Piracy and IP theft trouble software publishers

A joint survey by SafeNet and SIIA of more than 620 software developers and 194 enterprise software end users, revealed that developers continue to struggle with how to secure their critical intellectual property (IP) without disrupting their business.

As a result of not implementing the right licensing models and security as a foundational pillar of their business, software developers are finding that they are losing revenue, seeing diminishing profitability and increasing the risk to their brand and overall reputation.

Participants cited inflexible licensing models, insufficient software protection, and inadequate operational procedures as the main impediments toward fully monetizing their software, protecting their company’s most critical intellectual property and fully integrating software monetization into their business model.

Some of the highlights of the survey include:

  • One out of two (53 percent) software publishers surveyed said they would have driven higher revenues for their software if they had more licensing flexibility.
  • Nearly one out of two (48 percent) software publisher respondents admitted that competitive IP theft had a significant impact on their business.
  • In addition to licensing and piracy issues, nearly one out of two (46 percent) software publishers now report that dysfunction in their back offices has had a significant impact on their business, with nearly two out of three (60 percent) admitting that they struggle with back-office licensing processes.

Beyond licensing flexibility problems, nearly half of all respondents also reported that lack of control over their software was a major contributor to revenue loss—48 percent of software publisher respondents thought that competitive IP theft had a significant impact on their business, and 42 percent thought that lost revenue due to software piracy had a significant impact. This result is not unexpected, considering that 70 percent of respondents reported challenges with piracy prevention, 63 percent reported challenges with reverse-engineering protection, and 51 percent reported challenges with code-tampering prevention.

The responses from software end users justify concerns about the business impact of software misuse—more than 60 percent report having some unlicensed software in use within their organization last year. This behavior seems to be reinforced by software publishers; while 74 percent worry that their software may become compromised, only 58 percent employ license compliance enforcement mechanisms and only 46 percent employ IP protection tools.

SafeNet Senior Vice President Prakash Panjwani said: “Developers need solutions that address the four key elements of software monetization—effective packaging, access and compliance control, back-office automation and management, and usage monitoring. By adopting a comprehensive approach to software monetization, organizations can not only protect their critical IP from piracy and reverse-engineering, but help drive revenue and profitability as well.”

The complete survey is available here (registration required).

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