Global Protection Is a Major Concern Amongst European ISVs

March 5, 2005 -- Global figures provided by the BSA (Business Software Association) statistical research institute show that nearly 36% of software solutions are installed from pirate / illegal copies of applications.

At European level, this figure increases to 50%. MediaDev conducted a survey amongst European software publishers to assess how they are tackling the issue.

We interviewed 1000 ISVs (Independent Software Vendors) in Germany, the United Kingdom, France and Italy. 70% of publishers we interviewed had some form of piracy prevention solution in place. We found German ISVs to be best protected with 75.86% having some form of anti piracy solution, this figure stood at 75.36% in France, 70.18% in Italy and 57.14% in the UK.

This study assesses the impact of the threat of piracy in Europe. We focus on the threat as perceived by the ISV, the solutions implemented to protect from the threat and the impact that size, distribution model and region have when selecting anti piracy solutions.

Size of the company, a determining factor

"Small" ISVs

Within smaller ISVs (1 to 10 developers), we observe a general tendency (more than 75% of those interviewed) in Germany, France and Italy to have some form of protection from piracy.

In the UK nearly two thirds of small companies questioned had no protection. The reason given for this shortfall was primarily that the development projects worked on by these teams were too small to justify development or procurement of a security solution. Lesser protection in the UK can also be explained through the fact that it is one of the least affected countries (source BSA). As the threat is smaller the installation of piracy prevention solutions is less critical.

Of those small ISVs who do employ an anti piracy solution there are two main types utilised. In France and Italy more than 66% of choose to make users authenticate via a password and/or a key. In the UK and Germany software protection solutions are used to a greater extent with more than two thirds of small ISVs using a third party provider.

More developers, more protection

As we would expect, as the size of the ISV increases, so too does the tendency to deploy some form of anti piracy solution. 20% of ISVs employing between 10 and 50 developers do not employee any anti piracy solution. This figure falls to 10% for ISVs employing between 50 and 100 developers. We found no instances of ISVs employing over 100 developers with unprotected applications.

The larger German and UK based ISVs remain faithful to commercial security solution with more than 75% utilising a third party provider. We found bespoke anti piracy solution development and encoding to be equally popular amongst the remaining ISVs in these regions.

Italy maintains a strong preference for authentication with 66% of ISVs using this method of protection.

French results also remained consistent with findings for small ISVs in that region. ISVs select authentication by password and/or key (58.33%). However, a encoding proves strong second choice with a third of vendors in the 10 - 100 developers bracket selecting this method of protection.

Distribution Model

Regardless of region, the method of distribution employed by an ISV clearly has an impact on the nature of the anti piracy solution selected. We look at CD, ASP model, client-based installations and downloads.

CD

ISVs distributing applications on CDs mainly select software solutions (27.59%). In-house, bespoke development is a close second (19.54%) followed by the authentication by key or password (16.09%) and encoding (14.94%). 21.84% of European ISVs employing this distribution method have no protection against piracy.

ASP Model

ASP providers also predominantly select software solutions (38.24%). Encoding and Authentication by key or password are each used by one in five ISVs - 20.59% and 17.65% respectively. 14.7 %of providers who distribute via an ASP model remain unprotected against piracy. Bespoke solutions are developed in house by 8.82% of these ISVs.

Download

Primarily due to the nature of the distribution model, providers of applications available for download are prone to utilise authentication by key or password (38.24%). Further to this, software solutions are used by 26.47% of providers, encoding of the data by 17.65% and in-house solutions by 4.81%. 12.83% of these ISVs remain unprotected.

Installed at location

Solutions installed at customer locations often have no protection (33.64%). Authentication by key and/or password is used by 22.73% with 17.27% selecting software solutions. 15.45% of ISVs distributing via this model encode their data with 10.91% using in-house solutions.

ISV satisfaction and looking to the future

We asked the ISVs how satisfied they were with the piracy protection they had in place and how they perceived the threat of piracy to their business. We found that those ISVs distributing their applications online were most concerned with 80% of those questioned already having made application security their number one priority. ISVs distributing via an ASP were also placed the issue at the forefront with 76% identifying it as a priority. With ISVs delivering applications on CD and installing at customer locations, opinions remains divided with one in two identifying application security as a concern.

ISVs who install applications directly at the customer locations perceive the security threat as weak. Security is obviously taken into consideration but is not considered a priority. We noticed that providers distributing via CD seemed resigned to not being able to fully prevent piracy. The nature of the distribution model is such that security is often perceived as a method reducing rather than preventing piracy.

ASP distributors are those most satisfied with the protection they have in place. On average, those ISVs who provide applications via an ASP distribution model gave their current security solutions eight out of 10 when asked to grade them. We found that those ISVs who make applications available online for download were least likely to be satisfied with their current solutions with the average provider grading their solution at five out of 10. These findings are clearly tied to the distribution models. Those ISVs who distribute via a less secure model perceive threats to be greater and their applications to be less secure.

Regardless of distribution model, the vast majority of ISVs perceive the threat of piracy to be on the increase. Near than two thirds of those interviewed said that their year on year spending on application security increases.

Europe-wide conclusions

If we exclude size of ISV, distribution model and region as factors, we found that of those ISVs who do employ application security solutions, 43.18% commercial third party solution, 32.39% choose to make users authenticate by password and/or key, 14.77% develop their own security solution and 9.66% encode data.

Of those ISVs who use a commercial security solution, we found that 32.35% are using solutions provided by Macrovision and 17.71% using solutions provided by Aladdin.

The general tendency is that ISVs are broadly satisfied with their anti piracy solutions with 94% of those who do use a solution grading it at seven out of 10 or higher.

Safety is a priority and major concern for 58% ISVs that we interviewed. For 63%, protection has increased over the past year.

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