Click here to receive your FREE subscription to Education Channel Partner

Spotlight

The Cost of Piracy to Partners

By: David Nagel

7/15/2008

  • Faster delivery cycle: 40%
  • Faster sales cycles: 31%
  • Cross selling and upselling opportunities: 20%
  • Market expansion: 9%

Cost savings for the reduction of piracy are as follows:

  • Services: 64%
  • Development and testing: 18%
  • Sales and marketing: 12%
  • Training: 4%
  • Research an development: 2%

These percentages are based on separate research on partner profitability conducted from January 2006 to January 2008. (See the bibliography in the report for additional information.)

What Can Be Done?
So how can this be accomplished? Well, that's the multi-billion-dollar question. The report provides several examples of how individual partners have managed to turn lemons into lemonade. And it also provides some tips for realizing increased revenues from customers that pirate software.

One unnamed partner in South Africa, for example, said: "We have made an opportunity of mis-licensing, using it as an 'in' to see customers. We have been able to win long term clients by helping them remain compliant."

Another North American partner takes a different approach, helping to take the edge off customer compliance: "When we released a new version of our software we found many unlicensed versions of the old software. The client was going to uninstall all our software rather than admit to piracy. To help the client we created a custom install license to help them save face, after which they invested more in us and we kept a customer happy."

The report also makes a call to action to partners, providing general tactics for dealing with the issue of piracy and converting loss into potential gain. These include:

  • Creating a formal policy for dealing with piracy;
  • Creating information that can be used by customers explaining the benefits of compliance;
  • Investing in compliance tools and software management tools for customers;
  • Providing input to vendors to help create less confusing licensing policies;
  • Helping to negotiate policies with vendors for customers; and
  • Working with trade associations for "market education, outreach, and enforcement."

The complete white paper, with additional resources and information, can be found in PDF form here.


About the author: Dave Nagel is the executive editor for 1105 Media's educational technology online publications and electronic newsletters. He can be reached at dnagel@1105media.com.

Have any additional questions? Want to share your story? Want to pass along a news tip? Contact Dave Nagel, executive editor, at dnagel@1105media.com.