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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Richard Atkinson | Director, Worldwide Anti‐Piracy
Corporate Worldwide Anti‐Piracy: IntroductionDriving Adobe’s Comprehensive Approach to Grow Revenue & CCM through Conversion From Piracy
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Pure Pirates
13%
Tend Pirates34%
Tend Legitimate40%
PureLegitimate
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-ConsumersAll 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
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© 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)
Not
Con
side
red
Pira
cyC
onsi
dere
d Pi
racy
Debunking Misconceptions about our Software Pirate User Base
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© 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?
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© 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
$
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Alignment is Key to Achieving Our Goal
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EXTERNAL PARTNERSLeverage partners to curb piracy beyond Adobe’s reach:• Industry Organizations (BSA, etc)• Supply Chain & Ecosystem• Law Enforcement• Resellers/Distributors/Channel
PRODUCTReinforce piracy deterrents as well as add non pirate‐able product benefits: • Engineering/Architecture• Product Mgt/Features• Customer Experience/UI
CUSTOMER‐FACINGWork with internal teams to maximize customer satisfaction and conversion from pirate to legit:• License & Compliance• Field Sales• Channel• Customer Service
MARKETINGMarket benefits of legitimate software to drive conversion:• Pricing / Positioning• Research & Understanding• PR / Communications
ANTI‐PIRACYProvide 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 SECURITYDefine processes and influence legislation:• Litigation/Enforcement• Contracts/EULA’s• Government Affairs & Legislation• Action & Risk Management• Joint Investigations
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© 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
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Corporate WW Anti-Piracy Team
Strategy & LeadershipRichard Atkinson
Global Program Manager Mason Bacon
Business Intelligence Pingping Medley
Legal CoordinationDiana Olin
Investigations Michael Draper
Business AnalysisJonas Brueggemann
CommunicationsAnnick Mohageg-Baudot
EMEA Regional ManagerPhilippe Briere
J/APAC Regional ManagerRachel Fung
LTAM Regional ManagerTBD – final stage of interviews
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© 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
BusinessIntelligence
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Using Data to Understand Consumers and their Behavior
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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
BusinessIntelligence
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© 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
P2PLocker &
LinkAuctionB2C/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-TermTrial
BSA (WW)SIIA (N/A)
IACC Short-Term
TrialNone None
Appears Low
Appears High
Low to Moderate
TooEarly
Too Early
n/a n/a
Res
pons
es
Scale/Impact
Ability to significantly disrupt?
Current Approach
Effectiveness
OnlineEnforcement
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© 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)
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• 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.
OnlineEnforcement
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© 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
GlobalInvestigations
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Linking 3 Teams/Experience for Investigations & Resolution
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Worldwide Anti-Piracy
(abuse by our consumers)Corporate Legal
Fraud Investigations
(abuse by our employees)
Customer ServiceFraud Investigations
(abuse of Customer Service)
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Example: current OEM Investigation
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Futuresoft.com
Business and Individual Customers
GovernmentCustomers
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 PartnerOEM China Replication
Supply Chain
Pirate Counterfeit Ecosystem (wholesale)
Retail Ecosystem(some are Adobe APC Partners)
Being sold ~50% OffTo 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
GlobalInvestigations
Redacted
Redacted
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© 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
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Serial Number Analysis
Industry Associations
Internal Reporting
Test Purchases
Industry Partners
German Investigation
Law Enforcement
Cases
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© 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
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Data Analysis
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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
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
Current and Next Steps
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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
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 20
Questions?
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© 2012 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.