New Microsoft Program Aims to Cut Piracy, Increase Profits
"ISVs lose approximately half their realized revenue each year due to piracy and copying. In other words, a software company that generates $10 million in revenues could experience losses in the $5 million plus range." That sobering fact, according to Microsoft, is what prompted it to develop its Software Licensing and Protections Services (SLP Services) 2008 program.
Yesterday, Microsoft announced the availability of its SLP Services suite of programs, meant to help software developers and vendors control illegal use of their software, thereby maximizing profits.
SLP Services consists of three core products:
- Code Protector. Code Protector secures .NET
code against hacking and reverse engineering. It does this primarily
through code transformation. Microsoft says that code transformation "takes selected DLLs
and functions within the DLL and virtually compiles (transforms) them
into a vendor specific format called Secure Virtual Machine Language (SVML). The functions that are transformed to SVML format appear like regular MSIL function (in terms of interfaces), but are much harder to reverse engineer."
- SLP Server 2008. SLP Server's primary role
is to allow ISVs to control SKUs in a more granular way. Called "SKU
Agility," it can create digital licenses that map to a product's
predefined features. That allows ISVs to tailor all, or parts, of a
program to specific customers.
- SLP Online Service. SLP Online is a hosted
version of SLP Server. Having the service hosted minimizes the upfront
cost of the service. It can also add convenience, since it enables licensing and product activation through the SLPS Licensing Portal.
Microsoft originally announced SLP Services at the Worldwide Partner Conference in Denver last July. Redmond started working on it following its acquisition of Secured Dimensions, a company that had developed .NET protection and various licensing programs.
Microsoft painted a scary picture of the costs of software piracy and its impact on ISVs. It pointed to the Business Software Alliance's (BSI) Fourth Annual Global Software Piracy Study released in May, which revealed that more than a third of software installed on PCs worldwide in 2006 was obtained illegally. This cost software publishers an estimated $40 billion in lost revenues, according to the BSI.
Although piracy is worse globally than in the United States, it still has a large impact here, the study claims. The estimate is that one in four software programs on U.S. computers are unlicensed. "Additionally, intentional and unintentional non-compliance with license terms is estimated to cost software vendors some $9 billion in lost revenues each year," the study concluded.
The SLP Service isn't cheap, but Microsoft hopes ISVs will see revenue on the back end that will more than make up for the cost of the program. SLP Server, Standard edition, starts at $23,000 per server per year, or $5,750 per server per year for Software Assurance (SA) customers. The Enterprise version starts at $60,000 per server per year, and $15,000 for SA customers.
The SLP Online Service, per subscription, is $500 per year for the basic plan, $7,500 for Standard, and $20,000 for Enterprise.
In the meantime, there are ways to get it cheaper:
- A free 120-day trial version is available for qualified companies
via the SLP Services Web site.
- MSDN Basic subscribers get a nice perk in the form of a one-year
subscription to SLP Online Basic Service. It's fully functional and can be
used to create and manage a single software product.
- The SLP Code Protector is a free download from the Microsoft
Download Center. It will also be included in Visual Studio 2008, with a
generic Permutation that can only be used for testing.
More information about SLP Services is available here.