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There are several kinds of software piracy. The bottom line is when software is pirated, the developer does not receive compensation for their work.

Effects of Software Piracy

When software is pirated, consumers, software developers, and resellers are harmed. Software piracy increases the risk consumer’s computers will be corrupted by defective software and infected with viruses. Those who provide defective and illegal software do not tend to provide sales and technical support. Pirated software usually has inadequate documentation, which prevents consumers from enjoying the full benefits of the software package. In addition, consumers are unable to take advantage of technical support and product upgrades, which are typically available to legitimate registered users of the software. Pirated software can cost consumers lost time and more money.

Developers lose revenue from pirated software, from current products as well as from future programs. When software is sold most developers invest a portion of the revenue into future development and better software packages. When software is pirated, software developers lose revenue from the sale of their products, which hinders development of new software and stifles the growth of the software company.

Kinds of Piracy

End User Piracy -

Using multiple copies of a single software package on several different systems or distributing registered or licensed copies of software to others. Another common form of end user piracy is when a cracked version of the software is used. Hacking into the software and disabling the copy protection, or illegally generating key codes that unlocks the trial version making the software a registered version creates a cracked version.

Reseller Piracy -

Reseller piracy occurs when an unscrupulous reseller distributes multiple copies of a single software package to different customers; this includes preloading systems with software without providing original manuals & diskettes. Reseller piracy also occurs when resellers knowingly sell counterfeit versions of software to unsuspecting customers.

Indications of reseller piracy are multiple users with the same serial number, lack of original documentation or an incomplete set, and non-matching documentation.

Trademark/Trade Name Infringement

Infringement occurs when an individual or dealer claims to be authorized either as a technician, support provider or reseller, or is improperly using a trademark or trade name.

BBS/Internet Piracy -

BBS/ Internet Piracy occurs when there is an electronic transfer of copyrighted software. If system operators and/or users upload or download copyrighted software and materials onto or from bulletin boards or the Internet for others to copy and use without the proper license. Often hackers will distribute or sell the hacked software or cracked keys. The developer does not receive any money for the software the hacker distributed. This is an infringement on the developer’s copyright.

Another technique used by software pirates is to illegally obtain a registered copy of software. Pirates purchase the software once and use it on multiple computers. Purchasing software with a stolen credit card is another form of software piracy. Unfortunately there are many kinds of software piracy that has hampered the software industry.

These types of software piracy have hampered the software industry. For the software industry to prosper and further develop useful software for consumers please support and pay for software. This results in better software for all.

1. What determines the software price? Is it Per Seat or Per User or Per Processor?

The cost of software is determined in many ways. The two most popular ways are Per Seat or Per Concurrent User. Per Seat is determined by how many seats in your business will be using the software at any given time. On the other hand, Per Concurrent User is based on a set amount of users that can access the software at one time. (Example: concurrent users means a program with a license for 5 users can be installed on 100 machines but only a maximum of 5 people can use the system at once.) Per Processor is calculated on how many machines (PC’s or servers) the software will be running on. Many larger enterprise software applications use this method to determine their prices.

2. What types of on-site services are included in the purchase?

Many programs that are higher in price should include some amount of on-site services or support. If it does not, ensure that both (service & support) are built into your contract before purchasing. But, beware that this is the area where companies make most of their profit. Some companies count on your returning with requests for customizations of the software. Now that you have the software and have spent significant time purchasing hardware and dedicating resources, they know you are already “half way in the pool”; they also know that you will have trouble refusing to pay extra money to get what you want. These services can include anything from training classes, customizations, or help with installation issues. In the case of local software companies, keep in mind they should automatically provide some sort of on-site services (at a minimum) before purchasing. This can only help to streamline your implementation process and increase the likelihood of your success, with the added benefit of a higher return on investment (ROI). Who wouldn’t like to have that?

3. Is there a guarantee of satisfaction with their software?

This is most widely overlooked when purchasing software. Sometimes unsatisfied users will expect a refund after deciding that it is not what they want. My experience has been that once the developer receives payment for software, it can take next to a miracle to get a refund of any kind. Prior to purchasing your next piece of software, be sure to find out their return policy and number of days that you can have the software in your hands and still be able to send it back to get a full or partial refund. With custom-developed software it can be even trickier for the buyer, you will need to build this into the contract before work begins. It goes without saying how important it is to determine this up front in case you change your mind.

4. What is the turnaround time for getting “bugs” fixed?

Some companies will say that they will fix software issues as soon as you find one. There are others that will compile the list of “bug” fixes and release it on a scheduled basis convenient for them. This can happen either monthly, bi-monthly, quarterly or yearly. Neither path is better or worse, as long as you are dealing with a reputable software company that stays true to their word. Knowing this before purchasing the software allows you to better handle your software end-users and enables you to provide a more accurate time frame of when your users will see changes or have their issues resolved.

5. How often do program updates go out and do they notify customers?

This is another widely overlooked key item. There are two lines of thought that companies can use for updating customers. The company might decide not to notify its customers at all when updates rollout. They may think that if the customer has a problem they will contact them. At that time would they inform the user of an available update? Beware of this method of service, or lack there of. Steer clear of companies that do not provide this as an option to their clients. The second line of thought would be for the company to notify its customers regularly about updates. They may also offer an option of including the customer on a mailing list. In this case be sure that they have multiple contacts that are on the email distribution list so that everyone who should know will not be left out of communications loop. If the software company does not offer either one of these options, you might want to reconsider your decision.

6. Is the proposed software scalable in design?

Software that is scalable in design simply means that it can easily grow with your business, at minimal cost to you. Factors include end user customizations, current database structure, and inputs and outputs like reports, and connectivity to your other database systems. Scalability is very important for small businesses, because they are dynamic in growth. No one wants to jump through hoops of testing, development, customizations, and training, to purchase software only to find out a year later that you have outgrown it and you need to replace it. With proper planning at the time of purchase only you can increase your chances for a successful software experience.

7. Can the system be customized to meet your business needs?

If you require customizations to the software to meet a specific need, a good rule of thumb is that it should be no more than a 1/3 of the price of the software price. Never forget that many times software companies will negotiate with you on customization. As a customer any software company worth your time should want to keep you happy. In some cases there may need to be some give and take by both parties. A good rule of thumb would be to always discuss your needs with management directly. Gatekeepers tend to drag their feet at times. Purchasing software knowing that you will need to make major changes should be a sign that you really need to take a step back and look at all of your options including: in-house development, outsourcing, and partnering with software developers to cut the price.

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