Q&A: Software Piracy
Jan Samzelius is the CEO and one of the founders of ByteShield, a company whose mission is protecting PC software applications and games against illegal copying.
Let’s take a look at software piracy on a worldwide level. Which countries are most affected and why?
The US is by far the most affected country, since it is home to a large portion of the world’s publishers of mass market software. For example, AutoDesk has openly stated that for every legal copy of AutoCAD, 8-10 illegal copies are being used.
How affected a software publisher is by piracy revolves around the question of how much would revenues grow, if illegal copying was much more difficult. We often hear about the rampant piracy in China, India and Russia. Much of this is driven by economics. Most people in China cannot afford to pay the Western prices for software and resort to using pirated versions. The revenue potential in these markets is probably low, unless the price can be dramatically reduced. Microsoft has recognized this with their very aggressively priced version of Office for the Chinese education market.
The larger revenue potential is likely in Western markets, where piracy is significant and the ability to pay much greater. Furthermore, Western users are likely much more concerned about the security risks involved in using pirated versions and potential compliance problems.
The files on the CD for a game protected with ByteShield ended up on lots of torrent and ftp sites. The people who downloaded those files thought the game was cracked. They registered as users on our server and then discovered they could not play. Of about 400 such people, so far 11 have purchased the game. A 3% gain is nothing to sneeze at and if you consider the 10:1 ratio, convert 3% of the pirates and revenues grow by 30%.
Are you satisfied with the way law enforcement has been dealing with software piracy issues in the US?
Quite frankly, I view software piracy as largely a problem which should have a technical solution. Many law enforcement efforts have no doubt worked well but piracy overall has not declined, in spite of these diligent efforts, both by agencies and individual companies. I think it is possible to have an anti-piracy product, which is both very strong and very friendly and not intrusive to the end user or the publisher.
In your opinion, what are the strengths and weaknesses of your anti-piracy software?
ByteShield’s strengths are:
1. It gives the end user much greater flexibility as it lets the end user install the software on however many machines so desired. Our product includes truly portable activation, thus no one needs to worry about losing the activation, if the hard drive crashes.
2. We give the publisher lots of tools to manage the business, without disturbing the development process. Up-to-the minute sales data is available, by channel or geography, if so desired. Patches can be delivered automatically. Users can be moved from one license type to another, say from trial to full, without reinstallation or reentering a product key. Protecting an application with ByteShield is done after all development is completed and takes 15-30 minutes.
3. The benefits to the end users cannot be delivered without very strong protection. ByteShield has passed a significant test: A unit of the DoD invested 2 months in trying to break ByteShield, and as far as we can tell, they did not succeed.
Weaknesses? We are in the early stages and of course have a huge list of improvements we want to make to our system. Cover more operating systems, automate the process for the publisher further, and make the protection yet stronger.
Where do you see the current piracy threats ByteShield is guarding against in 5 years from now? How do you see the protection mechanisms evolving over time?
We are currently focused on software, with most of our energy aimed at the game market. Software is much easier to protect than other content, since if one character in it is wrong, the application will not work as intended. Music, video et al are much more difficult to protect. I think many new protection mechanisms will evolve. Our current product, protection of software and games uses encryption, but it is not the dominant technology. We have filed patent applications for protecting data files and email, with our existing technology as the base. These solutions will be very different from current offerings.
What are your future plans? Any exciting new projects?
When you are a start up, every day is exciting! Our momentum is right now in games, where the interest in using new and better solutions has grown rapidly over the past couple of months. In addition, we are working on some partnerships with great potential.