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The Almighty Buck

What Will Happen to Rented Software When Its Publisher Sinks? 272

Posted by Cliff
from the stuff-to-think-about dept.
MightyE asks: "With the advent of subscription software with renew-required keys, I have a question. What happens when a software company from which you lease goes under? Who will provide you your software keys in the future? Should a law be required that if such a company goes under, they must either sell the rights to rent keys to another company, or provide non-terminating keys to the current subscribers?" With many large software corporations looking to put these systems into effect, I think it's better to discuss this question now, rather than later.

"Currently if you purchase software, and the software company goes under, all you lose is support, you still have a working product. Consider a large corporation making a major rollout of "rented" (rented meaning any software with a time-limited key) software. If the software company closes its doors, the corporation has now invested thousands, hundreds of thousands, or even millions of dollars into rolling something out that may only work for the rest of the quarter.

On the other hand, consider that you are a company that rents software. If you are required to enable non-terminating keys for the event of corporate liquidation, this would only have to be broken once and one single non-terminating key could get out on the net, thus defeating one of the largest concepts behind "rented" software, anti-piracy (not that I don't whole-heartedly believe that any good software with a rented key won't be cracked with a key patch or something).

Certainly it seems a viable solution to require such companies to give or sell their key distribution duties to another company."

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What Will Happen to Rented Software When the Company Goes Under?

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  • by tang (179356)
    So lets say a company that rents software goes under...And they are required to give the keys to another company so you can keep running your software. What if no company will take the offer? If the business failed in the first place, it may just be that there is no money in the software...So whos gonna want to take on a losing product?
    If no other company will touch the software, are you then just S.O.L?
  • That's a very good point. But the only problem with using non-terminating keys is that someone eventually finds them, publishes them on the Internet and the whole pirating software thing continues (with nullifies the reason for using the renting system).
  • by gunner800 (142959) on Wednesday April 11, 2001 @09:33AM (#298196) Homepage
    How about this for a solution...

    If you (or your company) are comfortable with the risks of renting software, then rent software. If you're not, don't.

    Nobody is going to force you to rent software. If you want to pay the (arguably) extra money, then go buy some non-terminating software. Even if every piece of software in existence is rental-based, nobody will force you to use it.

    Just don't accept a license you don't want to agree to.


    My mom is not a Karma whore!

  • If that company goes out of business and your contract is renewable, you cannot renegotiate with an entity that does not exist, therefore you cannot renegotiate. Your contract does NOT state that both parties will be there at the end of the term, I'd bet.

    DanH
    Cav Pilot's Reference Page [cavalrypilot.com]
  • As bad as this sounds, if you're renting something you don't own it. If the company from whom you're renting goes under, you are no longer renting from them and don't get to use whatever you were renting.

    Your best bet is to buy, not rent. And if a company will only rent to you, start one that sells what they're renting. You'll have a market. (On /. at least.)

  • by popular (301484) on Wednesday April 11, 2001 @09:34AM (#298201) Homepage
    Can those PPV Divx movies be used anymore, or are people stuck with stacks of useless DVD's after that company shut down?

    --

  • by michaelb (10890) on Wednesday April 11, 2001 @09:36AM (#298202)
    if the company from which you are renting your software goes under, you would become the owner of the software. Obviously, this would have to be covered in the lease agreement, but any good legal team should be demanding such clauses. In my company, for example, we have a clause in all contracts with various vendors that if they fail to meet their contractual obligations we obtain full rights to the source code. Which it then becomes my job to support and implement upgrades to. ;-)
  • by caffeineboy (44704) <.skidmore.22. .at. .osu.edu.> on Wednesday April 11, 2001 @09:59AM (#298203)
    Presumably the subscription will continue to be source of assets that somone will be interested in. As long as support costs a company less than they make in renewal fees somone will have an interest in collecting money... After there are too few people renewing to justify the cost of customer service, I would think that benevolent companies would make a "eternal key" public domain, but that's not to say that they would.

    This reminds me of the drivers for my hayes modem. They disappeared for a while and now have come back since the rights were finally purchased by a company that cares... Of course, there is no advantage to the company offering the drivers now. It's kind of like legacy hardware support except that the money will keep coming in. It wouldn't surprise me if companies could be started merely to sell renewals for extinct companies.
  • ...you'll have to swith back to MS.

    Unless THEY are the ones to go under.... While it is unlikely, it would be an interesting happenstance...

    Boss: Install Windows on those 20 new Laptops for the boys in sales.
    IT Dept: Uh, boss? The authentication server at Microsoft is not responding...

  • Of course, if it was so lucrative, you'd have to wonder why the company went out of business. Why not just fire all your staff and sit back and collect the subscription fees?

    Some more likely scenarios:

    1. You're using old software that you think is great, but nobody else is using it anymore. It's not lucrative for the publisher. The go out of business, and you're out of luck.
    2. In preparation for going out of business, the publisher offers to sell you a new version of the software that doesn't have subscription enforcement. In other words, they offer to convert you from rental to ownership, and if you don't like the price they offer for ownership, you're screwed (or you can pirate it). Note that this gets rid of the problem of designing nonterminating keys into the software.

    The Assayer [theassayer.org] - free-information book reviews
  • Having a key posted to the net is only a problem is the key is general and not location specific. How hard would it be for a company to sell a key to a corporation that only works on a given TCP/IP range or domain name? For the single user it could be bound to one of a number of hardware specific identifiers. This is the only way the Anti-piracy system would work. However even that is flawed. There are a lot of shareware registration systems that work in a similar way. However most of them have been circumvented by someone reveres engineering the key generator. This is frequently no small feet but once done is a source of unlimited keys. Bottom line is that there is no way to stop piracy, you can only make it harder. This in turn makes the lives of honest users more difficult as we too have to deal with the effects of anti-piracy features. A good example of this is products such as 3D-Studio. I own a legit copy but use a crack so I don't have to mess around with the hardware lock (it uses a parallel port dongel). In my own shareware (shameless plug) Net Weasel (Search on cnet or zdnet. Download it, I need the hits) I use a non-hardware specific encryption system that could be easy negated if someone where to build a key generator.
  • Insightful article, and a great discussion piece. Sadly, as human nature will have it, we will probably do nothing until it actually happens, and we get bit HARD by it. California energy crisis, gasoline shortage panic, ozone depletion, rainforest depletion, shortage of fossil fuel, Y2k panic in 1999, etc... I'm no environmental freak -- just saying that like those issues, folks are not likely to try to fix the problem until it actually happens.

  • Either like games which the publisher stops requiring CDs/CD Keys/Internet authentication and releases a patch to disable it or it will stop working since all you did is buy a time-limited license and you can't buy that license anymore.
  • Not to sound like a fanatic, I think the very idea of renting software will go down in flames. First, it will provide the final proof of monolopy pricing by Microsoft (anyone here old enough to remember that Ma Bell used to make you rent phones, and this was protected by law) and second, when .NET is released in the wild, are people really gonna care when their current hardware/software doesn't force them to keep paying over and over and over? I don't think they will.

    Which, btw reminds me. If you want to combat .NET, there needs to be a OSS initive at starts using Mozilla services to write applications, all GPLed, which finally would let Linux companies make a profit by selling diskspace in a program similiar to Apples iDisk.

  • "What Will Happen to Rented Software When Its Publisher Sinks?" Dunno. And who cares? If people and companies are dumb enough to pay to be screwed like this, why should it be an issue when the inevitable happens? OK, with today's commercial software, when a software house sinks, the license to the software is usually snapped up by another company. A captive user market can be quite an asset. I presume this will continue to be the case. But smart people should be using free software anyway, so it's a moot point.
  • by Masem (1171) on Wednesday April 11, 2001 @10:10AM (#298217)
    "Hi, we're Microsoft. Office 2005 will be sold only as rentable software. Since it has feature X which every one of your competitors is using, you'll have to use it too."

    Software renting puts too much power in the hands of a monopoly (which aren't illegal in and of themselves!), and as proven by the MS trial, if such a company did do this, say in 2004, and were charged under anti-trust act, they could continue to do that deed for several more years, up to at least 2009, collecting rent from their customers.

    I believe that if renting software comes to pass, there must be a law to allow rent-to-own or outright purchasing provisions to prevent a monopoly from maintain their position.

  • How many of us already support outdated software(in binary form, mind you) that has long outlived the vendor support?

    I've got Word Perfect 5.1 for Unix and VSIFax 2.0, both multiuser, text-based, binary software running on AIX. I was amazed when they lived past the year 2000. As far as I'm concerned, they can stay as long as people still use them or they die.

    What will really suck is if your ASP that hosts your apps on their server dies. Then you're kinda screwed.

  • So who do we propose should regulate this? Who is going to escrow the perpetual keys or pass judgment on the terms of a license transfer in case of bankruptcy? The government? Verisign? Please.

    Moreover, do you as an end user want to be subject to the shenanigans that will inevitably take place when a company goes under? Keep in mind that Software Rental 'R Us has your address, email, name, etc. etc. If Software Rental 'R Us goes out of business and they have a database of, oh, a million active emails, Direct Marketers 'R Us might just want to take a look at purchasing the keys.

    There's a better solution: don't do it. If Microsoft comes along with Office 2005 (now with polka-dot highlighting!) with a rental license and 2 Fortune 500 companies purchase it (everyone else stays with Office 2004), how long do you think rental software licenses will last at MS? If people make informed decisions as end users (or, more saliently, IT Directors), this problem may still be avoidable.

    Let's hope so.

    -db

  • by fmaxwell (249001) on Wednesday April 11, 2001 @10:13AM (#298220) Homepage Journal
    The software "licensing" system is broken. Companies sell licenses and rent software because they are desparately trying to keep software from being considered a "product" that has been purchased. If it was a product (in the eyes of the law), then they could not get away with providing buggy crap that fails to perform and crashes constantly. It would be no different than a toaster that failed to work one out of 20 times -- it would be considered defective and the manufacturer would be required to fix it.

    The black-helicopters-are-spying-on-me/lower-my-taxes/ there's-a-Waco-coverup/they-want-to-take-my-guns-a way crowd will disagree, but we need government legislation that makes software a product just like anything else that we buy in a store. Then Microsoft would quit trying to find ways to embed javascript into e-mail and, instead, make Outlook reliable and secure.

  • To the worry that a non-expiring key would be broken: Make the standard software not be able to not expire. When and if the non-expiring key is required, issue a new .dll or patch that will accept a non-expiring key, issued with the key.

    I think that software rental is pretty much a pipe dream anyway. Anyone who has managed large (5,000+ workstation) networks knows that it is simply impossable to manage that many desktops effectivly. When things start breaking because of no support available, or when IT budgets get so far out of hand because of the people required, rented software will find a niche in smaller, easier to manage workplaces. When that happens, profit margins for the software renter's will fall, and it will just fade away.

    On the other hand, it is such a lovely looking possibility for continued revinue stream, no doubt there just won't be any other choice.

  • You are obviously posting into the wrong forum. I'm sure most Slashdot readers don't give a f*ck about this 'problem'.

    Obviously you have identified a huge problem area with this key-leasing scam. Then don't go for it.

    When designing defense electronics, there was allways this nagging about having a second source for as much components as possible. This was to achieve project safety for long term project.

    I'm sure the software using industries would benefit from this kind of thinking. Long term project safety and how to get that in the software world.

    Opensource makes it so easy since I can hire some college kid to do some editing and recompilation if necessary. If it's more complex, I might have to hire a consultant to fix the problems.

    With Opensource I'm in full control all the time. No ugly surprises anymore.

    //Pingo

  • The supplier will be toast, and so will you.

    So don't buy it.

  • by BluedemonX (198949) on Wednesday April 11, 2001 @10:17AM (#298230)
    I bought a piece of software called Bodycraft, which is supposed to generate a workout and eating plan appropriate to your wants/needs (e.g. gain muscle, lose weight, stay same weight)

    I bought it, and installed it on a computer, and called for the code to unlock the stupid software dongle, and everything went relatively well: although the program was buggy, I could hack it to work.

    Moved to a different computer some time later - whoops! Need to re-register. The phone was disconnected when I tried to call back for a re-registration (some stupid software dongle).

    Contacted the big name fitness guru who's name is all over the box - who said "I can't help you, that's the company, they screwed me too, yadda yadda yadda - but you know what, with this new company I'm working with, you can buy the same program AGAIN for $30 more!"
  • To speculate on "one thing" happening when subscription-based software companies go under is inaccurate. Public reactions to events change over time.

    What is critical is how the public reacts to subscription-based software and how people react to the first time a subscription service goes under in a very public way. That will set the stage for how people react in the future - and if people will maintain the subscription model.

    It is my hope that people are made aware of the dangers of subscription software - and that the first time a subscription service goes under (and one will) people raise merry hell about it. Then we will see precautions, then we will see harsh and serious reactions.

    But if this is not done, this will become "just another computer problem" people put up with. It will become like blue screens and failing dot-coms.

    What happens when subscription services go under? That depends on what WE are willing to make happen.
  • I used to work for a medical lab software company. While we didn't rent our software to labs, we did charge support and maintenance, which included free upgrades, etc. As part of each contract, we notified the client that the source code was placed in escrow: in the event that we went under, all clients got free access to the source so that they could maintain it, or hire others to maintain / enhance, etc.

    Seems like the same deal might work for rentals, *IF* (and I know it's a big if ...) you have the clout to insist on this from the software firm.
  • When you're renting, you have the right to use something for a specific period of time. That's all.
    If Hertz went out of business while I'm on my next trip, do you think they'd let me keep the rental car? Hell, no!
    I use EDA tools at work,which are typically time-licensed (for 100K+ per license) and if one of those companies were to go out of business, you'd be SOL. This doesn't happen too often in the EDA world, however. You're much more likely to have a struggling company bought by another company, and have the users hope against hope that the new company would continue to support old products (especially when all the employees in the acquired company have likely left).

    Which leads us to the question you should be asking :

    What happens when an old version of rented software works fine for you, but the vendor will only license newer versions that don't fit in your work flow or that would invlove significant cost on your part to perform the upgrade?

    At best, the vendor would sell you licenses without support, since they only have the resources to support the newest versions. At worst, they'll tell you that if you don't want to buy the new version, you can suck eggs. And they can do that, since you were only renting the software to begin with.
    This arrangement works for EDA tools, where you get significant support from the vendor in exchange for your $$$, but I imagine that when deployed in the software industry at large, it will only serve to screw the consumer even more, and put more money in the vendor's pockets in exchange for doing less.

    Is it any wonder that software rentals are the ultimate dream of any software company?

  • by ewhac (5844) on Wednesday April 11, 2001 @10:26AM (#298245) Homepage Journal

    In the consumer space, this has already happened with DIVX (the DVD "rental" scam). DIVX's answer to its customers was, essentially, "Fsck you."

    However, there are also several high-end software packages out there -- the old Diab C compiler and Perforce source repository system come to mind -- where you have to install a "license" server and periodically update the key that allows it to continue to operate. Doubtless others exist. How many of these have had their parent companies fold? What did their customers do? Was the eventuality covered in the contract?

    Schwab

  • by rgmoore (133276) <glandauer@charter.net> on Wednesday April 11, 2001 @10:26AM (#298246) Homepage

    The biggest problem is that you don't always have a real choice in the matter. There are real world cases in which there's a single vendor for a critical piece of software that you desperately need. Even worse, that's likely to become the case more often as software patents become more prevalent, as they give the companies legal monopolies in specific areas. If the company that holds a monopoly on your critical piece of software decides to offer their software only on a rental basis, you have only unappetizing options. You can break the law by writing your own software that violates their patent, rent their software with the odious terms that implies, or do without something that may be critical to your business success. This is the kind of messy decision that happens in the real world of effective monopolies that "free market" appologists choose to ignore when claiming that consumers aren't really stuck.

    What do you do when all of your choices are bad? Since the government is fundamentally responsible for this kind of mess by giving away monopolies in the form of software patents shouldn't they be involved in protecting people who wind up being screwed by them?

  • If it's Microsoft this isn't even a valid argument. They're not going under anytime soon, and they are the ones leading the push.
  • If Linux were a beer, you wouldn't be able to play your favorite drinking games with it. Nevertheless, drinking it would give you a false sense of superiority over all the people who don't drink it.

    -- Dr. Eldarion --
  • And what about my apartment? What guarantee do I have that the guy I'm renting from will give me a place to live for the rest of my life?

    HELLO. Why do you think they call it RENT? You have it, the rental period ends, it's done.

    Think this is a raw deal? Think you might get screwed? Then reconsider the software rental model.

  • Online RPGS potentially have this problem right now. Usually the way it works if the game is sold for about $30-$40, and you pay $10 to play after that. What if the company that owns Everquest or Ultima Online decides they no longer want to run the game? They close thier servers, all the players are SOL. UO has server emulators out there. I guess the same thing could be done with the subscription software. Someone would have to write a server to "emulate" the real keyserver. I wonder if a company could sue someone for providing software keys after the original company stopped providing them.
    =\=\=\=\=\=\=\=\=\=\=\=\=\=\=\=\=\=\=\=\=\= \=\=\=\
  • by sphealey (2855) on Wednesday April 11, 2001 @10:49AM (#298266)
    Actually, "source code escrow" agreements used to be quite common, and are still to be found in contracts for business-critical applications such as EPR systems. The vendor agrees to put a copy of the source code in escrow with a law firm or CPA firm that handles such situations, to be release to the customer if the vendor ceases to be a going concern (or in some cases if they terminate the product line), at which point the terms automatically change from license to ownership. I imagine most of the really big guys will put similar protection in the contracts with M$.

    Now, has anyone ever made actual USE of such an agreement? That I can't tell you.

    sPh

  • Boss: Install Windows on those 20 new Laptops for the boys in sales.
    IT Dept: Uh, boss? The authentication server at Microsoft is not responding...


    Of course it could be that the largest DDoS attack in history is being AIMed at the MS Authentication servers. Gee... I wonder if that would make people notice the inherent flaws in the system (probably not).

  • You don't really see a lot of this on the PC side (though I've seen it for some development tools), but on larger systems I believe it's pretty standard to have a code escrow option available. Any large package that's in a mission-critical niche probably has this available, especially products that aren't easily replacable. Examples of products where I'd be surprised if this wasn't available: PeopleSoft, SAP.

    Basically with code escrow, you have the rights to obtain the source code to the product under defined conditions, including the company going under or the product being discontinued. The details of how it's managed vary from contract to contract - the code may be stored with a third party (generally a law firm) or may be retained by the software provider.

    The kicker is that escrow contracts have a cost associated with them, and it may not be small (on an absolute scale; if you're doing a $10 million replacement of all your financial software then $100,000 for code escrow becomes just another mid-sized line item). They're also generally term contracts, renewable either when you renew your software license or annually though as with any contract other terms are possible.

    -- fencepost

  • "When you're renting, you have the right to use something for a specific period of time. That's all. If Hertz went out of business while I'm on my next trip, do you think they'd let me keep the rental car? Hell, no!"

    The difference being, when a car rental company goes out of business, they don't come by and rip out of your brain all the memories of any place you travelled to using one of their cars (ala "We Can Remember It For You Wholesale"). When business-critical software disappears, the virtual knowledge developed though the use of that software can disappear also, destroying your business process. That's a bit of a bummer.

    sPh
  • by Lostman (172654) on Wednesday April 11, 2001 @11:01AM (#298280)
    My university's mathematics department relies heavily on the use of Mathematica (a "god" in the mathematical notation and symbolic problem solving front). I loved it and I bought it -- and found out that there will be a problem if the publisher (Wolfram Research) ever goes out of business...

    When you run it for the first time, it notes all your hardware and creates a unique "id" that has to have a matching unique "password" to unlock the software.. sound familiar?

    The gist is, when the university decides that their 180 mhz computers just "dont cut it no 'mo" and upgrade, if wolfram isn't there to give out their unique passwords then the university has lost out on QUITE a lot of funding (The student version (full w/o manual) goes for 150 but the retail version (full w/ manual) goes for about 1150).

    Now, in these cases would it be "correct" or "right" to reverse engineer the software's security or at least use a keygenerator as found on the little warez kids sites... and what kind of trouble could a university find itself in if they did this?
  • by Sly Mongoose (15286) on Wednesday April 11, 2001 @11:02AM (#298281) Homepage
    "What happens when a software company from which you lease goes under?

    Suppose the company, without going out of business, decides they do not want to support the software any more? Perhaps they have a new version with more features (and a higher price/rental) that they are interested in pushing? Perhaps they merge with a competitor and now have two similar products competing with each other and decide to kill off one of them? Suppose they want everybody to switch to the (buggy?) version 6.0 so they can close down their v5 support department?

    There are any number of ways you could have the rented-software rug pulled out from under you. I guess you had better address that issue before signing on for a particular product and structuring your company's survival around it's continued availablilty!
  • Lets say you rent a car from some car rental place for 4 weeks. Sometime on week 2, the company is liquidated and they pull out of the car rental business. Now... do you really think that car belongs to you? Even though the people who loaned you the car don't exist? Nope. It belongs to the people with invested interest in the company - creditors. The assets (cars) will be sold off to pay the creditors as much as possible. It is possible that you could *buy* the car for an additional fee, but you may decide to go to another car loan company for your needs.

    Unlike the above example, software isn't a tangable thing. You have a right to use the software for as long as your licence term is valid, but once it is no longer valid you are required to stop using it - it no longer belongs to you - even if the company goes under. However, the creditors of the company may choose to do one of two things: (1) sell unlimited licences to recoup any losses, (2) sell the software rights to another company. In case 1, you may be given the chance to get an unlimited version that will never expire. Cool. However, if the company takes route 2 - which is likely if they can get a larger amount of $$$ up front - you'll have to deal with the new company for your needs OR go somewhere else.

    The good thing for consumers (on the software loan thing) is that we get to choose month-by-month what software we use. If we get tired of Word, for example, we stop using it and find another product - without wasting the whole cost up front. Say $10 per month for three months until you realize you don't like the software instead of $2000 up front with (as Microsoft seems to want it) no right to sell it to recoup your losses.

    Good: Choice, lower costs (short term), keeps software up-to-date.
    Bad: Instability of companies, higher cost (long term), someone else controls your software, lack of privacy (?).

    You decide.
    ---
    Computer Science: solving today's problems tomorrow.
  • Let's take it one step farther. Let's say your company accounting software is rented as a service over the net. Everything is web based and you just pay a monthly fee to use the application. Then application provider goes out of business. You suddenly find that not only does you application stop working but, you can't change over to another application because all your billing information is "unavailable." You see, as part of the "service" they store and protect your data too.

    Then you either pay up to get the data or you go out of business. You can sue the provider but they've already filled for bankruptcy.

    Or, say that application is written using Curl from our friends at Curl.com. And... One sad day one of their data entry clerks makes an error and your ASP's monthly payment is credited to the wrong account. This tiny error automatically instructs the curl plug-in in browsers around the world to start refusing to let anyone access the application. Then both you and the application provider go out of business. The ASP dies because of all the suits from pissed off customers and you die because you can't bill your customers. Then Curl.com dies because you all sue them.

    Well, probably not. But you get the picture. Everything is connected. Anyone stupid enough to rent software that way or to use spyware like curl gets what they deserve. You see....

    Stupidity is its own reward.

    StoneWolf


  • Escrow a copy of the source code and a copy of the application which generates the keys. The source code is kept up to date with the latest release and well as the key generator. If you bite the big one, the customer then has the right to request a copy of the escrow disk and generate all the keys they need. Many government agencies require this sort of a setup.

    This page was generated with the help of DOC++.
  • by gorilla (36491) on Wednesday April 11, 2001 @11:19AM (#298293)
    This is not a new problem. It used to be that leasing of hardware & software was the way that IBM did business. You didn't even rent foocalc 1.2, you rented production payroll for 1200 employees, complying with all federal & state statues'. If you found you could only produce 1000, or there was a statue you weren't complying with, then IBM would fix it for you.

    This is one of the reasons why IBM was investigated & the prosecution started for anti-trust.

    Businesses never liked this model, they wanted control over their destiny. I see no reason to suspect that business has changed much in the intervening 40 years.

  • What happens if the company who rents me my apartment goes under? Do I lose my place to live?

    Bad, bad analogy. In the case of an apartment complex, you've two key differences from renting software:

    The smaller difference is that a physical asset, such as a building, is less likely to be forgetten during asset liquidation. An intangible, such as license key generation, is much easier to "lose". In the Slashdot article text, they specificially mention the "free use" key as an option that only kicks in under the absence of a new company picking up the key generation/licensing duties.

    The more important difference is that, in the case of an apartment, there are laws that protect you from getting kicked out in the street. In addition, you've got a binding contract with the rental agency to lease the apartment. In most software cases, the only contract is a one-sided EULA. Furthermore, the software company doesn't have to initiate a process similar to eviction in order to stop you from using the software -- they merely have to fail to issue new license keys.

  • No, the bigger question is "What happens when the company stops renewing license keys?"

    Why do I say this?

    Look at what M$ could do with Office. They rent keys for Office XP for a year. Then they decide they need a budget influx. So what do they do? They announce Office SX. And in 3 months they stop supporting Office XP. Which means once all your license keys expire, you are *forced* to spend a couple thousand bucks (if you're a personal user or small business) or maybe even a few hundred thousand to upgrade to the newest version. And then guess what? Back to license keys....

    This has got to be one of the best business ideas M$ ever had....
  • I'm currently participating in contract negotiations for a large (niche) software purchase. One of the terms we require to be included in the contract is; if the company goes out of business, we get the source code for all of the software we are licensing. If the company does not agree, we don't purchase the software. I suppose that some companies wouldn't agree to this kind of inclusion, but we generally take the hard line and refuse to purchase the product without it.
  • by dcavanaugh (248349) on Wednesday April 11, 2001 @11:25AM (#298298) Homepage
    Why rent anything to satisfy a need that doesn't go away? Installing any non-trivial software system is an expensive proposition. My thought is that we buy something with the intention of keeping it long enough to justify a perpetual license. If we honestly plan on walking away from the product in less than 5 years, I have to ask the questions: (1) "Why are we doing this?" (2) "Can we find something that is not a throwaway system?" Of course, we pay for annual support, so there is always a "pay-as-you-go" element to all of this anyway. Why should we tolerate a periodic licensing hassle? In the pure throwaway scenario, you look for an ASP -- simply buy the app, server, and service concurrently.

    Having the perpetual license is an important damage control mechanism. Software companies go bankrupt or they merge and put the customers on a "death march migration plan". We need to have the option of indefinite self-support, so as to keep the existing systems on "life support" long enough to consider our long-term options.

    I predict we will see more and more companies (led by M$), trying to make this a "pay-per-click" world. I also predict the free market will continuously reject such initiatives. I don't want to rent an app any more than I want to rent a phone, house, car, clothing, eyeglasses, appliances, furniture, computer, or DVD (remember DIVX???) The final nail in the Rentware coffin is that software rental is an operating expense, whereas software purchase can be capitalized.

    The only positive thing I can imagine is that Rentware makes it easier to walk away from a bad decision. If you buy the wrong software, you can eventually stop paying for it and buy something more appropriate next time. I have seen a few systems that were poorly chosen and eventually discarded. Renting those would have been nice. Not as nice as buying the right thing in the first place, but better than a total writeoff.

  • I'll bite (gotta love trollbait). Car rental companies rent commodities. A software company has exclusive rights to distribute its product.

    Still wondering about my point? If a car rental company goes out of business, you can still rent cars from a competitor--other car rental companies are allowed to rent the same cars. If a software company goes out of business, what happens? That is the whole point of this discussion. Very often, software rentees depend on the software in question for running day-to-day aspects of their business.

    The answer probably lies in standardized legislation. In all American states (except Louisiana--Napoleonic Code still rules their land...), the rights/responsibilities of all parties in commercial transactions are spelled out in the Uniform Commercial Code, or UCC. This piece of legislation is now outdated. It will need to be revamped soon, as the industry is moving obstinately towards software rental. My only suggestion is this: if a software rentor goes out of business and no successor is found, the company should be forced to make permanent keys available to all customers. The company can not be harmed, as it no longer exists. The rentees are stuck with the unforeseen responsibility and cost of migrating to viable software products, so the free permanent key constitutes a financial remedy for the rentors transgression. IANAL, just a /. reader.

    Frankly, I notice more knee-jerk reactions on /. lately; i.e. "if you don't like it, go with another vendor", and "blah blah blah..." Readers are obviously posting before thinking. It's becoming a Rush Limbaugh-style forum.



    If you love God, burn a church!
  • The real issue is rent control for software. Do you have the right to continue renting it, or does the vendor have the right to refuse to renew? That determines what happens in a bankruptcy.

    It's an important contract term to check.

  • Umm.. no.. see under most rental agreements, like the ones MS is planning, you don't pay thousands for the upgrades, you get the upgrades with your legal rented license keys.

    See, thats the appeal of licensed software. You dont pay lots for upgrades, you pay incrementally for future upgrades.

    You should checkout microsoft.com and read up on thier plans instead of spreading FUD.
  • One of the reasons MSoft is pushing the software rental business model is that they are percieved as stable and in it for the long term.

    A model where it is critical that the company providing a solution is percieved as being stable and around for a while will make it extremely difficult for new companies to become accepted.

    Turning the client/vendor relationship into a user/service-provider relationship means that the client is being asked to invest more heavily in the relationship. What will the user recieve that a client in a c/v relationship would not?
    Perhaps better updates/bug fixes, more input into the direction the software development is moving, a pricing model that allows for incremental payments rather than a large initial investment. Whatever it is, there has to be a good enough reson(s) for people to adopt this software model.

    I consider it my responsability to know both the pros and cons of said model and be able to help decide when and where it is appropriate to use a rented model over a bought model.

    I know that I prefer to have software that I can adjust and tinker with (OSS), but I also know that I'm still in the minority on this issue and many of the companies where we all work rely on closed source applications. So it is important to have this discussion here and now so that we can all bring these issues up when we're asked our oppinions on rented software at work.


  • Generally you are screwed when this happens. Time limited licenses are not a new thing, many highly specialized companies use them (often through FlexLM) for software projects that maybe a few hundred people in the world own. Depending on how shrewd you were when you negotiated for the software, you can easily be left holding the bag if the company goes under.

    The only things that have kept this from blowing up before was the intrisnic cost of the software (people really pay attention to the license when the software costs $20,000/year) and that not too many of those expensive specalist houses have gone under yet.

    Down that path lies madness. On the other hand, the road to hell is paved with melting snowballs.
  • Liquidators are in the business of liquidating assets, not in the business of leasing software. Liquidators know absolutely nothing about running a software company. The idea that they would take over the business operations of a failed software company is sheer fantasy.

    Here's what will really happen:

    The software company ceases operations. It immediately lays off all of its employees and cancels its building lease. All of the physical assets of the company -- mostly computers, backup tapes, and office furniture -- are carted off and stored in a warehouse.

    Within days or weeks, a liquidation company will be hired to dispose of the company's assets. They will receive a warehouse full of office supplies and desktop computers, and backup media, some of which happen to contain the only existing copies of the source code to not only the software, but also the program that generates the license keys.

    The liquidation company will have orders to immediately liquidate all of the assets in order to pay outstanding bills -- such as unpaid rent on the office the company was based out of.

    The liquidation company will know absolutely nothing about the contents of the computers. Most likely, they will have implemented a policy, for their own legal protection, not to sell computers and media without erasing them first. After all, those computers might contain other companies' trade secrets or licensed software, and the liquidation company would be exposing themselves to massive liability if it sold off the computers without erasing them first.

    The liquidation company will degauss the backup tapes and label them as bulk-erased media, and they will format the hard drives on the computers and label them as "used computers", then they will place an auction advertisement in the newspaper, and sell off the media and computers.

    As a result, the software source code -- and license key generator -- will cease to exist in any form whatsoever.
  • I can't ignore this example anymore...

    If you rented it for four weeks, you got it for four weeks. Now, if you don't catch wind of all these changes in the rental company until you're back and ready to return it, guess what? The car rental agency *will* have people around to collect the "assets" and be done with it.

    Likewise, if a company goes under, it's probably already in debt. Those creditors want cash, and the best solution, since you can't manage your operation anymore, is to go ahead and charge a little bit more for a single cost, distribute a non-expiring key, and let you have it. They take that bit of cash, pay of the creditors, and go home.

    If you need the software that badly, you *will* purchase it at that point. If not, you'll back out and make sure that your data is readable by something else.

    This will make more sense as more places go for this model. Microsoft seems safe, but if *everything* goes wrong... XBox fails, MS is forcibly split and can't make enough cash, .NET proves too much of a security hole, etc... the company might fail, and then that's the end of that. Being that so many companies are married to Windows, there will need to be some kind of failsafe to allow MS to clean up its own mess, and leave the users with something that's at least going to keep on running as if the rental period were still in effect.


    Raptor
  • By your concept of "rightful income", it should be illegal to not buy your toaster for any reason. Making a copy of your toaster is only one way to deprive you of your income for them. Other methods include buying a competitor's toaster, using the oven instead, or not owning any bread-toasting mechanism. Why one is inherently damaging to you do the point where it should be illegal while the others are considered to be perfectly ok is really beyond my understanding.
  • This was on a much smaller scale, but yes. The company that I work for has made use of such a thing. And got the code. And it was indeed there. But one of the central modules had been translated to 360 assembler code (my guess is that it was written that way, but my assembler is way to rusty to tell).

    This doesn't help much if you're trying to port it to a PC. And all of the code was supposed to be in Fortran IV. But there was no way to tell until we went looking, which required waiting until the company was out of business.

    We used a crippled version for a couple of years, getting around the broken spot with hand work and custom code that partially worked. Eventually we bought an entirely different system that does about the same thing. Pretty close. Well, the pictures are nicer. And it's more interactive.
    That's supposed to be a plus.

    So it sort of worked, and kind of helped. Maybe a larger company would have been more careful. About something that nobody would see until the company was down the drain anyway. And cost money to maintain, but didn't bring in any. And nobody could verify whether it had been done correctly or not.

    Maybe.


    Caution: Now approaching the (technological) singularity.
  • Actually I ment the Lemmings... not the people pushing the drivel of "Subscription Software" :)
  • When designing defense electronics, there was allways this nagging about having a second source for as much components as possible. This was to achieve project safety for long term project.

    Some readers may be old enough to remember why this was so. Many moons ago, Lockheed owned a huge percentage of the entire defense industry. Much of our national defense depended upon Lockheed products. Then Lockheed tanked. Stock used to be 60, went down to 3.

    In a normal marketplace Lockeed would eventually have been forced into bankruptcy. However, since the country couldn't possibly allow this to happen, they were bailed out - the first big corporate bailout in American history, but not the last. Those investors smart enough to have spotted this (my father among them) made out like bandits.

    Now, having learned this lesson, the DoD insists that everything in every defense project be documented out the wazoo so that the contract can be moved to another company. This isn't actually practical in most cases, but at least it forces a lot of documentation to actually get created. :-)

    This attitude has spread to the commercial world, leading to such things as source code escrow. The companies which are now pushing for software rental will, of course, fight such escrow requirements as vigorously as the rest of us fought key escrow, and probably more viciously too, so don't expect source code (or software key!) escrow to be adopted quickly or universally.

    Remember, the same things we hate about encryption key escrow can be applied by them as arguments against software key escrow.
  • No, the bigger question is "What happens when the company stops renewing license keys?"

    This actually happened to me once. I was working for a small transportation company and we were renting an application that allowed us to track shipments, autmate billing, AR, AP, etc. The company from whom we were renting the application ended up being acquired by another company that specialized in the same field. A few months later we received notice that they would no longer be supporting our application but that we would be able to upgrade to the other company's application (which had a significantly higher cost). Of course we didn't want or need the other companies application, nor did we want to pay the additional monthly expense.

    I ended up leavintg the company before it was resolved and my former employer went out of business within a year, so I have no idea what they eventually settled on. But things that like do happen sometimes.

    Back in those days it probably would have been relatively easy to break database on our systems and convert it to another system. Of course, nowdays it's probably illegal to do that, even if it is your data.
  • Okay.. sure.. how about this: find me a software package that handles dog registrations specific to counties in Southern Maine (Cumberland County), that has been State Approved (required by law, mind you) AND that is freely distributable.

    I'll save you the trouble. It doesn't exisit. Despite what RMS or other free-software types belive, properitary pay-for-use software creates demand, will help fills important software niches.
  • If it's Microsoft this isn't even a valid argument. They're not going under anytime soon, and they are the ones leading the push.

    Software rental was around long before Microsoft ever existed. In recent times it's only been common in vertical markets, but I assure you that it's always been with us. Microsoft may be "leading the push" as you put it, but they're only leading the push into common desktop software. Everywhere else it never went away.
  • by kobotronic (240246) on Wednesday April 11, 2001 @12:18PM (#298329)
    Rentware : DIVX. Didn't anybody learn from this sordid mistake? Apparently not. Here we go again. This time it is Microsoft pushing for the same godawful, boneheaded concept.

    • Question: Can you still use your data when your application dies, because your subscription expired, because the company died?

    • Consider: So what if you go flat broke? You bought, ahem RENTED an application while you had the clams to pay for it, and now you don't have your clams no more. So now you can't use Word to type up a new resume. Doh!

    • Concern: So how many generations of NT/XP/whatever before you can't even start your computer without the OS validating its license key with Microsoft over the internet? You're really up the creek if you take your laptop on the road then, aren't you!

    • Extrapolate: It seems only the logical next step for Microsoft to start pushing for an IPIX-style per-document, per-file licensing scheme. As soon as that becomes the industry standard, you'll not only be paying your Microsoft taxes, you'll also see ads like ...
      • On SALE! 10 Adobe Photoshop .PSD file save keys,
        only $20 with $10 mail-in rebate!
        ( Also lets you save 20 *free* .JPGs )
        Click to pay with your Passport registered credit card...

  • I'm a Dartmouth College student and that happened here. Here's the story:

    Once upon a time our math department used Mathematica. They liked it, or at least used it, because it's pretty much standard. They used "Keyserved" copies of the program, which is a little thing which allows software to work only if you log on as a validated user, and only so X number of the program can run at once. Everyone liked this setup just fine.

    Then five or so years ago the Mathematica people were developing a new version of the software and Dartmouth was very, very active in the testing and debugging of it. All during the debugging process we used Keyserved copies of the beta software.

    Come release time, Dartmouth bought X number of copies of Mathmatica. When they arrived, they weren't Keyserved. "Whoops" we thought "They sent us the wrong software." So we asked them about it and they said "Oh we were never planning to release the final version under Keyserve."

    Dartmouth told them in no uncertain terms to stick Mathematica where the sun didn't shine, and we've been using Maple ever since.

    I don't know how much money Mathematica lost due to Dartmouth switching, but think of a couple hundred copies of the software (that might be a tad high) at $1500 a piece or something (Keyserved software is generally a tad more expensive than out-of-the-box software because so many more people have access to it), plus countless copies that would have been sold to students and faculty for home use.

    That's not a very sound business decision.

    MyopicProwls

  • 13013dobbs writes:



    Yeah, we see how well that has worked so far.

    Keeping with the topic, it most certainly has avoided the obsolescence issues raised in this article. Even in the absence of the mechanism of temporary keys, users are left high and dry when proprietary software is abandoned by its vendor, or taken in a direction that the users do not want to follow.


    The choices for people who want to avoid proprietary software are far from perfect, but are getting better all the time. The long term is looking quite good.


    More and more, users that are screwed by the software industry are doing so due to their own ignorance of the choices they have before them. Therefore it is difficult to sympathize with their problems.

  • Why can't the "libertarian" in you and others see that business works within the framework of government and its laws thus its only fair game for consumers to use the same framework to protect themselves.

    I can't begin to see why law should only be the tool of business because you think we have too many. If the government has helped to create an unfair situation counter-laws and repeals make perfect sense.
  • > it notes all your hardware and creates a unique "id" that has to have a matching unique "password" to unlock the software

    Yes, and (for the Windows student version, anyway), it's also tied to your partition table. I resized my Windows box (where my student copy of Mathematica resides) once with fips, so I could install a copy of Linux, and when I tried to run Mathematica again, it told me it had an invalid key, and that I had two weeks to get a valid one before it stopped working. I had to request another one (on the plus side, they were quite prompt about it).
  • First of all, I'd like a direct link to their rental plan.. browsing their site, I can't find one.

    Secondly, I won't dispute your post entirely, but I'm *sure* that the rental agreement says that Microsoft has the right to terminate the license at any time, or at least not renew it. While they may say that you will pay incrementally for upgrades, do you really believe this? Will upgrades, then, be forced? If not, what happens when various upgrades conflict?
    I don't see this as what M$ plans on doing. I suspect you will pay for upgrades in addition to the rental fee. Maybe the upgrades will cost less than a normal upgrade, but I bet it will be there, nonetheless.
  • This problem's been around for quite a while in another form. Suppose MightyConglomerate wants to buy software from GarageShop, which doesn't want to release the source code for obvious reasons. MightyConglomerate requires GarageShop to escrow the source code, to be released to buyers in case GarageShop goes under. Its done all the time. It could also be done with keys.
  • by gilroy (155262) on Wednesday April 11, 2001 @01:18PM (#298346) Homepage Journal
    Blockquoth the poster:
    The problem is, if you can make a perfect copy of something, with little or no difficulty or expense, you can rip off the producer of the item. There has to be some means of protecting the property rights of the producer.
    Property rights should be protected. Intellectual output is not property, except through a linguistic perversion... precisely for the reason mentioned: You can make perfect copies at zero cost; therefore, the true economic worth is zero. The "value" of intellectual "property" is created solely by the state-sanctioned monopoly given to the creator.

    Is that necessarily a bad thing? Maybe not. (Maybe -- it's not clear why, other than some vague moral sense, you have a "right" to profit from your intellectual exertions. It seems, to me, to make about as much sense to demand a "right" to profit from, say, breathing.) But since the value is created entirely by the people (by surrendering of their rights), one can imagine the government, perhaps, having a say in what mechanisms are used to maximize that value. To wit, copyrights and patents should exist to serve social ends.

    I am continually astounded by the free-market libertarians who carp about people interfering in the "natural" market by "ripping off" the creators of intellectual output. Of course, if you really believe in the dead hand of Adam Smith, you recognize that the value of something is the price that someone is willing to pay; that is, the opportunity foregone by a purchaser. In the Digital Age, since copying is a cost-less process, the actual value of intellectual output has fallen to essentially zero.

    This might lead to the End of the World as We Know It, but it's the way that free captialism will tend.

  • And what about my apartment? What guarantee do I have that the guy I'm renting from will give me a place to live for the rest of my life? HELLO. Why do you think they call it RENT? You have it, the rental period ends, it's done.

    The analogy doesn't quite work. And it brings to the forefront the 'problem' with rented software. If you have to move your apartment, you can take your furniture with you. It doesn't have to be replaced because you move nor do you have to pay to have it all reupholstered, etc. If you've rented, say, a word processor with proprietary formats, and you no longer have your lease without notice, all you have is gone. It's the downside both the consumer and the seller need to take into consideration. They can (a) have you over a barrell by forcing you to pay whatever they want one one has significant penetration in a market. In that sense they have the customer over the barrell. On the other side, if a company does go under or for some reason can no longer provide keys, at what point are they liable for all existing documents (in this instance) and the customers ability to access them? (Maybe the ca. power situation has awakened some, but how many companies have good disaster recovery plans? If they burn down, etc, where is their liability if they can't provide keys for products they've 'sold'. There's a lot more at stake for a company at that point than just physical plant problems if they have a disaster situation. Corporations, though not enough, pay through the nose for good disaster plans or they can be out of business in days if not hours. Software companies, to my knowledge, have never had to face the situation from this perspective.)

  • Someone else could just release a .dll that makes it so it doesn't even NEED a key.

    That will happen in any event. If it can be hacked, someone will. Any key/dongle system can eventually be hacked.

  • Where large companies purchase software (especially the stuff requiring a yearly renewal) they will in some cases require that the vendor place the source code to the product in escrow with a third party, that in the event of the vendor's closure, discontinuance of the product or bankruptcy, customers will be issued a copy of the source code to the software with right to use internally. Smaller customers may not have the leverage to require this but it is worth asking about.
  • by jmorse (90107) <joe_w_morse AT nospYAHOoam DOT com> on Wednesday April 11, 2001 @01:27PM (#298351) Homepage Journal

    Actually, I believe (and please correct me if I'm wrong) writing your own software would be OK under US patent law, provided you don't sell it. But then, doing so might be more expensive than paying the crappy subscription fee.

    Of course, the only ones who won't be affected by a move to subscription models are the big customers who get special deals (i.e. non-rented copies)...

    I guess that's what America gets for entrusting its prosperity to corporations...

  • I work for a small company that does business with much larger companies. I'm sure many Slashdotters are in the same situation. GiantCorp tells us "You will send us files in this format, because that's what we use." If we responded, "I'm sorry, the software that creates those files is based on a subscription model and we are philosophically opposed to it", we would get laughed off the conference call.

    -B
  • by jms (11418) on Wednesday April 11, 2001 @01:43PM (#298358)
    Should a law be required that if such a company goes under, they must either sell the rights to rent keys to another company, or provide non-terminating keys to the current subscribers?"

    Let's call the failed company "FailedCo."

    FailedCo "notified" their employees of the company shutdown by changing the lock on their door. (Common practice!) They immediately laid off their entire staff and cancelled their lease on their building. The entire contents of the office, including the computers containing the source code to the software as well as the license key generator -- were loaded up into a truck and piled in a non-climate controlled warehouse, pending Chapter 11 proceedings.

    As the case drags through bankruptcy court, more and more customers are faced with license key expiration, which means that they are going to be forced to abandon using the software. This makes the "rights to issue new license keys" less and less valuable over time. When the last license key expires, and the last customer has to abandon their software, the "rights to issue new license keys" falls to a value of zero dollars.

    Let's say, for argument's sake, that the judge orders FailedCo to "find a company to continue licensing the software to current customers."

    No company in their right mind would agree to do so!

    Why? Let's say, for the sake of argument, that a company, "ReceiverCo", agrees to do so.

    First off, they are being asked to take on the business operations of a failed software company, and pay good money for the privilege!

    Second, even though they have the rights to sell license keys and continue to maintain and develop the software, ReceiverCo is first faced with a daunting problem.

    The problem is a warehouse filled with computers, huge boxes piled full of cryptically labelled or unlabelled floppy disks, 8mm tapes, and zip disks.

    Before they can issue a single license key, they have to figure out:

    1) Are all the computers intact? Have the hard drives crashed? Do they boot up? Do they have to be networked together in a certain way in order to work? Are some computers NFS servers? Do they have to be manually restarted when they come up? How much time and money is it going to take to figure this out?

    2) Which are the important computers -- the ones with the source code and the license key generator, and which computers are unimportant -- the secretary's computer. The "important" computers are probably protected with unknown passwords. What are the passwords? Are the really important computers protected with encryption? How much money will it cost to hire "hackers" to break into all the machines, and sift through the 80 gig hard drives to find the valuable "assets" -- the source code & license key generator?

    3) Was the source code left in a buildable state? Remember, all of the developers are gone, and with no warning. Their computers are probably filled with test builds, undebugged source code, obsolete source code, and probably even entire non-working, experimental build-trees. Parts of the program are in C++, parts are in undocumented assembly language, and the internal build scripts are written in an in-house written scripting language that no one outside of the company has ever seen before. What if FailedCo itself has been licensing code from another company, and that license has run out?

    4) How do you run the license key generator? Odds are, it isn't a nice, well-written application. Most likely, it's an obscure command-line program, with a non-obvious, non-documented syntax. How do you even know when you've found the license key generator? Is it that binary called "lkg" in the home directory of an account called "lisa" on any one of 35 identical-looking computers? The "lkg" command just spits out "incorrect syntax" no matter what you type, so how do you know if you've even found the license key generator?

    Remember, all of the people who staffed FailedCo are gone. They have new jobs. They've filled their heads with new information for their new job, and barely remember this stuff. And their getting laid off was such a bad experience that they have no interest whatsoever in helping ReceiverCo revive FailedCo's products. Or maybe one of them will do the job -- at an extortionate price.

    It could literally take months to years and hundreds of thousands of dollars in manpower to conduct what would amount to an archeological dig through all those computers, and reconstruct the license-key granting program & procedure.

    All this to secure an asset of unknown value, that is quickly free-falling towards worthlessness.

    No company in their right mind would ever do it.

    What will really happen is that FailedCo will fail to find a receiver, and the judge will order that the company's assets be liquidated. All the files and computer media -- floppys, backup tapes -- will be either sent to a landfill or bulk-erased and sold as used media, and the computers will have their hard drives either removed and destroyed, or reformatted, and the computers will be sold as "used computers, without windows", at auction.

    And the source code and license key generator will cease to exist.
  • What you say may be true, but you're not really listing all the options. You can also:

    A) Restructure the application so that it doesn't need rental software.

    B) Restructure the application so that you can write your own stuff and not infringe on the hypothetical patents.

    C) Restructure the business so that it doesn't need the application, or needs a different application.

    D) Move the business into some other field.

    All of these have been done. Me I'm kinda the spiteful type. If I believe someone is extorting me (especially in regards to software) then I'll go way out of my way to stop the situation. Not everyone is like that though.

  • we need government legislation that makes software a product just like anything else that we buy in a store.

    No, we don't. What we need is to get rid of existing legislation that grants extraordinary powers to "owners" of intellectual property. It should be common sense that click-wrap restrictions and EULAs are not legal contracts and thus are unenforceable, but government has seen fit to screw the consumers with bought-and-payed-for legislation such as UTICA and the DMCA. As with many problems, we would be in a much better situation if the government had just stayed out of it.

  • by markmoss (301064) on Wednesday April 11, 2001 @02:27PM (#298367)
    I would recommend more than that: have the contract provide that a reliable third party hold copies of the source code (if you don't normally get it) and the technology to renew the keys. Then if the leasor goes under, you not only own the software, you have someplace you can go to get it. I'd say that any company that rents mission-critical software without clauses like this in the lease is living dangerously.

    I have only one question. Why just rental software? I know of some DOS and Win 3.1 programs that are still useful but don't run on Win 98 or NT, and presumably won't run on anything MS will be supporting in a few years. You should be able to get the source code on software you bought when the vendor ceases to support it.

    I don't believe it would be a good thing to pile on yet another law to deal with these situations. The best solution would be for the corporate bosses to extract their craniums from their rectums and realize that they need to insist on something like this in the contract before they buy or rent _any_ software, and tell M$ that they'll just have to use open source until they can get such contracts. But meanwhile, several changes to the copyright laws are in order: (1)A much shorter term for books, movies, and music, and a very much shorter term for software. (2)If you stop publishing it, you lose the copyright. (If you are worried about rights to derivative works, you can keep it in publication forever by just posting it on the web.) (3) To copyright software, you must put the complete source code on CD and file it at the Library of Congress. Once it becomes public domain, the source is available to the public.
  • [theoretical scenario snipped]

    Well, I watched one company in this situation go down -- whose business was in telecom equipment. Its customers were major internaitonal players: TeleDanmark, Deutsche Telecomm, Cable & Wireless.

    About three months after the business was sold, & the hard assets were auctioned off (I heard it was a rushed affair, & assets went for pennies on the dollar), one of the former employees was back in business working with these customers. The story I heard was that he got his hands on the source code, was able to hire a number of staff whom he thought were talented, & sold support for this legacy product.

    I'm not sure just how he got ahold of the source code: whether he (or a fellow coworker) started to implement an unofficial backup archive at his home, or he approached the major creditor, cut a deal & they made sure certain records were not deleted.

    Sometimes a product *can* survive the death of a company. Maybe there's hope for WordPerfect yet!

    Geoff
  • Unless THEY [M$] are the ones to go under.... While it is unlikely, it would be an interesting happenstance.
    I can easily think of one scenario. The courts finally wake up and realize that software is a product, that it is sold to consumers like other products, and therefore that those clauses in the EULA's saying that they are not responsible for whether it works or not violate the UCC. Then everyone sues M$ for all the time and work lost in system crashes, and all the hours spent on hold to tech support and then re-installing Windoze because tech support doesn't know anything either ("incidental and consequential damages", and they can't be limited in the warranty on consumer products). Poof, M$ is the most bankrupt company in history. (Bill Gates' mansion is presumably not company property, unfortunately...)
  • Are you sure you can physically get your hands on the code if the supplier's offices are padlocked?
  • Unfortunately, the UCC has been updated to take into account what the software companies want. It's called UCITA, and it takes real nerve for the authors of that to call other people "pirates". Fortunately, it's been rejected in most states where it came to a vote, but keep an eye on your legislature.
  • ... all of which damn well better be done before the software company tanks, because then it's too late.

    It will be very interesting to see if the new "leased" version of Microsoft Windows contains a license key generator escrow clause in the user license, because Microsoft's business and licensing practices basically set the standard for the industry, for better or worse.

    I'm not holding my breath though.

  • Think of it not as an apartment, but as a commercial building, which you have paid to remodel to fit your business... This is a slightly better analogy, because quite often the data you have accumulated in proprietary formats (.doc, .xls,...) is more valuable than the software you use to access it. But to make the analogy really complete -- you had all your furniture custom built to fit this one building, now they take it away from you, and they have the building design patented so you can't hire someone else to build one just like it.
  • I think business consumers should be mindful of alternatives as a preventative measure. Like making sure if one supplier disappears, you can always find another. This is one good thing about the OSF/FSF/BLAH/BLAH/BLAH initatives - if one supplier disappears (say, RedHat falters), you can always go eleswhere (SuSE, Slack, etc) and get a similar product. In the event that something happens to the developer of a product, someone else can pick up where they left off - without the red-tape of business to hamper their work.

    I think what I said in the end is true, however. There will be higer costs up-front for traditional boxed software, but lower overall cost - since you only buy it once. There will be a lower initial cost and lower recurring costs with "on-tap" software because you pay-as-you-go and can stop at any time.

    When you compare the two, there are some advantages for consumers. But these advantages (stoping at any time, for example) are only worth anything if there is competition. Something that Microsoft simply doesn't understand - their idea is to buy out competing products and integrate them. When the competition goes, so do the advantages of "on-tap" software.

    Blah... remember, my opinions only ;).


    ---
    Computer Science: solving today's problems tomorrow.
  • Actually, I believe (and please correct me if I'm wrong) writing your own software would be OK under US patent law, provided you don't sell it.

    /me heads off to www.uspto.gov [uspto.gov]

    Actually, United States patent law includes language to the effect that to "make, use, or sell" an invention under a subsisting patent without permission of the patent owner is patent infringement. (Read More [uspto.gov] at USPTO.gov.)

  • By the way, if the toaster was sold "As-is, no warranty"

    But it isn't. Why? Implied warrant of merchantability. If I sell you a toaster, it has to work as a toaster, or you must fix it, or replace it, or give my money back. You can't sell me a toaster that doesn't plug into my outlet, only takes one kind of bread, or any of the other shenanigans software companies pull before refusing to give you your money back.

    Too many people were sold too many bad products with 'as-is' liability, got pissed, and now we have further consumer protection laws. Wait till shit hits the wall when Congress realized that shitty software and no accountability is hurting consumers and business alike. We'll have a change..
  • I dislike Mathematica and its retarted syntax, who the hell types Sin[x]. I hate its bloatedness, its bugs, and I really hate the $hitty UNIX version that looks like a 5th grader ported, when it has been on UNIX forever

    I am not a big fan of Maple either. It crashes too much, and it can't factor worth a crap.

    Use Maxima instead. It's free, GPL, fast, feature full, and has a clean interface, all LISP.

    http://www.ma.utexas.edu/users/wfs/maxima.html
  • If there is someone left with rights that has the power to sue for loses, then that is the same someone that would be required to continue its support or that person/company would probably be liable for damages in the first place.

    When a f__ked company [f---edcompany.com] dies, a holding company buys up its assets, including GGM[0] rights. The holding company may then discontinue the product and support therefor, leaving you with no central license servers.

    "So crack it." Four letters: DMCA [everything2.com]. And even a copyright owner brings about no legal action, the Federal government can still prosecute criminal copyright infringers in the US.

    Rented software (and proprietary software in general) give me too much discomfort for me to continue using them more than absolutely necessary. A large [freshmeat.net] library [opensourcedirectory.org] of free [gnu.org] software [sourceforge.net] makes this "absolutely necessary" absolutely small.

    [0] Government Granted Monopoly. I prefer this term to "IP" (intellectual property) because it more accurately describes how the United States Code treats copyright, trademark, and patent issues.

  • Don't buy software from such companies. Then they'll sink SOONER, rather than later. And your critical data won't be locked up in proprietary formats you can no longer open.

    I'm actually serious folks, not just being a anti-corporate /. whiner (though I am usually ;). This could be a viable business plan. When your competitors' software ceases to run and they lose their work, you will be in the lead because your company wasn't foolish enough to accept such a risky business model.

    However, as soon as a really major company feels the bite of this, there will probably be a huge lawsuit against whatever company discontinued their software leasing. And that might change things. Until then, about all we can do is boycott such software in the desktop market.

    -Kasreyn
  • Maxima rocks. There's an interface too, at http://symaxx.sourceforge.net, that has some interesting features. It may not be as flashy as Mathematica, but for school use it will do the job just fine. And unlike the student version of Mathematica, it doesn't be come illegal to use it when you are no longer a student.

    (Pay HOW much to get software with a time bomb in the license? I'm on a student budget here. Even a hundred odd bucks means a lot.)

    Check it out! Maxima can do symbolic integration, handle linear algebra stuff, plot 3D functions, and lots more. Symaxx (when working properly - it is in beta right now) can handle gnuplot stuff, output in TeX, map dependances between expressions (the interface is unique in my experience - take a look at a screenshot to see what I mean.)

    Maxima is based on the same fundamental core that Macsyma was, before it folded. Macsyma's interface was super-cool, but all we can do now is start up our own open source projects around Maxima. Maybe someday we will equal and exceed the capabilities of the commercial packages, but even now Maxima will handle most stuff students would want to mess with.

    The symaxx site has maxima RPMs for the most current version, and Debian users can get it using apt-get (I think the new one is in the unstable branch.) Symaxx itself is perl, so you don't need to compile it, but check the instll instructions because there are a few depends to take care of. If you don't care for symaxx, there is a tcl program called xmaxima included with 5.5. Us it rather than command line - the terminal command line interface of maxima needs work.
  • Slightly off topic but.
    Mr Smith probably would be outrages at how his theories and thoughts have been subverted in the intervening years. He as a pretty smart gentleman by all accounts so if he were trying to make the same point now he would have taken into account the accumulated knowledge of the past couple of hundred years. Most blatantly he like most of his compatriots considered clean air, water, trees, etc to be an infinate resource which we have learned since are not. If he was alive today he might not have written the same books.

    It always boggles my mind why people who would never rely on medical techniques of the 1800s would rely on philosophical or political writings of the same period. Our knowledge of the world around us and of the psychology of the human being have grown immensely yet we still point to hundred year old books and say "see he said you should do this".
  • It's not just copies. Here are some things I can do with a toaster that I can't do with software.

    I can use my toaster in my house or in my friends house or in my garage.
    I can use it make toast for my friends.
    I can sell it to somebody else if I get a better toaster.
    I can lend it or give it away to anybody I want.
    I don't have to tell the manufacturer my name, address, date of birth, social security number etc. I can buy it and use it without them ever knowing who I am.
    It it breaks I can take it back and get a another one (if it's under warranty).
    It it's not under warranty I can take it to someone and ask them to take it apart and fix it, or I can attempt to fix it myself.

    "There has to be some means of protecting the property rights of the producer"

    How about this: Property rights only apply to property. If you want property rights protection then treat it like any other property.
  • Which proves how silly the law is.
  • Presumably the subscription will continue to be source of assets that somone will be interested in.

    This is called "securitizing revenue" and it's fairly common. For example, there are theatre productions that are funded by borrowing money using the revenue from ticket sales of other shows as collateral. Salomon Brothers's pretty much invented the mechanism by which banks can use the revenue from retail mortgages as tradeable assets.

    Basically, if you have a contract that lasts for a period of time and involves you making regular payments, it's unlikely that you'll find yourself abandoned if your vendor goes out of business. In addition, if you're a big customer, you can get clauses written into the contract to protect you, for example getting a copy of the source code of your application held in escrow by a law firm.

    In summary, this is something that's not new just because it's a software company doing it, and there are plenty of techniques available. IANAL.

  • You can make perfect copies at zero cost; therefore, the true economic worth is zero.

    Not true. The economic value of any piece of property that is used as a tool is the Net Present Value of the cash flow made possible by that item. This is often not what's charged for it, for example, a hammer costs the same whether you're putting up some shelves, or you're a professional full-time carpenter. I would say that renting tools is actually a *better* way of getting a true price than a one-off sale. The only problem is that you're moving it from capital to operational expenditure, but the accountants can worry about that.

    Maybe -- it's not clear why, other than some vague moral sense, you have a "right" to profit from your intellectual exertions.

    Because if you don't pay, you don't get, it's a simple as that. The true creators of economic value are far too smart to offer their product - ideas - to you at no cost, particularly if you intend to use those ideas to profit yourself.

  • "
    Despite what RMS or other free-software types belive, properitary pay-for-use software creates demand, will help fills important software niches.
    "

    Surely demand creates a market into which software can be sold or given away.

    How precisely does the existance of pay-for software increase demand more than free software?

  • I'll concede that this is the reality, but do _you_ concede that it's crazy?

    The dot-com situation was crazy, and look what happened to _that_. The thing with situations that are crazy is that they're not necessarily self-sustaining, they break down... particularly if you don't prop 'em up by proclaiming, "Hey, crazy as it is, this is the reality!". It may be more temporary than you think....

  • Hello? This has been the case for over 10 years. It's called Leased Software, and your license key/dongle/license server has an expiration date that you have to pay to renew each year, and if the company fails, you're SOL.

    The model usually applies to high-end packages like CAD/CAM/CAE software that cost $10k/year (or more). Software like ProEngineer(3d-solid CAD), WorkView (2D Schematic Capture), and Ansys (Thermal Modeling?), Saber (Analog Circuit Simulation), and etc. all use a time-bounded networked license scheme (FlexLM) to control the software.

    That's why, as part of your software evaluation, you should include a financial report on the company so you will have an idea of what type of risk you are in should they fail.

    This is no different.
  • And we used to buy used mainframe hard drives from a major used equipment vendor. The most fun part of receiving the new drives was looking to see what had been left unerased on the drives by the previous owner. We found railroad shipping manifests, parts databases, source code to scientific software, customer lists. Absolutely incredible stuff. Eventually, the vendor wised up and started clearing the drives before shipping them out.
  • " Anyway, he may not have had as much information as we do today, but he was still a smart gent. Just because some of the ideas are outdated doesn't mean they're all useless now."

    Of course not all of his ideas are useless. Most of his ideas however should be re-examined in the wake immense knowledge that has been gathered in the intervening decades.

The F-15 Eagle: If it's up, we'll shoot it down. If it's down, we'll blow it up. -- A McDonnel-Douglas ad from a few years ago

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