July 9, 2003

Stealing software the old-fashioned way

- by John O'Sullivan

The current market champions in the software industry have a dirty little
secret. They depend on a degree of unauthorized software copying as part of
their sales cycle.

A typical buying cycle for a complex application like PhotoShop
works like this: Someone gets a copy of the software from a friend or
co-worker, or on the Internet. They try it, become used to it, become dependent
on it, and then buy it, thus "legitimizing" the copy they already have.

My guess is that of PhotoShop users, fewer than 5% have purchased a personal
copy of the software. I've never actually seen a copy purchased by an
individual, but somebody somewhere must have bought one sometime. If 5% of users
learned PhotoShop using their own purchased copy of the software, where did the
other 95% learn? Some at school, some at previous jobs, some at
courses, and some on office machines after work, but the majority learned
at home, on their own computers, with "borrowed" or downloaded software.

Companies need users to copy their software, otherwise the
applications would never get sufficient trial.

What about demo versions? Feature-limited or crippleware demos
don't let you learn enough about an application's capabilities. A demo app that
won't save, or is limited in some other way, doesn't do the job. A time-limited
application is likewise useless, since it takes longer than 30 days to
learn a complex application like PhotoShop, and most importantly to learn to
depend on it.

Many software companies, and Adobe
in particular, expend a lot of energy fighting software piracy. But even if
Adobe does not recognize it publicly, it depends on a certain level of casual
copying. The company's pricing strategy reflects this. If people don't use the
software, they won't pressure their companies to buy it, and at US$699 a pop,
not many individuals are going to be buying PhotoShop.

Let me hasten to add
that I am not providing a rationale for stealing software. The point here is
not the rationalizations people use to pirate software, but the fundamentally
dysfunctional relationship copying creates between the company and its
customers. And Adobe, to be fair, hates the current situation. Even if it were
possible to prove mathematically that it benefits from copying, Adobe still
would be against it. Other companies have been more calculating, tacitly
allowing copying until they dominate a market, then cracking down to increase

What's a better model to promote software sales without making potential
customers into criminals? At my company, we intend to dual-license our
development tools. Anyone can choose either to use the tools under the GPL to
develop open source apps, or they can pay us for a commercial license that
allows them to write their own commericial closed-source applications.

It's hard to explain to people how we can make money from such
an arrangement. However, when I explain it in terms of using software for free
through copying and then buying, they immediately understand. They realize
that we expect people to use the software freely, but to pay for it when they
want to produce real work. This is consistent with their own experience. Few
users haven't at one time purchased software to "legitimize" a copy already
present on their hard drive.

Dual-licensing is a more honest way
of dealing with users. We don't need to pretend they aren't stealing the
software while needing them to do so. We don't need to demonize them. We
avoid an artificially adversarial relationship that too often characterizes
company/user interactions. We think this approach will give
people the chance to try out the tools on their own terms, and lead to
loyal customers and corporate profitability.

John O'Sullivan takes care of sales, marketing and product management
at Hotsprings Inc., a Toronto
company creating open source applications and development tools. Hotsprings
technology was acquired from Hotline Communications, developer of Hotline
Connect and a pioneer of P2P applications.


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