Autodesk Today

Piracy on the PCsRemarks by Carol Bartz, Chairman and CEO,

Autodesk, Inc.
To:
The Commonwealth Club of California
November 18, 1996
Palo Alto, California
Good evening.
Id like to begin tonight by asking you to imagine a situation. Let's say that
you work for a company that manufactures personal computers. You decide
to go into work on Saturday to clean up a few projects.
While you're working in your office, you see a truck enter the parking lot
and go to the back of the building. That seems odd, you think. You
investigate and see men loading boxes from the warehouse into the truck.
You call the police and when they arrive, they arrest thieves who are
stealing newly-manufactured PCs from your warehouse. Later, you find out
its been going on for weeks.
How do you feel? Well, youre upset and youre mad. You say, The people
here have worked a lot of hours to fill that warehouse. And the sales of
those products are my paycheck.
Now you know what it's like be in the software industry.
Thieves steal billions from us every year. And they get away with it year in
and year out. Software theft runs the gamut from full-fledged counterfeiters
to people who copy a few floppy disks.
The software industry is one of the crown jewels in the U.S. economy. Its a
real American success story.
We're good at software. Our innovative, just-do-it culture seems to grow
new programs and new companies. In the process, we've creatednot just
hundreds of thousands of new jobsbut whole new industries.
Annual sales of software are close to $75 billion a year. That's three times
bigger than the movie industry.
Software touches all of us every dayeven if you never use a computer.
Software is at the heart of everything from the traffic lights in your home
townto the MRI machine in your community hospital.
It runs the pumps at the gas station and the cash registers at the supermarket.
Its used to design the cars we drive and the buildings we work in. It even
calculates and prints your paycheck.
AndI dont want to be presumptuousbut without software, our nations
investment in computer hardware is worthless.
There's no question that the U.S. software industry has a bright future. The
explosive growth of computer processing power will create software
opportunities in the next decade that we can barely comprehend. And the
growth of the Internet will create even more opportunities.
But the software industry in the United States has a major problem. It's
called software theft. Theft accounts for $15 billion in lost revenue each
year. That's 20% of total sales.
Because Autodesk makes complex, expensive software, our theft rate is
much higher. We estimate that there are eight illegal copies of AutoCAD for
every legal one. The media often calls software theft by the wrong name.
They call it piracy. I don't much care for the name piracy. It conjures up
images of Errol Flynn and swashbuckling adventure movies.
What were talking about isnt romantic. Stealing software is no different

from using a crowbar on the back door of the local appliance store and
taking a couple of television sets.
Software theft is not a victimless crime. It slows down an important U.S.
industry. It short cuts jobs and taxes. If you have a retirement plan or 401k
that invests in high tech stocks, you're also a victim.
Some people justify software theft by saying that these companies make too
much money. Well, not everyone is Bill Gates. Many software companies
are small, struggling groups that depend on the revenue stream to stay alive.
Often, developers have used all their savings and maxed out their credit
cards to create a program. For larger companiessuch as Autodesk
developing a new program means a very big investment. And weve got to
make the total investment before the first dollar of sales comes in.
Software thieves say, Its a small thing. Look how easy and inexpensive it
is to make a few disks.
But making software really isnt about disks. Making software is about
people. A new program can take hundreds of people each working
thousands of hours to create the content on those disks.
One of the biggest problems we have in fighting software theft is this
perception that its not really stealing. Heres an example.
Theres a small software company in California called Abacus Concepts.
Theyve developed an award-winning program called StatView. Its used to
analyze statistical data. A lot of people save time using StatViewand sales
are very good.
What a great American success story. This group of 25 people develops a
great programand they reap the rewards. Well, not quite.
Abacus Concepts has sold 75,000 copiesbut they estimate that there are
more than half-a-million illegal copies in use worldwide.
Recently, they discovered a customer in Sweden who was using hundreds of
illegal copies. Heres the kickerand it shows why software theft is a
perception problem. The customer is the Karolinska Institute in Stockholm.
Its a prestigious medical research organization. And they happen to be the
people who give the Nobel Prize for Medicine.
When these scientists describe themselves, is felon the first word that
comes to their minds? Probably not. And thats our perception problem in a
nutshell.
Let's look at who steals software. First, there are a small number of
professional counterfeiters. These guys are crooks and they know it. They
run assembly-line operationscopying and selling bogus software
complete with authentic-looking packaging. This is a worldwide
phenomenon. It stretches from illegal CD-ROM factories in China to the
streets of Los Angeles.
The volume counterfeiters get a lot of headlinesand they are a problem.
But theyre not the big problem. The big problem is what we call soft
lifters. Theyre often business people who make illegal copies of software
for their own use. They may have one of two legal copies of a desktop
publishing or word processing program. When its time to add more
computers, they just copy the software.
They say to themselves, Hey, I already bought the program. Whats the
harm?
The harm is thattaken togethertheyre responsible for 80% of all
software thefts. Thats about $12 billion dollars a year.
A third group of software thieves I callsadlythe grandmothers.
Grandmothers represent the casual thieves who copy a few disks. I know
that Im taking a hard stand on grandmothers. But Im doing it to make a
point. Casual thieves often dont even realize that theyre stealing.
It happens like this. Its Christmas timeand a grandmother is shopping for

presents for her grandchildren. She buys one copy of each computer game.
Then grandpa sits down at his computer for an hour with a box of blank
floppiesmaking copies for each of the grandchildren. Then grandma
wraps each gift in fancy paper with a nice bow. Its not likely that the tag
will say, I hope you enjoy this stolen gift. Love, Grandma.
Software companies like Autodesk work hard to prevent theftbut it's an
uphill fight. In the 1980's, the industry tried putting software locks on
floppy disks. But this was an impractical, unworkable solutionand it was
abandoned. There are a lot of ideas floating around for preventing software
theftbut theyre still complex and cumbersome.
And the software industry faces new threats from new technologies. New
storage devicessuch as digital video discs and user-made CD-ROMs
will give thieves an even bigger edge.
The growth of the Internet provides another way to steal. We call it the The
Home Shoplifting Network. The Business Software Alliance is an industry
group made up of companies like Autodesk, Microsoft and Novell. It works
to control software theft by focusing on enforcement and public policy.
Through the Alliance, the software industry works to influence legislation.
This is sometimes a tough sell. The technology is complex. It changes
quickly. And often, legislators arent experienced computer users.
A third focus of the Business Software Alliance is educationteaching
people what constitutes software theft. And as the Nobel Prize folks in
Sweden show us, we have a long way to go.
Tonight, my goal is to educate. I've got a bully pulpit with a million radio
listenersand I'm going to use it. I want to change the perception of
software thievery. To start, I want to take you to the scene of the crime.
Software theft takes place in cyberspace. Someone called it, Everywhere at
once and no particular place at all. We can think of cyberspace as starting
at your personal computer and extending outward from there. Its a
collection of hardware and software technologies and communications
channels.
But it's also a new social spacewhere people interact.
When you enter this new social space, you notice that the rules arewell, a
little different. A lot has been written about the emerging cyberculture.
Some call it the online world or the wired world.
If you read Wired Magazine you know what I mean. Cyberculture is hip,
irreverent and edgy. Its eager to shockwith both words and images.
You could say that the online world is now in its unruly, adolescent stage.
In some ways, it's like the Wild West all over again. Think about frontier
towns in the West of 150 years ago. These towns were new social spaces
where a lot of the old rules didn't apply.
People wore guns for good reason. Cattle and horses were stolenand
claims were jumped. Shootings were common.
Of course, not everyone was a lawbreaker. But the culture was defined by
what a few people got away withwithout being punished.
Cyberspace is our new frontierand cyberculture is our new Wild West.
We've even invented new words to describe new kinds of uncivilized
behavior. Like flamingwhich is launching an all-out personal attack,
often anonymously. And spammingwhich is sending unsolicited
messages to thousands, or even millions of email addresses.
In the online world, sometimes we hear the rhetoric of anarchy. We hear
that this anarchy is a key element of the new culture.
I dont buy that.
Lets face itthere are people who like anarchy. Theyre like the ones who
moved to the Wild Westfor all the wrong reasons.
The online world is now going through a process of socialization.

Eventually it will settle down.

Our goal should be to hold onto its freshness, energy and innovation. And
lose the amoral, antisocial and illegal parts.
As this new culture becomes more mainstream, it will reflect accepted rules
of law and civilized behavior. A hundred and fifty years ago, you could
wear a six-shooter right here on the streets of Palo Alto. I wouldn't
recommend it today. This town has changed from the Wild West to the Mild
West. Or maybe we should we call it the Mellow West.
To bring the online world into the fold, this new social space needs to be
civilized. This is important because it's getting bigger at warp speed. And
it's a place that were going to leave to our children. Its one of the places
theyll live and work.
To every generation falls duties and obligations. Our grandparents and
parents had to deal with the Great Depression and World War Two.
Our generation will be the ones to civilize cyberspace. One of the first steps
is to make it honest. And a great place to begin is to stop stealing software.
The Wild West started to become livable when people stopped stealing
horses regularly.
There are good, practical reasons to reduce software theft. It holds back jobs
and growth in one of the most successful and promising U.S. industries.
In the next century, nations will compete more on the economic playing
fieldand less on the battlefield. Software gives U.S. industries powerful
competitive advantages.
We design cars and airplanes faster and better because of software. We
spend less on things like inventory and distribution because of software. We
can communicate words and pictures around the world in an instant because
of software.
As a country, were going to need every competitive advantage we can get
in the global arena. A strong and vibrant software industry will be a big
plus. Software thieves are not only stealing todays software.
Theyre stealing the future.
Theyre stealing the next generation of more powerful, easier-to-use
software.
One of our big challenges in the industry is to make software more
enjoyable and more intuitive. That takes a lot of R&D investment and some
pretty advanced thinking.
But R&D budgets can only come from one placeproduct sales.
Software thieves are also stealing tomorrows opportunities. There are
people who would love to develop programs for the classroomfor
instance, one to teach geography to fifth graders.
These clever designers would combine multimedia technology with proven
educational concepts. Their goal would be to entertain while they educate.
But the truth is that programs like this just dont get developed. Venture
capitalists readily admit that theyre reluctant to put money into software
development for the school market.
The problem is that teachers buy one or two legal versionsand then copy
disks like mad. And they say, It's for the kids."
Please dont misunderstand. Im all for use of software in the classroom.
Many software makersAutodesk includedhave special educational
pricing. And we donate software to schools.
The real tragedy here is the worthwhile software that never gets developed.
Nobodys going to put a million dollars into a product for a market where
theft is commonplace.
Heres another reason to be on the right side of the software theft issue.
It has to do with instilling sound values in our children. If youre a parent of
growing children, youre very conscious of being a role model. Our kids

watch us like hawksand they dont miss much. As a parent, when you
have a chance to impart a life lesson, you take it.
Lets say you take your 10-year old to the mall. As you walk out of a store,
you notice that your youngster has a new toywhich is a little suspicious.
No store bag and no receipt.
You ask a few questions and the distraught look on the childs face tells the
whole story.
So you march your kid back to the store and make him face the music. You
both find the manager. With tears in his eyes, your child explains that he
took the toy without paying for it. And that it was a mistake. And it will
never, ever happen again.
You and the store manager nod with approvaland the incident is closed.
But not without an important lesson being learned.
OK, lets flash forward two days.
Your child sees you sitting at your PC. Youve got a new software program
and its already-opened box.
Your child says, New software, dad?
Yes, you mumble.
Isnt that the one that Jeremys dad got last weekend? he asks.
The look on your face tells the whole story.
Why are you copying that? he asks.
Your mind races through the available rationales. Its not really stealing if
you dont get caught. The company makes lots of money anyway. I
really need this.
All of them sound terrible. You know why you dont have a good answer.
Their isnt one. You know that theres no difference between stealing the
toy and stealing the software.
Aside from pragmatic considerations, there other reasons to stop stealing
software.
I'm going to do something old fashioned.
I'm going to appeal to your sense of honesty and decencywith a moral call
to action.
Don't steal software. And dont condone it.
If youre the owner of a businessbig or smallyou need to have a written
policy on illegal software. And you need to enforce it.
To the casual thievesthe grandmothersI say this. When a person copies
software, it make them a thief. If knowing youre a thief bothers you, the
remedy is simple. Dont do it.
I know that not stealing software is hard to do. It's so easy. And whos to
know? Its an invisible crime. Electrons moving from one place to another.
But a single theft multiplied millions of times has an enormous impact on
the software industry.
Software theft is not a victimless crime. When you steal software, youre
stealing from me.
More importantly, youre stealing from people who work for software
companies. And youre stealing from their families.
Yes, stealing software is common in today's cyberculture. Its as common as
stealing horses was in the Wild West.
But the situation has to change. When the bad guys winand hard working,
honest people losethere's something wrong. Its the wrong value system.
And wrong value systems on a massive scale are dangerous. They send the
wrong messages. And they encourage the wrong behaviors.
Cyberculture is going through its growing pains now. Its our job to make it
a place where we want to livea place that reflects our values.
Ive got big goals for what software can do for us in the future. I want it to
change our lives.

Its already saving time and work.

But theres a lot more that software can do.
Today, many jobs involve using information. And this is one of the fastest
growing job categories. But the problem is that information workers spend
far too much energy doing dog work. They copy from one page to another.
They translate information from one system to another.
Too often, theyre doing the equivalent of moving hillsides with shovels and
wheelbarrows.
Well, software can be our bulldozer.
In the industrial revolution, steam power and electricity freed millions of
people from mindless physical labor. Now, better, more powerful software
is going to free us from repetitive, unrewarding mental work.
Heres the good part.
Reducing drudgery creates opportunities.
Opportunities for people to be more creative in their work lives. To look for
the next answer. To be more connected to others. And to realize their own
hopes and ambitions through their work.
Not a bad goal for a few floppy disks.
Cyberspace is a new and sometimes puzzling place. Its a new social
spacewith new kinds of behavior. Some of it is straight out of the Wild
West.
Computer technology has enormous power to make our work easier, our
leisure more interesting and our lives richer. And the innovation and vitality
of cyberculture will puts its own stamp on our larger culture.
But its not immune to the rules of the road. It will prosper as it matures
and takes on responsibilities. In the process, the online world will take on
the enduring values of our society.
We all have our part to do in taming this new land. Lets start by not
stealing software.
Thank you.

Investor Exchange | Autodesk Careers | Press Room | Contact/Offices | Events | More Info
Home | Products | Tech. Asst. | Company | Search | Sitemap | Purchase
Copyright 1998 Autodesk, Inc. All rights reserved.
Reproduction or copying of images is prohibited..