A few years back, when the Open Source movement was starting to gain momentum, I remember thinking that would be the death of commercial software. That hasn't happened... it's certainly had an impact though, in some respects it's made commercial software vendors improve their products.
Sadly, the same can't be said about piracy. I've heard all sorts of views on piracy over the years, some even going as far as to say it's good for the vendor. I guess if you are a redmond based monopoly that could be said, but for small ISV's like us it does have a negative impact.
The conventional wisdom is that people who pirate your software wouldn't have bought it anyway, but I don't subscribe to that point of view. Sure, most probably wouldn't have bought it, but there are many people who are opportunistic pirates, ie “I'll buy it if I can't find a cracked/warez copy/keygen etc“. You would be supprised how many people fall into this category. If most people where honest enough, they would admit to having used pirated software at some stage in their lives, and many people don't believe they are doing anything wrong, in fact they have the same attitude to piracy of music/dvd's etc.
What does piracy really cost us, and how can we calculate it? I have no idea.. I suspect most people who quote the cost of piracy are plucking their figures from thin air, it's like answering the question “how long is a piece of string”.
What I do know is it costs us when it comes to dealing with support, as it's impossible to distinguish between a potential customer requiring pre-sales support and a person using a pirated copy. Large companies get around this but not offering any unpaid support, unfortunately thats not something small ISV's can get away with. And there's the increased bandwith usage on our server (this I can quantify), we pay to colocate our server, so increased downloads can cost. Ordinarily this wouldn't be a problem, since we'd expect that with increased downloads of the eval versions of our products we'd be seeing increased sales.
Why the sudden urge to blog about piracy you might ask? Well downloads of one of our products went through the roof last week, increasing by 1000% (no, that's not a typo, that's one thousand percent). When I matched that against referals it didn't take long to find the site that had a new crack for our product. Not the sort of thing I want to see when I'm working 12-18hr days & haven't had a real holiday in last 10 years. Kinda makes me want to find a new career sometimes.. developing & selling software doesn't seem quite so attractive these days.
Sigh..