10/20/2012 Meeting - Corporate Worldwide Anti-Piracy
- 1. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Richard Atkinson | Director, Worldwide Anti‐Piracy Corporate Worldwide Anti‐Piracy: Introduction Driving Adobe’s Comprehensive Approach to Grow Revenue & CCM through Conversion From Piracy
- 2. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Pure Pirates 13% Tend Pirates 34% Tend Legitimate 40% Pure Legitimate 13% Only 13% of Software Users are “Pure Legit” 74% of Software Users are “Dual-Users” (Purchase AND Pirate) * Source MPA 2007 and 2009 studies focused on Dual-Consumers All other: 2011 BSA/IDC global study of software consumption and piracy. Debunking Misconceptions about our Software Pirate User Base Non-Monetized (piracy market share) Consumers of Adobe Products Monetized (sales market share) Perception Reality 2
- 3. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. * Source 2011 BSA/IDC global study of software consumption and piracy. Contrary to Common Belief: ¾ of Software Users are Dual Users ~50% of IT Professions believe “over-deployment” is LEGAL ~50% of Users believe Peer-2-Peer Downloading is LEGAL Individual Users (Mature / Emerging) Business IT Leaders (</>500 employees) NotConsideredPiracy Considered Piracy Debunking Misconceptions about our Software Pirate User Base 3
- 4. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 4 Software: 1x/year PC Games: 1x/quarter eBooks: 1x/month Movies: 1x/2 weeks TV: 1x/week Music: 1x/day “Apps”: 1x/week Are our consumers that different?
- 5. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Deter End User Consumption through audits, legalization, enforcement, and campaigns Disrupt Distribution through internet takedowns and enforcement Disrupt Supply through investigations, intelligence collection, and supply chain security Integrated Strategies and Actions across stakeholders, focused on Pirate-Conversion Improve Understanding of Pirate-User Segments and Motivations Enhance Differentiation between pirate and legitimate product, experience, and value Compete Better with Piracy through Increased Value Proposition Suppress Piracy through Corrective Action Mission: Drive Incremental Revenue and Adoption of CCM through Conversion From Piracy $ 5
- 6. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Alignment is Key to Achieving Our Goal 6 EXTERNAL PARTNERS Leverage partners to curb piracy beyond Adobe’s reach: • Industry Organizations (BSA, etc) • Supply Chain & Ecosystem • Law Enforcement • Resellers/Distributors/Channel PRODUCT Reinforce piracy deterrents as well as add non pirate‐able product benefits: • Engineering/Architecture • Product Mgt/Features • Customer Experience/UI CUSTOMER‐FACING Work with internal teams to maximize customer satisfaction and conversion from pirate to legit: • License & Compliance • Field Sales • Channel • Customer Service MARKETING Market benefits of legitimate software to drive conversion: • Pricing / Positioning • Research & Understanding • PR / Communications ANTI‐PIRACY Provide overall Strategy, Central Services, and data‐based insights and guidance: • Pirate‐Conversion Strategy • Business Intelligence • Global Investigations • Online Enforcement • Legal Coordination • Communications • BSA /Industry Assoc. Global /Regional LEGAL AND SECURITY Define processes and influence legislation: • Litigation/Enforcement • Contracts/EULA’s • Government Affairs & Legislation • Action & Risk Management • Joint Investigations
- 7. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Guiding Principles ALIGNMENT FOCUS RESPONSIVE LEVERAGE • Focus limited resources to maximize impact • Prioritize efforts within geographies and segments of highest impact/opportunity • Progressively sequence actions to optimize the cumulative effect • Internal investments, activities & resources are complementary, not silo‐ed • Internal stakeholders aligned to Goals, Objectives, Priorities • Internal efforts aligned with industry & associations efforts • Adapt to new business models and associated piracy patterns • Respond to measured effectiveness, trends, insights • Adapt tactics to local market conditions • Extend impact by coordinating business partners • Spread cost and burden across industry • Maximize law enforcement, govm’t relationships, legislation Execute Learn Adapt
- 8. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Corporate WW Anti-Piracy Team Strategy & Leadership Richard Atkinson Global Program Manager Mason Bacon Business Intelligence Pingping Medley Legal Coordination Diana Olin Investigations Michael Draper Business Analysis Jonas Brueggemann Communications Annick Mohageg-Baudot EMEA Regional Manager Philippe Briere J/APAC Regional Manager Rachel Fung LTAM Regional Manager TBD – final stage of interviews 8
- 9. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Fill key gaps in consumer understanding, enabling enhanced targeting, engagements, and opportunity for conversion: Understand consumer piracy behavior, attitudes, motivations (doing & thinking) Determine best opportunities for conversion (triggers & elasticity) Estimate piracy impacts & opportunities to business Provide strategic insights on where piracy is headed Business Intelligence General Profile Existing Sales Pipeline Pirate Downloading Product Activation Customer Research Business Intelligence
- 10. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Using Data to Understand Consumers and their Behavior 10 P2P pirate download tracking Product activation tracking Piracy activity is monitored by IP address Tracking data is then used to profile and target pirates Home Users (trace to their ISP and to their near-location/zip-code) Employees at Businesses (trace to Company Name) Students & Faculty at Schools and Universities (trace to School Name) All Internet- enabled devices have a unique, traceable IP address Business Intelligence
- 11. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 11 Dramatically decrease the availability of pirated product online, which is the primary distribution method in most markets for counterfeit and regular piracy: Increase frustration of pirate-consumers Maximized leverage of tools and approaches Global Online Enforcement P2P Locker & Link Auction B2C/B2B Web HTTP (websites) Search Engine Results UseNet iRC High High Very High Very High Very High Moderate Low Low Moderate Moderate High High Moderate Low Short-Term Trial Short-Term Trial BSA (WW) SIIA (N/A) IACC Short-Term Trial None None Appears Low Appears High Low to Moderate Too Early Too Early n/a n/a Responses Scale/Impact Ability to significantly disrupt? Current Approach Effectiveness Online Enforcement
- 12. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Online Enforcement Effectiveness: How Long Does It Take to Find “Pirate” Copies of Our Software? (13 seconds) 12 • This approach will be used to measure our Online Enforcement efforts (NOTE: STILL ESTABLISHING BASELINE, ENFORCEMENT PILOTS IN THIS AREA HAD NOT YET STARTED) • Currently, It only takes a consumer an average of 13 sec. to find a live download link ----- Our Target is 360 sec. Online Enforcement
- 13. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 13 Combat large piracy operations via the results of key global investigations: Provide insights to Adobe processes being wrongfully leveraged Create strategic disruptions to the Piracy Supply Chain / Ecosystem Stop pirate-discount products from displacing legitimate sales Global Anti Piracy Investigations Intelligence Gathering piracy@ adobe Internal Reporting Piracy Hotline Industry Partners Internal Tips Law Enforce ment Customer Impact Global Impact Pirates’ level of sophistication Revenue Potential Business Impact Investigation Decision Factors Global Investigations
- 14. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Linking 3 Teams/Experience for Investigations & Resolution 14 Worldwide Anti-Piracy (abuse by our consumers) Corporate Legal Fraud Investigations (abuse by our employees) Customer Service Fraud Investigations (abuse of Customer Service)
- 15. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Example: current OEM Investigation 15 Futuresoft.com Business and Individual Customers Government Customers Replicator Replicator OEM GL Partners Grey Market Education Distributer Counterfeit OEM Distributor Channel Partner Upgrades Only Potential source of leaked serial numbers Customers receive Counterfeit Software of Older Version + Legitimate Upgrade to Current Version OEM Serial #s OEM Partner OEM China Replication Supply Chain Pirate Counterfeit Ecosystem (wholesale) Retail Ecosystem (some are Adobe APC Partners) Being sold ~50% Off To Customers believing they are getting Legitimate Product at a discount Current-Product Model (single element) Older-Product + Upgrade Model (2 elements) Primarily Impacting Key Mature Markets: USA, UK, Germany, Japan, Australia Global Investigations Redacted Redacted
- 16. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Intelligence Gathering Limited Intel Internal Test Purchases Internal Reporting Industry partners Industry Associations Strategic test purchases 16 Serial Number Analysis Industry Associations Internal Reporting Test Purchases Industry Partners German Investigation Law Enforcement Cases
- 17. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Investigative Priorities Focus on point of compromise Eliminate internal source Establish scope How big is the problem Establish testing protocol How to identify compromised serial numbers Discover additional victims Combine investigative efforts 17
- 18. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Data Analysis 18 Gather subset of serial numbers Identify single point of relation All numbers relate to one OEM partner All numbers sent to same country Replicators in China identified
- 19. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Current and Next Steps 19 Identified Main Distribution Channel Identified Primary Suspects Identified loopholes that allow numbers to be compromised Solidified partnership with other victims Prepare Civil and Criminal actions Last Step
- 20. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 20 Questions?
- 21. © 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.