Steve King talks of software component and piracy (1)

Steve King talks of software component and piracy (1)

By Zatni Arbi

JAKARTA (JP): If you've been regularly following my column,
you must have noticed that I have been raising a number of
questions concerning the future of personal as well as
organizational computing. Last week, I had an invaluable
opportunity to have a short but very enlightening interview with
Steve King, Lotus Development's VP for the Asia Pacific.

I asked Steve several of the questions that have bogged my
mind lately and, revealing his astonishingly vast knowledge, he
responded with a really thorough answer to each of my questions.
The following, along with my next week's article, is an excerpt
of the interview I had with him.

ZA: The Asia Pacific region has been notorious for software
piracy. The Business Software Alliance and Software Publishing
Association have been actively fighting the crime, but they have
only resorted to law enforcement measures. Lotus Development
seems to have chosen a different strategy. As Lotus Country
Manager for Indonesia David Wee once told us, you have lowered
the price of your products to make them more affordable in hope
that more people will buy the original copies and become legal
users. 1-2-3 for Windows Release 5.0, with its US$ 150.00 price
tag, is a case in point. It's very inexpensive and it's
comparable to what you'd have to pay in the U.S. Have you seen a
really significant correlation between lower price and lower
piracy rates?

SK: If you look at BSA data, in the last two or three years a lot
of countries have shown substantially lower piracy rates. Many of
these countries used to have close to 100 percent piracy rates,
but this has changed. The situation in Taiwan, Korea, Japan and
Western Europe has gotten better. We don't know how much of it is
attributable to lower prices as opposed to other actions, such as
enforcement by the government. But we did a test in Korea. We
sold the Korean version of 1-2-3 at a very low price -- much
lower than the U.S. price -- and we did see that the piracy rate
fell a fair amount. Still it's difficult for us to determine
exactly how much the reduction of the prices has an impact on
piracy rates.

Furthermore, if you look at the problem of software piracy,
you cannot look at it as a whole. The piracy rates at the
corporate level and the government level around the world have
gone down very significantly, whereas the rates among small
businesses and homes have stayed very high. This might be caused
by law enforcement done by the government as well as education.
Both of these measures are not as easy to get down to the level
of small business and individuals as it is to big corporations
and government institutions.

I once talked to the people at Intuit, the maker of Quicken,
which is a very popular personal and small business financial
management program. Although the price of this program was only
about US$25.00, they believed that their piracy rates were higher
than ours because their product was used by small businesses and
individuals. On the other hand, although our products have a much
higher price, our market comprises both small businesses and
individuals as well as big corporations and governments.

So, lowering the prices by itself will not end software
piracy, although we believe it helps a lot. I think the decrease
of piracy rates is driven first by market segment, second by
education and third by lower prices, while active enforcement of
the laws is just part of the education.

ZA: At present we have such a wide choice of platforms. We have
the Intel-based machines, we have the PowerPCs, we have other
RISC-based computers, each with its own operating systems. For
the Intel-based machine alone we have DOS, Windows, OS/2 and
more. On the RISC side, we have several different flavors of
UNIX. In light of these facts, what is Lotus' plan for future
software development? Which of the platforms do you think will be
the choice of the future?

SK: It is indeed a very confusing time for everybody, including
us at Lotus Development. There are several views on the platform
issue, and I think it's best to describe them by breaking down
our products into the communications and desktop products.

In our desktop products, which include 1-2-3, Ami Pro,
Freelance Graphics, and so forth, we're now developing versions
for OS/2, Windows and, well, DOS. We're still developing DOS
products, although the market is dwindling very rapidly. We're
not developing any desktop products for the Mac, PowerPC or UNIX
environments, as the markets don't seem very attractive. The Macs
are excellent computers, but their share in the corporate
computing seems to be declining. Therefore the market for
business productivity programs, such as a spreadsheet program,
doesn't seem to be very attractive.

When we talk about communication products, sharing information
is essential. That's why in our communication products, CCMail
and Notes, we're rapidly developing products for everything. Just
for an example, GM has only fifty Macintoshes worldwide, although
they have over one million computers all over the world. Yet,
since these fifty Macs sit on the desks of the CEO and 49 of his
top people, we have to develop software that connects their
machines to everybody else's in the organization. That's the
reason we have to develop communication products for all
platforms.

Going back to the original question, we see the world con
tinuing in the state of flux around operating systems and we
think there will be many operating systems both on the desktop
side and the server side for the foreseeable future.

On the desktops, we see that Windows will continue to be the
strongest in the future, particularly with the release of Chica
go. The Mac will do well, and OS/2 will do well. In fact, in the
banking industry, OS/2 is getting stronger; a lot of banks have
standardized on OS/2, and it's been successful in the vertical
market as well. Overall, however, Windows is still the market
leader.

On the server side, UNIX as a server is very strong. OS/2 is
the strongest among the Intel architecture's operating system.
Windows NT is gaining share, though, and it's a very good system.

The big question mark is when the next level arrives in the
next three to four years, the Object Oriented level. It will get
even more confusing. We have the Sun with a technical lead but
are way behind in marketing; Microsoft with a marketing lead but
way behind in technical capability; and Talligent, which is
behind in everything. Therefore, regarding the platform of choice
for the distant future: it's too early to tell.