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.