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Comment by 1388 | Hacker News Reader

Old methods (90s): - turn to the law (DCMA) - prevent people from modifying code

New methods: - change to a SaaS model - change the backend to an API, users order API key - ping home from your software code or every keystroke like in Windows. - free product, offer training + ads

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This is why there were no new software startups of any significance launched between 1995 (when web browsers made piracy trivial) and 2006 (when Salesforce.com launched the first modern SaaS business).

To the downvoter(s): I'm genuinely curious, can you name any significant software companies that launched during that era? I've not done an exhaustive search, but I've looked for them and have had a much harder time finding software companies with launch dates of 1996-2005 than <1995 or >2006 (the successful launch count in that window obviously wasn't zero but I'm pretty sure it's down significantly from the before and after eras).

Valve, Rockstar Games, PopCap?

Valve launched as a boxed-software company but quickly pivoted to being a server-based digital distribution company. Rockstar made most of their money in the console market where piracy rates remained far lower than the general PC market, precisely because the console manufacturers invested billions in custom hardware to try to keep the boxed-software business model viable there in ways it wasn't in the PC arena. And yeah, PopCap did incredibly well as a boxed-software/downloadable-software business but given the insane number of game studios that launched and died in that era (I spent ~10 years working in the game industry), I don't find a handful of game companies that did make it a convincing argument that the boxed-software business model survived unscathed after 1995. Pretty much everybody else was either going out of business or scrambling to turn themselves into server-based business models.

> To the downvoter(s): I'm genuinely curious, can you name any significant software companies that launched during that era? I've not done an exhaustive search, but I've looked for them and have had a much harder time finding software companies with launch dates of 1996-2005

Have you heard of Google or Facebook's origins? They were both in that window and pretty significant. Valve, LinkedIn and Netflix have also done okay...

Thanks these are great names to fold into the mix Google, Netflix, and LinkedIn are great tech companies but their presence on the list actually supports the idea that traditional software companies had a hard time launching during that window as two of them are server-based subscription products and the third is a server-based advertising product. Valve's a bit more complicated, largely because GabeN is a genius, but I think it's fair to say that their pivot from game company business model to server-based distribution company further backs up the argument that 1995 marks the end of the old school boxed-software/downloadable-software business model.

Google.

   change the backend to an API

What do you mean ?

Don't ship all the code to the client PC, run at least a small portion of the code on a server that you control. Doing this makes "cracking" your app useless because it still can't do the job without an account on the server for the server-side processing. This is basically what every MMO in existence did. MMO's are games that can only be played if you have a server-side account, because they took a chunk of code that historically would have been part of the normal game loop and moved it to the server where it can't be pirated. Yes, MMO's also enabled multi-player, but that could have been done a million ways that kept the core code on the end user's PC. The real advance was noticing that a server-subscription based MMO can print money while a non-server-based client-authoritative game architecture dies a rapid financial death due to piracy.

>The real advance was noticing that a server-subscription based MMO can print money while a non-server-based client-authoritative game architecture dies a rapid financial death due to piracy.

MMOs have more consistent cash flows than regular games which means the developers can work on content updates in the future. Regular games will have the majority of their sales within the first month then quickly taper off. This is unrelated to copyright infringement. In a peer to peer architecture cheating is a far bigger concern than copyright infringement.

By the way the reason why ingame transactions in freemium games work is because there is no spending limit which means a small rich minority of players ends up spending multiple thousand dollars on the game to compete with other players.

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