $25,000 worth of compacted programs into one CD to the U.S. technical schools that turn a few software copies into a hundred for that semester’s students. An eye-opening account of software piracy is Asia was written in the October 1995 issue of Wired Magazine by A. Lin Neumann.

Current Solutions

Some mid-range software vendors now provide deals to students that cut prices from the thousands of dollars to just a few hundred. That’s not only an attractive cost for the benefit of having documentation and technical support, it also promotes a responsible attitude among the students.

Other solutions vary. Enforcement measures by the FBI against bulletin boards have increased, and ISPs report suspicious activities by customers involving large file transfers and file names that look suspicious. Employees anonymously report their own companies’ illegal copying activities if management ignores obvious bad practices. Various software alliances and the U.S. government are using more persuasion and pressure on foreign governments to crack down on blatant piracy developments in their own country. Cases are going to courts in record numbers and convicted pirates are paying damages and even spending time in jail.

Even with all of these advances, the problem is far from declining, especially for the group with the mindset of illegal exploitation. The less sophisticated pirates will get weeded out by police agencies while the stronger ones will probably become enigmas.

In the UNIX world, software piracy is restrained by the measures most UNIX application vendors have put in place to prevent illegal copying. These measures, however, make UNIX software installation and maintenance more difficult than the usual cryptic instructions require in the first place.

Long passwords and locking the program to a PC’s network interface card can be used as the first level defenses, but they are not robust enough to deter technically savvy pirates. Hardware locks work reasonably well on individual computers and networks, but they add an additional degree of administration on already unruly PCs and the vendors apparently find the costs ($30 for each lock) unappealing as well.

Until the PC and software industries come up with a better solution, we think the piracy problem will be around for many years to come.