How to turn a software pirate into a paying customer

Most anti-piracy solutions try to prevent software from being "cracked" or source code from being plagiarized. Take Microsoft's controverisal WGA (Windows Genuine Advantage), which was renamed Software Protection Platform and was part of a scheme that included a "kill switch" that rendered copies of Windows Vista inert if users failed to enter a legitimate, unique license number.

WGA, however, was prone to malfunction and still vulnerable to cracks, prompting Microsoft to soften its antipiracy tactics with the release of Vista Service Pack 1.

A Waltham, Mass. startup thinks it has a better way. V.i. Laboratories  has high hopes for its new CodeArmor Intelligence product, which, rather than trying to prevent unauthorized use of software, collects data on how and where it is used, and then stealthily sends it back to the software's maker, said Victor DeMarines, Vice President of products at V.i.

The company is targeting makers of high-end software such as product lifecycle management (PLM) and CAD applications, used by large-scale manufacturers, and Electronic Design Automation (EDA) software, which is used by chip and electronics makers. Though not broad interest and often difficult to run without consulting and integration work, such niche software is still pirated, with new releases typically available within 30 days, DeMarines said.

Chenxi Wang, an analyst at Forrester, confirms the problem. "PLM apps are routinely cracked and pirated. So are many other high-value, niche applications," she said in an e-mail. "I've talked to a software vendor who manufactures geology mapping software for oil drilling ...[and] every version of their software has been cracked and pirated."

With CodeArmor Intelligence, ISVs (independent software vendors) can now effectively turn pirated or non-paid-for software into a form of trialware or sales lead, DeMarines said. "It could be a lead to a VAR [value-added reseller], who could go in and say, 'It's great you're using this software, but you need to pay up,'" he said. Rather than siccing the BSA or the SIIA and their lawyers on offenders, "these can be business opportunities for vendors, depending on how they approach it."

V.i., whose founders' previous security startups were sold to Symantec and EMC's Documentum, is one of a handful of anti-piracy vendors.

Arxan Defense Systems has the strongest technology "but is not as user friendly" as other vendors, such as PreEmptive Solutions and CloakWare, said Wang. For now, V.i. stands out as "the only one with an intelligence gathering tool."