Could Cloud Computing spell the end of Software Piracy?
The world’s software industry – and the world economy as a whole – lose 
$billions each year to software piracy.
Though software piracy rates may be driven down by increased vigilance on the part of governments and vendors in some parts of the world, the global dollar value of losses to software piracy continues to rise year-on-year, as the overall value of the industry rises. We lost over $50 billion world wide to software piracy in 2008.
But could there be a light at the end of the tunnel?
Kai-Fu Lee, who was head of Google, China, thinks cloud computing could offer the solution to the software piracy problem.
Speaking to Reuters in an interview at the Abu Dhabi Media Summit Lee said:
“China has been plagued by piracy for the last 20 years and that unfortunately has caused China not to have a software industry.”
“But it’s irrelevant now, because software distribution is shifting from packaged software, from end user licence, to cloud Internet distribution. And when you’re on the cloud you gotta pay,” said Lee.
Well maybe there is some hope. But SL.tv thinks that saying software piracy is “irrelevant now” may be over stating the case ever so slightly.
We spoke to Jon Gillespie-Brown, software licensing expert and CEO of software licensing solutions provider Nalpeiron.
“Cloud computing – the idea of all software running in a remote server is a great idea in theory. But it certainly isn’t a reality yet. Our research shows that currently only a tiny proportion of application usage takes place in the cloud, so at the moment software piracy certainly isn’t irrelevant to vendor’s or the world economy”
“There are several key barriers to the up-take to cloud computing and whilst these are still in place traditional software distribution methods and traditional software piracy challenges will prevail.”
“There is still resistance to cloud based computing from many users. Using an application in the cloud requires the user to maintain a constant connection to the vendor’s servers. Users see two problems with this. Firstly there is the technical issue. The world is not yet blessed with blanket, high quality broadband internet access and this is what you need to make cloud computing work. For many people, in many places getting and maintaining an internet connection is still a hit and miss activity and in these situations cloud based apps are simply a non-starter.”
“The second issue is one of privacy and security. The maintenance of a constant connection to the vendor’s servers means a constant exchange of information between the user and the vendor. Many users both corporate and consumer are not comfortable with this and it is going to take quite a shift in thinking before that changes.”
“I am sure in the future some of these problems will be overcome and server only software will be more prominent. But even when this does happen so many apps need to have client-side software running for various reasons that the “protection” from software piracy offered by a cloud based license could turn out to be a red herring. And we must remember that whenever a new technology is introduced there will be someone out there putting time and effort into “cracking” that technology, if the is financial reward to be had. We can be pretty confident that software piracy will find some way around any protection that seems to be offered by cloud computing solutions.”
So, overall, we think it’s a little too early for us all to breath a huge sigh of relief, relax and lower our guard on the software piracy front. We feel the world may still be struggling with the issues of software piracy and copy protection for a little while yet.
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[...] Though vendors are making progress in many of these areas there is stall a long way to go. But Bartels thinks that in developing economies, which will deliver much of the growth in software licensing revenues in the coming years, there may be still greater barriers to SaaS adoption, in the form of deeper concerns about security, and issues around internet connectivity and power supply which we discussed in a previous article on cloud computing. [...]