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Software Piracy Hits the Jackpot

Kim Hart

With all the debate swirling around intellectual property issues recently, I sat down last week with a local firm that specializes in protecting software from being hacked and pirated. Arxan, of Bethesda, is funded by the National Security Agency to secure all kinds of classified items like military warheads and other weapons.

Of course, there's also a booming demand on the commercial side now that software runs just about everything, from distributing the movies you rent to running the antilock brakes in your car. Just in terms of desktop applications, $40 billion worth of software was pirated in 2006. For every two dollars of software sold, one dollar is pirated, according to Amena Ali, chief marketing officer of Arxan.

The problem, she said, is how easy it's become to hack into software and re-engineer it in order to sell a knock-off product--which happens a lot outside the U.S. Hackers can simply go into the binary layers of software and unlock the mechanism in place to protect it, Ali said. Today, the company released a new product, called GuardIT, that acts like a "moving maze" for software protection. Small chunks of code are injected into the software code. At any given time, those chunks of code are changing the way they work, constantly thwarting hackers' attempts to break into the software.

The security industry is getting lots of attention from local venture capitalists as well, as the demand rises. Art Marks and Hooks Johnston, both parthers with Valhalla Partners, a venture capital firm in Vienna, told me that securing any kind of digital media and software from being pirated is a huge growth area for them.

In fact, just a few months ago, Arxan received its third round of funding worth $13 million.

By Kim Hart  |  May 21, 2007; 7:32 AM ET  | Category:  Kim Hart
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Please email us to report offensive comments.

This article is confusing reverse engineering with piracy. The most positive thing about web-based code like HTML and JavaScript is that someone writes something, makes it available for all to see, and then people can review that and write their own version of that. This is no different than the Washington Post making articles available online and students quoting and attributing these articles in a research paper. There is no difference. The idea that someone would want to have code constantly morphing inside an Adobe Flash application is bizarre in the extreme. There is no difference between that and the Post hiding phony, made-up interviews inside the newspaper in hopes of catching students who want to quote the Post in research papers. This product does nothing to thwart piracy. Knock-off software does not exist in the market today in the US- anything that violates a patent is a patent violation, not piracy. An IT expert, even a midlevel IT expert, would laugh at this article as I am now. It is riddled with mistakes.

Posted by: DCer | May 21, 2007 8:48 AM

What a load of rubbish! Somebody is pulling your leg. How does the legit owner register the program? With a constantly morphing key? You've been had.

What a programmer can do, another programmer can undo.

As I saw somewhere "There are cracks in everything, that's how the light gets in."

Life is a tragedy for those who feel, a comedy for those who think.

Have fun.

Posted by: Mike Flynn | May 23, 2007 9:04 AM

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