Cloud Computing: Piracy Killer Or New Infringement Avenue?

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As more applications move to the cloud and software publishers embrace the SaaS model, software piracy will decline and eventually become a thing of the past.

Or, maybe it won't. Maybe users will simply find new ways -- trading SaaS account login credentials, or setting up "dark clouds" -- to get around paying for software.

A debate has been sparked by new data from the Business Software Alliance (BSA), which surveyed nearly 15,000 PC users in 33 countries; the study did not include smartphones or tablets. The survey shows that 42 percent of respondents say they share login credentials for paid cloud services inside their organizations.

Robert Holleyman, president and CEO of the BSA, wrote in a blog post that sharing login credentials doesn't necessarily equate to piracy -- some cloud services may allow multiple logins simultaneously on a single account -- but in many cases such activity does constitute license abuse or a violation of terms of service.

The BSA's data has been criticized by some media outlets, most notably The Economist, which questioned some of the conclusions as well as the wording of the survey. For example, they argue that some questions don't specify whether sharing login credentials violates the terms of service or licensing for a paid cloud app.

But, the BSA is sticking to its guns and maintains the topic of "cloud piracy" is cause for concern. Matt Reid, senior vice president of external affairs at the BSA, said while cloud piracy may not be on the same level as traditional software piracy, the data is cause for concern. "At this point, making a direct assessment is difficult because cloud is new and fast growing," said Reid. "But, we've been looking at trends, and what we've learned is that the conventional wisdom that piracy just goes away in the cloud is not true."

That conventional wisdom, ironically, has been echoed by some of the BSA's own members; Adobe Systems CEO Shantanu Narayen told Forbes in an interview last year that cloud services will significantly reduce piracy, thanks to the always-on Internet connection required for SaaS and cloud applications.

Kevin Lalor, founder and CEO of Business Intelligence 101, agreed and said his company's SaaS model gives his company a clearer picture of customer usage. Bi101 used to sell on-premise software years ago and saw a high rate of piracy among customers. But, it's a different story today, he says, because SaaS offerings like Google Apps or allow solution providers to track logins and account usage.

"Piracy was almost totally eliminated with a subscription service model," Lalor said. "Why? Because we can see what's happening."


NEXT: Architecting Cloud Apps: Limited Access Or Flexibility

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