Software Development Times Magazine
Contents
1. SOFTWARE DEVELOPMENT IMEN The Industry Newspaper for Software Development Managers So tware Piracy A Growing Problem Licensing and security vendors admit there is no silver bullet to protect your intellectual property BY LISA MORGAN n 2004 a number of software com panies are going to learn an expen sive lesson the hard way Hope is an ineffective measure against soft ware piracy Some software publishers have thus far failed to adopt software protection and licensing management solutions because they represent yet another expense which results in a higher cost of goods sold and thus higher end user pricing Adding technology also can increase the complexi ty of software products making them more difficult to use which can and does infuri ate end users And software protection and license management products may interfere with the operation and perform ance of the software products they are designed to protect On the other hand software piracy is a growing problem that affects more than just the large companies with high profile cases in federal court According to the Business Software Alliance a global nonprofit organiza tion that helps to shape pub lic policy and prosecute cases 23 percent of software in the United States was pirated in the U S alone in 2002 That translates to US 2 bil lion in lost revenue 105 000 fewer jobs 5 3 billion in2. Secure mobility of digital credentials certificates and keys With a single eToken businesses get a set of ready to use security solutions meeting all their authentication needs web access VPN access and network logon and providing laptop and file security Visit the Aladdin web site at www eAladdin com Contact us International T 972 3 6362222 F 972 3 5375796 Email info eAladdin com North America T 1 800 562 2543 1 847 818 3800 F 1 847 818 3810 Email info us eAladdin com UK T 44 1753 622266 F 44 1753 622262 Email info uk eAladdin com Germany T 49 89 89 42 21 0 F 49 89 89 42 21 40 Email info de eAladdin com Benelux T 31 30 688 0800 F 31 30 688 0700 Email info ni eAladdin com France T 33 1 41 37 70 30 F 33 1 41 37 70 39 Email info Aladdin fr Israel T 972 3 636 2222 F 972 3 537 5796 Email info eAladdin com Japan T 81 426 60 7191 F 81 426 60 7194 Email info Aladdin co jp
3. lost wages and more than 1 4 billion in lost tax rev enue according to BSA Although brand name companies are targets for highly organized bootlegging operations even small companies and indi vidual developers fall victim to software piracy The difference is the small compa nies are forced to go out of business faster SCOPE OF THE PROBLEM Part of the difficulty is that software piracy itself is a misunderstood term even ven dors in the software licensing and security space do not necessarily agree on what types of software piracy are the biggest problems or to what extent Mental images of Johnny Depp on the deck of a tall ship or bootleg software nin jas don t help Software piracy is not limit ed to modern day Robin Hoods or sweat SPECIAL REPORT Software Development Times January 15 2004 shops in Kuala Lumpur Sure individual users share software and organized crime rings are capitalizing on the manufacture and distribution of illegal software that is so well conceived that the products appear to be authentic Pirated software users have been known to actually register fake licens es with brand name manufacturers and get access to specially priced upgrades Most software piracy isn t that sensation al however and it isn t quite as malicious Companies sometimes purchase stand alone products and place them on servers or other wise distribute more seats than they pur chased
4. that a customer will spend thousands of dollars recording a unique sound such as a Star Wars sound clip that can otherwise be easily downloaded and distributed by a freelancer the sound industry apparently uses a lot of freelancers Typically a freelancer works at a num ber of studios so hardware profiling or other mechanisms tying software to a spe cific computer or location does not work in that market In response to the sound industry s unique requirements Sound miner created a freelance mode that encrypts sound files which can be decrypt ed from any location using a public private key scheme Software Development Times January 15 2004 SPECIAL REPORT To further mitigate unauthorized down loads Soundminder keeps a log of all transfers Whenever a file larger than 1GB is downloaded the system automatically sends an alert to the administrator TO PROTECT OR NOT Cost is one reason why a number of soft ware companies have yet to adopt third party software licensing and security prod ucts Apparently companies selling software products at more than 1 000 per seat are the most common adopters because it makes sense to spend some percentage of revenue or tens of dollars per license to protect millions of dollars of revenue Not all software protection and licensing management products lend themselves to aaa Di a i rc a ee ee the low end market however Some ven dors offer pricing schemes that
5. In some cases companies fail to keep track of their software licenses which can result in misuse albeit unwitting in some cas es And of course software administrators and individual end users commonly fail to read software license agreements before clicking the I agree icon which legally binds them to the contract s terms Lack of knowledge or intent is not exact ly synonymous with innocence however Whether a person or company intentionally or unintentionally uses copies or distrib utes unauthorized copies of software the result is the same That person and the company she works for have violated feder al law which can result in criminal and or civil liability MITIGATING THE PROBLEM Software licensing and security vendors are quick to point out that there is no silver bul let that will protect a software company from software piracy absolutely What they can do is make the process difficult enough that the offending party will have to invest consider able time and perhaps money attempting to decrypt files or otherwise work around software license management You can curtail discourage or reduce software piracy but you can t completely prevent it said Yanki Margalit founder and CEO of Aladdin Knowledge Systems in Israel Software developers need to sell more than just software they also need to sell locks and keys The locks and keys come in the form of hardware and software Har
6. are based on some reasonable percentage of revenue which allows the publishers of 9 95 software or games to protect their products as well Vendors and users point out that the cost of software protection shouldn t be the deciding factor Software publishers need to consider opportunity costs the revenue they would have realized if their software had not been illegally copied and distributed Then again if a customer would not have purchased the product in the first place then the software publisher arguably hasn t lost revenue But in the eyes of the feds that s beside the point E Reprinted with permission from SD Times January 15 2004 issue Aladdin SECURING THE GLO AL VILLAGE eAladdin com Since its founding in 1985 Aladdin Knowledge Systems Nasdaq ALDN has been at the forefront of the software commerce and Internet security fields Aladdin s reputation is built upon a comprehensive line of security solutions that meet the needs of businesses operating in a world where quick and easy information accessibility is not only an asset but also a potential risk These products include SECURE SOFTWARE COMMERCE HASP Hardware Against Software Piracy is a hardware based cross platform software copy protection system that Prevents unauthorized use of software applications Protects your software copyright and intellectual property Supports multiple software licensing models The end result is better co
7. dware don gles plug into a USB or serial port and pro vide copy protection Software checks to see if the dongle is present before unlocking the application Software based approaches range from simple product activation such as typing the serial number printed on the outside of a jewel case into a field to server centric methods that authenticate users and the software they use on an ongoing basis Vendors do not necessarily agree about which approach is better Some say dongles are more secure than their software coun terparts Other say that dongles are expen sive to buy expensive to inventory and maintain easy to lose and easy to spoof using a mirror Software methods also can have their weaknesses however For example simple software activation which requires a user to type a serial number into a field may allow a user to install the software on mul tiple stand alone computers without being detected Hardware profiling is one way to get around that but if the user adds or deletes hardware then the software may fail to activate Some software publishers bind software license agreements to software products to thwart unauthorized distribution Users with a little programming expertise can sometimes change a single bit authorizing otherwise unauthorized installation Then of course there are crack programs avail able online that enable users to get around a vendor s software securit
8. n t focus on the detriments of use restraint focus on the positives of customer choice But is that just vendor marketing hype or are their customers and the end customers actually buying into the idea Its a trade off End customers hate licensing and activation schemes said Dan Appleman architect at software protection company Desaware Inc The question is how tight do you want to be Appleman pointed out that tracking the use of software licenses is in effect spying on customers which raises privacy issues Nevertheless software publishers want to prevent the bypassing of licensing one way or another but not all want to employ Draconian measures which is why companies like Desaware offer flexible options that allow for varying degrees of software protection MORE THAN SOURCE CODE Aladdin s security solution HASP is being used in the entertainment industry by Soundminer Inc which provides a search engine for sound effects Soundminer s customers include Skywalker Sound Sony and Warner Brothers Soundminer is using the enveloping fea ture of HASP which encrypts all binaries including code and data Without a hard ware dongle the data cannot be decrypted If the dongle breaks or an unauthorized person uses it Soundminer runs a check against the key s unique serial number and invalidates the key www sdtimes com Justin Drury partner and head of soft ware development at Soundminer said
9. ntrol over who uses your software which features they can use and safe revenue market share expansion Privilege Privilege is a revenue enabling software security platform that lets you t Distribute secure software via CD ESD or peer to peer networks Protect software copyright and intellectual property Reduce distribution operational costs Integrate with in house or hosted Web stores and shopping carts By protecting your software once you securely bring it to the market across all your channels and gain confidence that you are protected against piracy unauthorized use and casual copying ENTERPRISE AND INTERNET SECURITY eSate eSafe 4 is a gateway based integrated content security solution and service that e Proactively protects networks against viruses worms spam and non productive content e Enables real time inspection of Internet traffic without reducing network performance e Reduces the risk of P2P IM security exploits and blended threats e Enables lower total cost of ownership with an integrated modular design eSafe and its fully integrated content security solution enables more network uptime decrease cost of ownership increases employee productivity and strengthens network security eToken eToken is a USB based smart card device for cost effective strong authentication and eCommerce It provides Enhanced security and ensures safe information access Improved and cost effective password and ID management
10. y mechanisms or to download bootlegged copies of software To make software piracy a little more difficult third party vendors are respond ing with shell wrappers and APIs that pro vide varying degrees of protection Wrap ping is quick easy and relatively cheap The use of APIs requires more time and effort which some users say is well spent APIs allow software developers to encrypt different files such as the software license the user manual and different components of a software program separately as opposed to hiding a key in a hidden file which can be discovered Clearly APIs provide a more granular level of control than wrapping MORE THAN SOFTWARE PROTECTION Aladdin and Rainbow Technologies Inc www sdtimes com a cece inh ri ie a Laa en aa point out that their API technologies not only allow companies to mitigate unautho rized software use and distribution they also enable software publishers to explore new sales models such as limited use demos subscriptions transaction based sales and product updates and upgrades The technology allows software publish ers to control which users have access to which products or product features so for example a software company can send a demo product to a customer that can be transformed into a fully functional product Alternatively software publishers can turn features on and off depending on what the customer is willing to pay for In other words do
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