China and the Future of the(ir software) World
This weekend brings the much anticipated China and the Future of the World conference here on UChicago's campus. The students organizing the event have brought some really great speakers to the event, including Theodore Schaffner, SVP of Corporate Development for Motorola.
After listening to him speak about some very mildly interesting things dealing with Chinese and American business relationships, it occurred to me that there's one very unintentional -- and not often talked about -- benefit of the shift towards Software as a Service (SaaS): The abolishment of software piracy.
Microsoft's piracy rate in China is 90% (and higher in other countries). They just invested a billion dollars to "win over officials it believes can crack down on piracy." A billion dollars!
Google, on the other hand, has a 0% piracy rate in China. 0%! All because their apps are web-based. Salesforce.com has a 0% piracy rate in China! All because their apps are web-based.
Running software in a web browser places control in the hands of the software company, not in the physical media (read: CD-ROMs) of the software. There is no longer a need to find ways to enforce Product Keys while installing software -- the only necessary item is a valid credit card. And, while credit card theft is a large problem, the fact is it's much tougher for the people distributing pirated software for $1-$5 to distribute stolen credit cards. Stealing credit cards effectively doesn't scale the way stealing software does (crack product key once, burn infinitely)
If the SaaS trend continues as it has, this unintentional benefit may be as or more valuable to software companies as all the other benefits.
Tags: IP, intellectual property, piracy, software, Microsoft, Google, China
After listening to him speak about some very mildly interesting things dealing with Chinese and American business relationships, it occurred to me that there's one very unintentional -- and not often talked about -- benefit of the shift towards Software as a Service (SaaS): The abolishment of software piracy.
Microsoft's piracy rate in China is 90% (and higher in other countries). They just invested a billion dollars to "win over officials it believes can crack down on piracy." A billion dollars!
Google, on the other hand, has a 0% piracy rate in China. 0%! All because their apps are web-based. Salesforce.com has a 0% piracy rate in China! All because their apps are web-based.
Running software in a web browser places control in the hands of the software company, not in the physical media (read: CD-ROMs) of the software. There is no longer a need to find ways to enforce Product Keys while installing software -- the only necessary item is a valid credit card. And, while credit card theft is a large problem, the fact is it's much tougher for the people distributing pirated software for $1-$5 to distribute stolen credit cards. Stealing credit cards effectively doesn't scale the way stealing software does (crack product key once, burn infinitely)
If the SaaS trend continues as it has, this unintentional benefit may be as or more valuable to software companies as all the other benefits.
Tags: IP, intellectual property, piracy, software, Microsoft, Google, China
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