X Marks the Spot: Following Pirates to New Software License Revenue

Each year, Google’s annual “Frightgeist” survey ranks the most popular Halloween costumes by search traffic. Sitting squarely among the top 20 this year were many traditional garbs, with Pirate in the number 16 spot. As a product marketing professional focused on software monetization and usage analytics, I often wonder how creative (and in my geeky opinion, hilarious) it would be to try a different take on the traditional pirate costume and wear a “software pirate” costume. What would that look like? Perhaps surprisingly, it would likely be dressing as a happy, new paying customer of your software.

Here’s why. Time was, best practices around piracy dictated that businesses put measures in place to get rid of it. Common enforcement techniques still include using hardware dongles to secure an application to a particular user or advanced network based methodology to ensure that the server doesn’t get cloned.

Enforcement is a natural and necessary component of license management, but it’s also one of the aspects of the industry that is changing the most right now. There’s a growing concern that more draconian techniques intended to squash piracy may actually end up hurting the usability of the product for paying, compliant customers and drive up support costs.

Plotting a Course to Convert Unlicensed Users to Paying Customers

Instead, many leading companies are implementing business models based on software usage analytics to stop the losses associated with software piracy and overuse and generate revenue. Software usage analytics is a big enabler here. Applications with piracy and overuse detection and reporting functionality offer up the ability to gather all sorts of information about the infringers that can be used to convert them to paying customers. With more visibility into unlicensed use, the software provider can instead lighten the enforcement techniques, shift toward making the software more available and monetize it instead through the back end.

Organizations that manage licensing with a spreadsheet or a homegrown system that can’t tie into a third-party system or extract data from an entitlement manager are going to struggle here. But enterprise entitlement management can enable new business models by easily identifying opportunities to convert users into paid ones and thereby shifting piracy to become a new revenue stream.

Following Our Own Best Practices

Let’s take a look at an example. Revenera’s InstallShield is a product used by developers to package software for easier installation. Piracy has been a big challenge around the product, with almost every version of the software being pirated since 2015.

The InstallShield team wanted to target two types of piracy use cases:  outright piracy (accomplished through actions such as binary tampering) and license overuse (targeting specially node locked licenses, which are licensed per user). The team was quickly able to integrate Revenera Compliance Intelligence functionality into the next major version release of the product to collect information on both types of usage and see what was happening through the Compliance Intelligence Dashboard. It leveraged this information to create software license compliance opportunities, set up workflows and pursue them. After just two months of the deployment, the InstallShield license compliance team identified 38 organizations pirating and 5 organizations overusing the software, allowing them to begin their revenue recovery program.

The old reaction to piracy and license overuse was to prevent it. But leading companies track its use and target adoption to instead brew a new revenue source (sorry, the top costume search on Google this year was a witch). To learn more about the InstallShield example and the ways in which you could be losing revenue and strategies to stop it, watch our recent webinar: Avoid Unhappy Returns: Proactively Plug Your Revenue Leaks.