Risk
8/29/2006
08:10 AM
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V.i. Labs Intro Method

V.i. Laboratories announced a new method for quantifying revenue

WALTHAM, Mass. -- V.i. Laboratories, a provider of software protection solutions for securing high value and mission critical applications, announced today a new method for quantifying the amount of revenue that software vendors realize before and after implementing anti-piracy measures. The method, called “Time to Crack™,” provides software vendors with a benchmark for measuring changes in software license revenues in emerging markets with high piracy rates.

Software piracy is a widespread problem for packaged software vendors who sell their products in emerging markets where intellectual property laws are not as strict. According to the Third Annual BSA and IDC Global Software Piracy Study, the worldwide piracy rate for PC software was 35 percent in 2004. In China alone, for example, the BSA estimates that 90 percent of all software is pirated, representing $3.6 billion in lost revenue for software vendors. UBS AG’s Q-Series research report entitled “A Billion Dollar Opportunity” indicates that piracy rates among enterprise organizations and small-medium businesses (SMBs) are as high as 70 and 90 percent, respectively.

To date, software vendors have taken minimal steps to deter piracy in foreign markets, for three major reasons:

  1. It’s difficult for software vendors to quantify piracy in countries where their presence is minimal and existing global industry metrics for piracy are too broad to apply to their products.

  2. There is a common misconception among vendors that current users of pirated software would not purchase legitimate licenses if pirated versions were unavailable.

  3. Many organizations focus solely on deterring license overuse or inadvertent piracy (keeping honest users honest) versus deterring software cracking, which is predominant in emerging markets.

“There are still many software vendors and providers who believe that deterring piracy will not recover significant revenue in emerging markets,” said Victor DeMarines, director of product management, V.i. Labs. “However, recent studies indicate that rampant piracy exists in enterprise organizations and small businesses where it is possible to recover revenue. These companies will follow the path of least resistance to obtain software. If it’s easier to obtain pirated software, enterprises will take this route. But if a software vendor employs techniques to prevent or slow down the rate at which new software is pirated, data suggests that these organizations will purchase legal software copies.”

V.i. Laboratories Inc.

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