By Susan Marks
Network World, 02/18/02

DRM at work   The downsides of   DRM   DRM directives   A stew of DRM   standards

A computer servicing company develops a piece of limited-use software with built-in expiration dates. To discourage software piracy, buyers must agree upfront not to copy the program. After the software expires, a government agency comes looking for an updated version - only to find that it had a bootlegged copy in the first place! The software developer never finds the copying culprit nor determines how many illegal copies of its intellectual property were distributed.

How to sell or share digital content while preventing its unauthorized use or redistribution is one of the biggest challenges e-commerce managers face today. Every year the software industry alone loses $11 billion as the result of piracy, says Patrick Mellody, spokesman for the Business Software Alliance, an international nonprofit organization in Washington, D.C.

Digital content can be a small piece of software, an operating system for an e-marketplace, an e-book, music, proprietary business data shared among strategic partners and more. Like offline content, digital information has associated rights or permissions and royalties with which network executives must deal.

Any company that consumes anything digitally should methodically deal with digital rights management (DRM), says Mike McGuire, an analyst with GartnerG2. Enter DRM software, which aims to systematically control digital content distribution. "If it's on your network, and it's your property or someone else's, you're going to be dealing with digital rights management software," he says.

Yet analysts and users are not in agreement as to whether DRM software is worth the high price most vendors charge, or even how effective it is.

DRM at work

The case for DRM software is that it can apply adjustable levels of rights to a piece of content - giving some recipients rights to manipulate content, letting others only view it or blocking access entirely.

DRM network server software wraps the digital content. DRM client software unwraps it or otherwise makes it accessible in accordance with its rights. Potential clients include desktop PCs, handhelds, set-top boxes, mobile phones and other portable devices. Good DRM software has little effect on the network and is generally invisible to the user, says Mark Ashida, COO of InterTrust Technologies, a DRM provider.

At interactive entertainment giant Nintendo of America, DRM software from Alchemedia Technologies protects proprietary and sensitive material on the company intranet. The Mirage server intercepts and encrypts designated documents or sections of documents. The Mirage client decrypts and displays the protected document, but the recipient cannot copy, save, print, e-mail or perform a screen capture unless authorized to do so, says Daniel Schreiber, CEO of Alchemedia. The document is decrypted to be viewable but otherwise remains encrypted, even in RAM, he explains.

At Off Wall Street Consulting Group, a Cambridge, Mass., company that provides research to professional money managers, DRM software controls access to an online subscription-based service that starts at $50,000 per year. Using PageRecall software from Authentica, the firm can secure the page views of its data. Subscribers must provide a user name and password to gain access to protected documents. Once the content is delivered, viewing and data sharing rights remain in force, but can be changed throughout the content's life cycle.

DRM is not cheap, but worth it, contends Mark Roberts, director of research at the firm. He says Off Wall Street paid thousands for its DRM package. "If you have a high value-added product [like ours] that can be moved around, by limiting people's ability to access it, you force unauthorized users to sign up and pay. I am convinced that we have had that happen," he says.

Pricing for PageRecall starts at $17,500, while Mirage's starting cost is $45,000 for 100 user licenses. But these generalized prices don't factor in costs associated with installation or the discounts vendors commonly offer when bidding against each other. Overall, system pricing among vendors is similar, says Jim Hickey, vice president of marketing at Authentica.

The downsides of DRM

Other network executives disagree on the worth of expensive DRM systems, especially when used with legacy systems. DRM can require major upgrades to older systems, and its effectiveness remains largely unproven. Such was the conclusion of Mike Hager, vice president of network security and disaster recovery at mutual funds giant Oppenheimer Funds in Englewood, Colo. He looked into DRM for Web-based authentication, but determined the products are not cost-effective enough at this point to justify network implementation, he says. Instead, Oppenheimer relies on overlapping security systems that include limiting entry and controlling access to data.

And not all analysts are as enthusiastic about DRM as GartnerG2's McGuire. Current DRM technologies are solutions looking for problems to solve, says Eric Scheirer, an analyst with Forrester Research. "I certainly have not seen any application for which I think DRM is warranted compared with a much more straightforward and cheaper-to-implement security solution [such as authentication]."

Marks is a freelance writer in Denver. She can be reached at sjmarksco@aol.com.

Related links

Digital rights management directives
Experts share tips on how to make the DRM decision and deploy the technology.

A stew of DRM standards

Let's do IT with a dongle
Columnist Mark Gibbs thinks dongles are the answer to stopping software piracy.
Network World, 1/21/02.

Is your software properly licensed?
Columnist Linda Musthaler on the importance of adhering to software licensing laws and effectively managing the software your company uses.
Network World, 1/14/02.

BSA grants software pirates one-month amnesty
The Business Software Alliance is offering corporate software pirates in seven U.S. areas a chance to start the new year on the right side of the law, offering a one-month grace period for companies to acquire necessary licenses without facing infringement penalties.
IDG News Service, 01/04/02.

Business Software Alliance

Digital Owl

InterTrust Technologies Corp.

OASIS

Alchemedia

Authentica

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