But things are changing; SaaS, the cloud and virtualization offer a whole raft of new software licensing options which we are likely to see emerging over the next 12 months.

The new software licensing models do potentially offer savings for business.  CIO’s have traditionally over-bought on software licenses for applications hosted in-house. The new models will allow CIO to purchase software licenses that are a much better fit for their actual needs.  But accessing those savings is going to present some real challenges, at least at first.

Two of the new licensing models being most widely discussed are pay-per-use and subscription software licensing.

Subscription software licensing starts out by looking fairly straightforward. You decide how much access you need, then get discounts based on the length of time that you are prepared to commit for.  All fine and dandy and easy to manage.  Until that is you factor options like peak and off peak usage into your subscription pricing – a bit like your gym membership, or your electricity bill.  Do CIO’s really have a handle on where their usage peaks and troughs are, and can they manage those to gain financial advantage in their software licensing deals?

Likewise with the pay-per-use software licensing model.  Sounds like a great idea.  But what is a “use”? Is it a logged-in session, a screen view, use of a particular feature? And are all uses created equal? For example, would we be charging the same for an hour spent creating an Access database, and an hour spent entering data into that same database?

The pay-per-use model seems like it offers the potential for much fairer pricing in software licensing, but there is a lot of work to be done before such a model can be effectively deployed.

On the buyers’ side, many corporates have hundreds of software licenses for applications deployed within their businesses.  Creating systems to gather and analyse data on the useage of these applications is gong to be quite a task.  But is is a task that will need to be addressed if as a priority if companies are going to benefit from the savings offered by these new software licensing models.

And for vendors the story is much the same.  Jon Gillespie-Brown CEO of software licensing solutions provider Nalpeiron says: “When a vendor sells a software license, traditionally they know what they have sold, they probably don’t know what has been deployed and the almost certainly don’t know what is being used.  Our licensing solution allows the vendor to see when software has been deployed and which features are being used.  This kind of functionality in licensing solutions is going to become critical as new pricing models evolve and vendors need to get closer to their customers.”

Thomas Wailgun, reporting in Computer World on an interview with Amy Konary, IDC’s research director of software pricing, thinks these changes could lead to the emergence of a new role on the buyers’ side:  Economist CIO.

SL.tv thinks that on the vendor’s side we are going to see a lot more openings for “customer champions” and a bonanza for the market research people!

Related posts:

1. Dell buys software license management company
2. Time to Review Your Software Licensing Policy?
3. Software License Management Solutions – a Buyers Guide

Robert Holleyman of the Business Software Alliance is quoted as saying “We’re really stalled on this process.” Last week he visited the Capitol to voice the industry’s concerns.

SL.tv wonders whether  Holleyman’s criticism of China could have prompted the announcement by South Korea that they intend to reduce software piracy rates to 35% by 2012. South Korea’s illegal software usage rate currently runs at 43%.

In an announcement from Seoul on March 11th Yu In-chon, the Culture, Sports and Tourism Minister said: “We will lower South Korea’s illegal software usage rate to 35 percent by 2012, which is the average level held by OECD member states,”

Yu said the ministry will conduct intensive research on 2,600 public companies and 1,200 private companies to examine the country’s overall software use.

So, pretty depressing figures for anyone trying to make a living from software publication.

Maybe things are better in Europe?  Well yes, in parts.  The software piracy rate in most of Europe runs at around 25%.  With the notable exception of the South of France where EU Politics Today reports that illegal software usage rates run at nearly 50%

“The south west region of France has, far and away, the largest percentage of software piracy incidents in the EU, according to a new study.

Almost half of the software in the southwest of France is thought to be pirated. France, in general, is believed to have a 2-in-5 rate of illegal-to-legal software. In countries such as the UK and Germany, a little more than 25% of all software is pirated.

Although one could point to several reasons for the eye-opening amount of pirated software, France’s attitude toward Internet control, which has made it one of the more oppressive governments in the EU toward technology, is often cited by proud pirates as their driving force behind theft.

As CeriseClub, a French Internet company, told The Times, “The French take a sly pleasure in getting round all the systems put in place, and it’s very difficult to persuade them to do otherwise.”

Perhaps things are better in North America then? Well the picture in the USA and Canada is comparatively good actually.  According to the Business Software Alliance’s Fifth Annual Global Study the USA comes in at #107 of 108 countries surveyed with a very respectable piracy rate of 20%.  Canada is clearly keeping close tags on the pirates too, coming in at #91 with an illegal software usage rate of 33%.

Looking at the US software piracy rate of 20% SL.tv can quite understand why the BSA are unimpressed with the progress China are making.

Related posts:

1. Microsoft Loses Hope in China
2. Apple App Store Has Lost $450 Million To Piracy
3. First successful criminal case to crack down on software piracy in China

In this podcast Jason D. Poole, Senior VP of the US Institute of Languages, discusses his candid views on Software Licensing, Software Piracy and Software Copy Protection.

The US Institute of Languages moved from their own in-house system to outsourcing their software license management but before they made this important change they had alot of internal discussion and also met with others who had built their own systems to get their advice, the feedback was instructive. Also, the CEO didnt want to move to a stronger protection and Jason had to convince him of the merits of a change along with the issues and costs. Finally, Jason was once a Software “cracker” himself and his story of his change in attitude as “poacher turned gamekeeper” is interesting for any Software ISV.

He discusses important industry questions like:

1. Love it, hate it or necessary evil? What are the pluses and minuses of implementing a licensing system?
2. Tell us a little about your most recent implementation, what were the benefits from the investment?
3. What vendors have you tried and what were your impressions of them?
4. What do you think is better, hardware dongles or software activation and why?
5. What other reasons would you use software licensing?
6. What do you think of developing license management in-house vs. outsourcing?
7. What are your general thoughts about software piracy?
8. Some developers hate DRM, Why bother with copy protection or licensing at all?
9. What would be your top tips for someone starting out with licensing?
10. Is there anything else you would like to share with the audience to help them understand more about software licensing and copy protection?

Click below to play the podcast:

About the ISV:

The U.S. Institute of Languages was formed in 1995 and developed The Visual Link™ Spanish Course, an unparalleled method for learning Spanish.

The Course has been sold and used by individuals in over 130 different countries around the world.

The course has also been, or is currently being taught, at major U.S. corporations, government agencies, and universities. The success of the course has come because of one basic reason–it really works!

It helps individuals learn to speak and communicate in Spanish in an easy to use, fun and effective format.

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1. ISV Viewpoint Podcast: Talking Software Licensing with the CTO of Alien Skin Software
2. Watch the YouTube video on Software Licensing, build vs buy

In this podcast Finley Lee, CTO Alien Skin, discusses his candid views on Software Licensing, Software Piracy and Software Copy Protection.

Alien Skin tried a number of solutions to controlling the licensing of their software and recently moved from an in-house system to outsourcing to a third party service.

Finley tells us about his views on the history of Alien Skin’s use of application licensing and how they moved to their current Software License Management solution, letting us know how they did it and what the outcome has been so far.

He discusses important industry questions like:

1. Love it, hate it or necessary evil? What are the pluses and minuses of implementing a licensing system?
2. Tell us a little about your most recent implementation, what were the benefits from the investment?
3. What vendors have you tried and what were your impressions of them?
4. What do you think is better, hardware dongles or software activation and why?
5. What other reasons would you use software licensing?
6. What do you think of developing license management in-house vs. outsourcing?
7. What are your general thoughts about software piracy?
8. Some developers hate DRM, Why bother with copy protection or licensing at all?
9. What would be your top tips for someone starting out with licensing?
10. Is there anything else you would like to share with the audience to help them understand more about software licensing and copy protection?

Click below to play the podcast:

About the ISV:

Alien Skin Software has been producing cool graphics software since 1993. In the early days we made the first drop shadow filter for Photoshop. Since then, we have released a steady stream of highly regarded tools for photographers and graphic designers. We distill advanced math and cutting edge research into simple tools that render beautiful pictures. Our reputation for bug-free software and fast, friendly tech support has created an ever growing band of loyal customers.

Finley Lee is an experienced software developer and engineering manager. Since 1996 he has developed award winning plug-ins for Adobe Photoshop. In his current position as CTO with Alien Skin Software, he manages product engineering and technical operations.

Related posts:

1. ISV Viewpoint Podcast: Talking Software Licensing with the VP of the US Institute of Languages
2. Watch the YouTube video on Software Licensing, build vs buy

So why repeat it? Well many folks seem to think it’s OK and some just “forget” what can happen to them if they use pirate software or they simply don’t manage their licenses correctly. This seems to be one of those areas where “it will never happen to me” seems to apply when it comes to getting caught or fined for not paying for the software you use.

The BSA have this to say about it:

Software piracy can ruin businesses. Using software for which you do not have a license could harm your cash flow, damage your reputation, and result in loss of all precious company data.
Using illegal software has serious, detrimental effects on organizations. Plus, companies forget that there is an incentive to keep on top of your software management – it can actually save you money!

In a recession it’s always tempting to “save money” but perhaps not keeping up to date with your license fees or copying a poorly protected program to all the office machines. But it’s all “theft” in the end.

There are many different forms of piracy. In this case, we are referring to the unauthorized use of copyrighted software. This sounds quite far removed from the daily demands of running a business, but using software without a valid license is an infringement of copyright and exposes your business to legal, financial, technical, and reputational risks.

In the end for businesses a fine would be bad but the PR hit would be much worse. If your business uses software it didn’t pay for and it get exposed what does this say about the rest of your business practices? what will the press say about your directors and staff that they don’t pay their dues or are incompetent?

Read the full article about the topic here: http://www.smeweb.com/technology/features/software-piracy-a-business-issue-070917.html

Related posts:

1. Software License Agreements in your Business: do you have a clear picture?

This tends to be regulated via a document called the End User License Agreement, or EULA. Though software licensing can be a paper agreement, it is most often imbedded in the software itself as part of the installation process. In larger corporations much more complex agreements tend to be in place that require considerable legal expertise to manage and negotiate.

As software is "licensed" and not sold to the users an agreement is required to define the "rights" that the user gets when they pay for said license. A software licensing agreement protects the authors copyright and intellectual property rights (IPR) by placing restrictions on the end user in relation to the usage of the application. For example: duplication for purposes other than backup, installation on more than one computer, editing the code, or changing the program in any way is usually forbidden unless the product is "open source". Software licenses might also restrict reverse engineering and bypassing controls intended to cut down on pirating, technology for achieving this is usually referred to as "copy protection software".

Most EULAs also include statements to protect the publisher in the case of any unforeseen circumstances that might arise as a consequence of using the software. This could refer to anything from a computer crash to loss of data, time or income. In addition, generally due to the nature of software no or a limited warranty is given to the suitability or performance of the software.

In general if you are a software publisher it is critical that you "license" your software to the recipient very carefully in order to retain your IPR and the ability to generate revenues from your work. It is also important that you protect yourself from the various legal issues that arise from selling software.

If you are a user you need to be sure what type of license you need and be careful not to abuse the basis  of the license or you could be accused of "software piracy".

Publishers who wish to enforce their software license tend to use other software applications to help them control their IP and these tend to be referred to as "software license management" technologies.

Related posts:

1. What is a Software License?

There are many different types of copy protection working at many different levels. Companies wanting to protect their source code and binaries have a confusing array of options. Part of the reason for this involves the way that the copy protection industry developed. Various techniques evolved over time, often in parallel with each other:

Manual protection—literally!

Copy protection evolved to help software vendors combat an enemy—the software pirate. Because the war against piracy is fought on a virtual battleground, the rules of engagement change frequently as the weapons evolve. In the early days, for example, the weapons used against software pirates were often analogue.

Software publishers would ask questions about the text of the manual accompanying the program, meaning that unless a user had the manual, the software would be impossible to use. Pirates soon got around that problem by photocopying the manuals, until photocopier- proof manuals came along, at which point they had to either become more devious or less lazy, re-keying the manual by hand.

Encoding code: making software secret

Software vendors became more devious, encrypting their code to make it impossible for crackers to disassemble the binary files. This stopped crackers for a short time, but not for very long—they soon realized that although the source files were encrypted on disk, they could not be encrypted in memory because of the performance overhead involved in decrypting code during execution. Software vendors were using loader programs to take the encrypted disk-based file and load it into memory, decrypting it in the process. Once the program was in memory, it was unprotected and therefore vulnerable to the conventional analysis that enabled crackers to strip the copy protection from the source code.

Debuggers proved to be an invaluable tool for the pirates and led to the continuing rise in cracker clubs and the emergence of the warez community, which distributed cracked programs online. While many pirates sold bootleg software for commercial benefit, others cracked and distributed the code as a hobby, enjoying the status associated with being the first to break a particular program’s copy protection.

Riding the loader

The discovery that pirates continued to thwart copy protection mechanisms led to yet another stage of development, as software vendors began introducing loaders that sucked parts of the encrypted program into memory separately, on an as-needed basis. This made it difficult for crackers to analyze the source code using a debugger, because it was never all in memory at the same time. It was difficult, but not impossible. Innovative crackers learned to simply run the program repeatedly through all of its configurations, examining the decrypted segments
as they appeared until the whole binary had passed through the RAM, in a technique known as ‘riding the loader’.

The dongle

Using accompanying text to verify the authenticity of the software was only ever going to be a short term solution. Instead, software vendors took the battle to a more sophisticated level. One popular method in the early days was hardware protection, using the dongle.

This was a plug-in device that would connect to one of the machine’s interface ports. The software would check for the presence of the device before it would run. While effective, dongles were expensive to produce, and so cheaper systems had to be devised.

Today is very different, with a number of options to choose from including the Dongle, Wrapper software and Software Developer’s Kits.

Related posts:

1. Copy Protection for internet fraudsters.
2. Software copy protection methods of old
3. USA Leads the way in Copy Protection.