Waging War on Business

[Darrell Shandrow]

Hi Alan,

As you point out, many people who can't pirate a particular application,
such as Windows XP, simply do without.  So, I'm not saying that the ratio of
pirated copies to lost sales is necessarily one-to-one.  I'm just saying it
is something north of zero, and thus software developers must pass that cost
along to legitimate customers.

Darrell Shandrow - Shandrow Communications!
Technology consultant/instructor, network/systems administrator!
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----- Original Message -----
From: "Alan Dayley" <alandd@mindspring.com>
To: <plug-discuss@lists.plug.phoenix.az.us>
Sent: Wednesday, February 12, 2003 10:52 AM
Subject: Re: Waging War on Business


> -------Original Message-------
> From: Darrell Shandrow <nu7i@azboss.net>
> Sent: 02/12/03 07:13 AM
> To: plug-discuss@lists.plug.phoenix.az.us
> Subject: Re: Waging War on Business
> --[clip]--
> > I think that part of the reason for the high prices has to do
> > with software piracy.  The industry is trying to figure in the
> > costs of such piracy and is passing those costs along to
> > legitimately licensed users.
>
> I have been curious about this argument for a long time and perhaps this
is the forum to ask.  This is not a troll!
>
> How does software piracy "cost" software makers anything?
>
> I am not suggesting that piracy is acceptable.  It is not.  I just don't
see how a unlicenced copy of "ApplicationPlus" costs AcmeSoft anything.  For
that copy they did not have to print manuals, stamp a CD, make a box,
process shipping or, if they track users correctly, provide support.
>
> (On proof reading I can see that tracking users to provide support only to
legitimate license holders is a cost.  Partial answered my own question.)
>
> IF you assume that every person that has an unlicenced copy would have
bought a ligitimate copy if the unlicenced one was not possible, one could
point to lost sales.  However, based on my experience, most of the time if
making an illegitimate copy is not possible or convenient, most people do
without the program rather than go buy a licenced copy.  ie. 1,000
unlicenced copies does NOT equal 1,000 lost sales.
>
> I would think that a very simplified profitablity calculation for AcmeSoft
is:
>
> (cost of producing software) / (number of sales expected) = (single
license cost)
>
> But what you are saying is that the calculation is something like:
>
> [ (cost of producing software) + ("cost" of pirated copies) ] / (number of
sales expected) = (single license cost)
>
> So, back to my original question:  How does software piracy "cost" the
software producer anything that increases the cost of a ligitimate license?
>
> Alan
>
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