There is no escaping the blunt force trauma of the global recession. The fallout dominates headlines everywhere and it is the most frequent conversation starter in business circles. Where it will end and how to ameliorate the impact of the downturn is a subject of much debate and little action. What is not debated however is the real hardship it is imposing on enterprises and people worldwide – job losses, service reductions, and business failures.

An unfortunate consequence of most downturns is a rise in crime. The majority of people won’t steal under any circumstance but the numbers of those who do grow and the frequency of their crimes increases in response to hard times. In an October story, Reuters reported that, “most of the criminologists, sociologists and police chiefs interviewed by Reuters forecast a rise in crimes in certain categories… opportunistic crimes like theft.”

A FAST (Federation Against Software Theft) survey conducted at the start of the downturn queried company directors and found that 79% believed that businesses would be more likely to try to save costs by not securing appropriate software licenses. When budgets are cut sometimes corners are too.

More recently, in a two-month global poll that just concluded, Aladdin asked technology users and software publishers if they felt the recession would ultimately result in greater instances of software piracy. 73% said they believed software piracy would increase.

[View detailed Survey Results]

Whether you believe the absolute accuracy of Reuters, industry associations, Aladdin or even surveys in general, the damages inflicted by piracy on software vendors becomes much more critical in times of economic crisis. Software vendors are under attack at their greatest moment of weakness; sales are down because of recession-induced reductions in demand, and they are reduced further because of increases in theft (software piracy).

The result is more job losses and more hard times. For some of our brethren in the software community, the ones that will be teetering on the edge of survival, software piracy will be what pushes them over the edge and out of business. Sorry, I don’t have the usual funny or witty close for this entry – just a sobering frontline observation about the growing body count from the piracy wars. 

While walking down a cold and crowded city street, I passed a teenager wearing a bright orange T-shirt with a large message that was amusing but vulgar (cannot be printed here). A couple of thoughts came to mind. First, the offer being promoting was truly a generous one by any measure, but that’s my wife’s exclusive domain. Second, aside from the intrinsic benefits derived from the demonstration of free speech, I wondered why some people feel compelled to broadcast this type of message to a larger audience and what type of audience finds it appealing.

We sometimes find answers in unexpected places. In a recent blog entry, Software Developer Realizes That Pirates Are Giving Him Market Feedback, Mike Masnick of TechDirt crosses the line he previously vowed to avoid (10-Jan,2008) and actively promotes the criminal act of software piracy. He does this by justifying the activity and extolling the imagined benefits to the developers who are victims of piracy. The purported benefits of piracy include obtaining supposedly valuable market feedback and generating greater awareness.

I have read many of Mike’s columns and have found him to be an intelligent and articulate voice of the industry. Unfortunately, in this instance he conveniently ignores the simple truth that there are far more efficient and reliable methods for software developers to gather great feedback on their products. Any knowledgeable marketer would much rather receive feedback from paying clients or from a focus-group comprised of their target audience rather than from thieves (unless criminals are their target audience). Mike’s reasoning displays about as much logic as defending the use of rufees so that coeds can get quick and honest feedback about how they look when naked and unconscious, or promoting auto theft so that auto makers can get feedback from drivers on a limited budget .

The claim that “piracy almost always is a leading indicator for what the market wants, but isn't being delivered” may be true but only to the extent that most people would of course rather get everything they desire for free, and some are willing to commit the illegal act of stealing software to satisfy this particular desire. Yes, there are pirates and they steal the most desired items most often. This is an argument for software protection not for free distribution.
Software developers have many proven and effective vehicles other than pirates to get their products into the market. I recall playing countless hours of Doom, the poster-child for a successful shareware strategy. After getting hooked on the free download, I bought the follow-on version. So did a lot of other people and it generated more than $10 million for id Software. There are many advanced licensing solutions available that are designed for this exact application. This is the developer’s choice to make not the software pirates’.

Last questions for Mike: Why use the denigrating term “freaking out” to describe software publishers who act to protect their assets and revenues by using an effective DRM solution or by pursuing action against people that steal from them?  Wouldn’t you do the same? Many developers fight piracy very effectively and as a result they derive more revenues and can invest in developing a better product. I would describe this simply as a smart business practice.  Been wearing any bright orange T-shirts lately?