IP Piracy – the business model

Nice sophisticated article from the Business section of the LA Times about how it appears that they are very conscious that software piracy is good for Microsoft.

“They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.” — Bill Gates

I’ve written about that before both here to illustrate how exactly the pirate price appears to be set and about how some nations might prefer to enforce IP rights to as a form of classic home industry protectionism.

I particularly like this quote from an IP lawyer.

“Is widespread piracy simply foregone revenue, a business model by accident or a business model by design?” he asked. “Maybe all three.”

I love that because when your firm is executing on a model like that it becomes totally keystone cops inhouse with people running in all directions. The article outlines how the people who are chasing lost revenue managed to encourage adoption of free software in the Islamic world.

The effort even prompted Islamic clerics in Saudi Arabia and Egypt to declare fatwas, or religious edicts, against software piracy.

I have no doubt that if Microsoft could strictly enforce their software licenses that would be great for open source. It would raise barriers to entry high enough that the majority of users on the planet could not get over them. Given the necessity of regular security patches it is also clear to me that Microsoft is intentionally not enforcing their licenses.

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