How a Top PLM Provider Built a $24 Million Compliance Program

Leading global provider of Product Lifecycle Management (PLM) software generates and converts actionable piracy leads at both current customers and new prospects.

NO RELIABLE DATA TO QUANTIFY LOSSES TO PIRACY OR INFORM COMPLIANCE STRATEGY

Our customer offers a comprehensive suite of mid-range and high-end PLM products for efficiently designing, analyzing, and manufacturing products, and managing enormous amounts of design-related data.

Serving more than 70,000 customers, the company sells its high-end products directly in most regions, including EMEA, the Americas, and the Asia-Pacific region. For some mid-range products and some geographies, it leverages indirect channels.

Like many software developers in its space, it manages licensing certificates through Revenera’s FlexNet Publisher. Its specific licensing arrangements vary by product: for technical desktop applications, it uses floating and/or node-locked licenses; for highperformance computing products, it licenses based on server or CPU; and for client-server applications, it licenses by named user, offering floating licenses in certain cases.

While our customer already had a sizable compliance organization, it still faced large and growing piracy-related revenue losses.

Like many developers, it began by largely ignoring piracy, because it couldn’t find reliable data to quantify losses or inform strategy. Increasingly, it was receiving support calls from non-customers; and receiving complaints from account teams, third-party distributors, and whistleblowers. Ignoring the problem became untenable.

Simple web searches quickly found illegal download sites, demonstrating that the company’s products had been targeted by organized piracy groups. Cracked products were routinely available within 30 days of release. Thousands of downloads were being reported on Cyberlocker sites, and on portals such as Rutracker, Lavteam, and Hao007.

The company considered several strategies for addressing the issue:

• It considered auditing, but rarely had rock-solid proof of piracy, didn’t have the internal skill sets to run audits, and realized that its targets were often strategic customers. Maintaining strong relationships with these customers was critical, and audits were often viewed as hostile. Software contracts were often complex, making full compliance difficult or debatable. Auditing would inconvenience customers, and audit requests gave intentional pirates time to cover their tracks. 
• The development team’s first instincts were to further harden their software. But this presented technical challenges, and might impact properly licensed customers. Moreover, crackers were exceptionally sophisticated, and knew licensing management systems inside and out. Certain best practices might help a bit, but cracks were now appearing in days, not months. Prevention was a losing strategy. 
• Could the company sue pirate sites? Perhaps, but most were run from locations where enforcement was difficult—and pirates could easily move elsewhere.