Article re piracy

This is very interesting and really is both a positive (in that everyone is using it) and a negative (in that it is hard to make them pay...have a read:

http://www.copyright link/technolog...racy-in-china-to-drive-growth-20170221-guhs8n

For ASX-listed printed circuit board design software company Altium, its big problem in China is not one of brand recognition, or even user growth – it's trying to make customers pay for its software.
The company is the recognised in the Chinese market as the dominant player in electronic circuit board design, but 90 per cent of its 100,000 users still use its software illegally thanks to piracy. About 28,000 of these users already have their hands on the latest 2017 version of the software, while only 700 are paying for it.
But the company, which on Tuesday reported revenue growth 14 per cent to $US48.7 million for the first half of the 2017 financial year, believes it can make 2000 of these customers illegally using its software start paying each year – double the current number it manages to track down and convert to paid subscribers.
Altium chief executive Aram Mirkazemi told The Australian Financial Review the trick to this was to change its licence compliance processs and bring it in-house, rather than relying on resellers in China.

"Since 2004 we've been converting around 1000 users a year to paying customers ... When we talk to engineers in China, they say they have to be able to use Altium software to work in the industry," he said.

"We used to have to get the resellers to negotiate with a customer when they were identified as using the software without paying us and get them to send letters prompting them to be legal users. But now in the first half of 2017 we've made a breakthrough in how this process is managed and now we can pursue the customer and close the deals."
Already this strategy is starting to pay off – the region is delivering the strongest growth for the company in the first half, with revenue up 27 per cent.
For the first half the business also reported a profit jump of 8 per cent to $US9.86 million and earnings before interest, tax, depreciation and amortisation of $US12.55 million, a jump of 18 per cent, and an EBITDA margin of 25.8 per cent.
The results on paper appeared to miss analyst expectations by more than 10 per cent. Shares fell more than 5 per cent.

Bell Potter analyst Chris Savage had predicted the company's results would be much stronger, with Altium missing his predictions by 25 per cent for net profit and 14 per cent for revenue. As a result, Bell Potter is reviewing its $7.70 12-month price target and hold recommendation.
The company also missed Baillieu Holst and UBS' forecasts.
But Mr Mirkazemi said this was partly because the company only provided statutory numbers, believing this gave a clearer picture of the underlying numbers in the business, in contrast to most other major companies which provide pro forma, or operating figures, which analysts often taken into account.
"We didn't actually miss expectations, but Altium reports its numbers in a way analysts aren't used to. We talk about our reported figures, we don't talk about anything else and we don't capitalise the research and development costs or one-offs," he said.

"Analysts can miss the one-offs because they don't work inside the company, but my philosophy is that Altium creates a simple to understand, use and access product, so we can't then have complications around our numbers."
For the full-year Altium committed to exceeding its $100 million revenue goal, with an EBITDA margin of 30 per cent and by 2020 the company intends to reach $200 million in revenue.
To drive this growth Altium signalled acquisitions and product development as key drivers, along with its partnership with Dassault Systemes Solidworks.
Mr Mirkazemi said the company would look to make acquisitions that would enable it to build out its software in the coming years to also incorporate electronics product design.

"We currently do the electronics component, and we're known for that, but we require another two or three missing pieces for product design, and that's going to be the focus of our M&A activity," he said.


Read more: http://www.copyright link/technology/altium-tackling-software-piracy-in-china-to-drive-growth-20170221-guhs8n#ixzz4ZNtkGHNG
Follow us: @FinancialReview on Twitter | financialreview on Facebook