May Be Extended to All Customers Later : Lotus to Drop Copy Protection for Some
Lotus Development, the No. 1 maker of software for desktop computers, said Wednesday that it would allow its biggest and best customers to remove the copy protection codes from Lotus programs. The company also indicated that if the new plan is successful, it could be extended to all customers.
Lotus, whose 1-2-3 is the largest-selling software program for financial spreadsheets, and Ashton-Tate have been the only major software makers to continue to place copy protection mechanisms on their software.
Such protections are built into software to prevent rampant copying of a single purchased program and presumed lost revenue-- a la the audio tape industry. However, the anti-piracy measures are cumbersome for the computer user and in some cases cause data to be lost and computer systems to malfunction.
Large firms, which may use thousands of copies of a particular program, have been clamoring for elimination of copy protection, often citing such “nuisances.”
Most other software companies have, in varying degrees, eliminated copy protection. Torrance-based Ashton-Tate is scheduled to announce its answer to the nagging copy protection issue next week.
The ultimate effect is that removal of copy protection codes makes copying of the programs easier. But Lotus is not giving its customers free rein to make copies, company spokeswoman Adine Deford said.
About 400 Firms Affected
Under the plan, Lotus will give the participating companies a disk that will wipe out Lotus’ copy protection devices and install the company’s own warning against copies. A company will be eligible only if it has an agreement to upgrade at least 100 of its Lotus programs to the next higher level and only if it has an enforceable anti-piracy policy. Deford said that about 400 companies currently meet such requirements.
Analysts believe that in capitulating to the trend of removing copy protection, Lotus is enhancing its competitiveness without jeopardizing its revenue.
“Before, Lotus could afford to ignore” the trend, said Robert Lefkowits, software analyst with Infocorp, a market research firm in Cupertino, Calif. “It was the recognized leader and had so much to lose. But it’s admitting now that it has to remain competitive like everyone else.”
Although less-expensive spreadsheet programs have challenged Lotus 1-2-3’s dominance of the market, Lefkowits said that so far this year, 1-2-3 has increased its market share to about 70% of all spreadsheet programs for IBM PC and compatible models. In the overall market for spreadsheet programs, 1-2-3 captures about 45% of the sales. However, Lefkowits said Lotus missed out on at least one major government contract because its programs were copy protected.
A complete counter-industry grew up around software protection: firms that designed the increasingly sophisticated codes that deter copying and privateers who specialized in cracking the codes and selling pirated copies on the “gray market.” Industry experts believe that the presence of copy protection codes does very little to deter illegal copying.
Lotus’ action is a sign of changing times. Earlier this year, the industry’s trade group, ADAPSO, dropped a longtime effort to achieve industry standards for copy protection.
“Copy protection has been a sore subject among corporate users,” said Ronald Palenski, deputy general counsel for the trade group. “There was lots of adverse reactions from users” to ADAPSO’s attempts for standards, and the companies then lost interest as well, he said.
Michael E. Kolowich, Lotus vice president for marketing, said in a statement: “As recently as a year ago, the talk was of simple price deals and volume purchase agreements, and of pure site licenses. Our customers demand and deserve something completely different today.”
Lotus also said it would limit participating companies’ liability against unauthorized copying to the retail value of the copies. And it said its software would now be available through electronic distribution--which means that Lotus can send programs directly to customers’ computers.
