Software tracking could turn Chinese pirates into customers

IDG News Service - China has long been a major hotspot for software piracy. Efforts to track unlicensed software use, however, are giving companies a chance to find the offenders and turn them into customers. Or in some cases, targets for lawsuits.

V.i. Labs, a U.S. firm, helps makers of engineering and design software track the unlicensed use of their products. Pirated software from 12 V.i. Labs clients had a market value of US$1.2 billion in June 2011, half of it in China, said Vic DeMarines, vice president of products for the company.

"China has been a big issue," DeMarines said. "A lot of companies have written piracy off in China because they don't think you can do anything about it."

While the Chinese government is working toward eliminating piracy in the country, weak penalties and a lack of enforcement have led to a high usage of unlicensed software products, according to experts. In 2010, the market value of pirated software in China totalled US$7.7 billion, putting the country second behind the U.S., according to estimates from the Business Software Alliance.

In spite of the challenges, enterprise software makers are better positioned to turn some of those pirated copies into sales, DeMarines said. This is because their products are generally used by larger companies, which are easier to track and can afford to purchase licensed copies of the software.

"We think that's a better way to reduce piracy overall," DeMarines said "You need to target the organizations that should have the ability to pay license versus going after individual users or the people who crack the software."

Even if vendors add security to their products, software pirates need only 30 to 90 days to make unlicensed copies available over the Internet, DeMarines said.

V.i. Labs offers code its clients can integrate with their apps to track usage. Forty of them use V.i. Labs code to track when an installed application shows signs its a pirated copy. The data collected makes a record of what organizations in China are using unlicensed copies across how many different PCs. In Beijing alone, the company has found more than 5,000 different computers using unlicensed CAD software.

Clients have then used the data to reach out to the potential customers, who might not be aware they are using unlicensed software, DeMarines said. In China, most of the pirated software V.i. Labs finds is being used by manufacturers, design companies and universities.

V.i. Labs reports its clients recovering from 10% to 25% additional annual license revenue because of the data provided. In China, the most successful cases involve clients targeting firms that have a presence in the U.S. or are already active customers.