Some software companies quietly tolerated piracy, figuring that the more their software spread—even illegally—the more legitimate sales would follow in the long run. The argument was that if students and hobbyists pirated the software, it would lead to business sales when those people entered the workforce. The catchphrase here was “piracy is cheaper than marketing.” This was never an official position, but piracy was often quietly tolerated.
In the end, the version release system led to peaks and valleys in revenue, as well as a bit of, ahem, sleight of hand with the definition of “sold.” Was the software sold the second it left the warehouse, headed to a retailer? Or when the customer paid for it at the register? It became common to “pump the channel” with boxes late in a financial quarter, then return the software after the first of the month, next quarter’s numbers notwithstanding. The dreaded Sarbanes-Oxley Act was motivated in small part by this practice.
The true value of software
Of course, the real value wasn’t in the physical products shipped, but in the actual bits and bytes that ended up in the memory of the computer. I remember a Usenet discussion (OK, argument) with a guy who complained that he had spent $299 and all he got were three lousy floppy discs. He remained unconvinced.
