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The Cloud, Not More Regulation, Is Likely Answer to Software Piracy [Human Events]
[November 09, 2012]

The Cloud, Not More Regulation, Is Likely Answer to Software Piracy [Human Events]

(Human Events Via Acquire Media NewsEdge) Free market innovation created the software industry. Then it produced the tools that allowed easy theft of intellectual property. It may finally be on the verge of solving the problem it created, by producing secure systems with so many attractive features that customers can't wait to embrace them.

Piracy has always been a huge thorn in the side of the software industry. In the early days of personal computer use, disks containing software code could be easily copied, resulting in huge amounts of lost income to creators. A single buyer could distribute dozens of copies of a program. Businessmen gave copies of favored software tools to their friends. Kids passed around copies of games.

Of course, the industry acted to protect its intellectual property, devising various means of combating piracy. Unfortunately, most of them weren't very effective, and they tended to annoy legitimate users. Copy protection schemes could be defeated. Some of the more aggressive copy protection schemes could actually damage computer hardware, by causing disk drives to behave erratically.


The Internet made the situation worse, providing incredibly powerful new methods to distribute illicit copies of software. Websites published lists of activation keys for popular programs, free for the taking. File sharing across the Internet made piracy quick and easy.

A study from the Business Software Alliance found that 2011 was by far the worst year on record for software piracy, which had become a $63 billion black market- a stiff 14 percent increase over the previous year, and double the value of pirated software in 2003. Fiftyseven percent of computer users admit to using illegally copied software, while 42 percent of all software currently running on the world's computer systems is pirated.

The problem is particularly acute in developing countries. Fifty-six percent of new personal computer shipments were made to emerging markets in 2011, but less than 20 percent of software revenue comes from those regions. That means a whole lot of Jolly Rogers are flying over monitors in certain quarters of the Earth. Not surprisingly, China is a particularly heavy offenderon a per-computer basis, it only spends about 7 percent as much on software licenses as the United States.

Solutions to piracy The Business Software Alliance proposes a number of solutions, including increased public education about software licensing- which sounds like wishful thinking, although the study concluded that many people unwittingly pirate software, by installing it on multiple stations of a single network after purchasing a single-user license. But one proposed solution might just solve the software piracy problem at long last: cloud computing.

The "cloud" is a computer-geek term for online data storage. The incredible speed of broadband communications makes it practical to store and access data on the Internet. This makes information readily available on numerous devices, wherever the user goes. A document started at work can be pulled up and finished at home. There's no need to copy files manually between devices. Cloud storage of downloadable media has become popular, as with the Amazon Kindle, which shuffles books purchased by the user back and forth from an online storage locker.

The popularity of cloud storage could have significant ramifications for piracy. It's already commonplace for software programs to validate themselves through online connections to master servers- a process much more difficult to defeat than any previous method of copy protection, and mercifully painless to the user. The next step in software evolution will be programs that actually run from the cloud, rather than being installed on local devicesa future envisioned by Microsoft's Bill Gates many years ago.

This would be attractive to users from the standpoint of convenienceinstant access to purchased software, no need to worry about backups, no lengthy installation process. And it could virtually eliminate piracy, since there would be no easy way to steal or duplicate software. This would have the highly desirable result of bringing the cost of software down, since the cost of piracy is built into current prices, along with the physical cost of packaging and distribution.

Free market innovation created the software industry. Then it produced the tools that allowed easy theft of intellectual property. It may finally be on the verge of solving the problem it created, by producing secure systems with so many attractive features that customers can't wait to embrace them.

* Intel committee warns against Huawei, ZTE The House Intelligence Committee has issued a report warning American companies to avoid doing business with two of China's top technology firms, Huawei Technologies Ltd. and ZTE Corporation. American government agencies were also advised that including products from these companies in their computer networks could create the risk of espionage. Both companies are heavily invested in telecommunications technology; ZTE is the fourth largest cell phone manufacturer in the world. Although both are private concerns, they are suspected of having hidden ties to the Chinese military and intelligence services. Representatives from both companies have disputed the conclusions in the House report.

John Hayward is a reporter for Human Events covering Technology & Freedom. His email is JHayward@EaglePub.Com.

(c) 2012 Human Events Publishing, Inc.

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