Report Finds Rise in Blocked Electronic Software Downloads to Banned Countries, Increasing Risk of Export Restriction Violations for Software Producers
Schaumburg, IL - Mar 21, 2011 - Flexera Software, the leading provider of strategic Application Usage Management solutions for application producers and their customers, today announced the launch of the Application Usage Management Benchmarking Report, which highlights trends in the software and high-tech device industry. The first report in an ongoing series, released today, found that between 2007 and 2010, blocked software downloads rose to three times their pre-2007 rate, at approximately three blocked downloads per 1,000 by the end of 2008. The findings underscore a growing need for effective compliance safeguards as software and high-tech device producers export technology to foreign markets, lest they be ensnared in the Department of Commerce's Export Administration Regulations.
The Department of Commerce's Bureau of Industry and Security protects U.S. national security, homeland security, foreign policy and economic interests by enforcing U.S. export controls of dual-use goods and technology, including software and high-tech devices, which can be used for both legitimate and nefarious purposes, such as to support terrorism. Exporting certain types of software and high-tech devices to certain Asian countries, including China, Pakistan and North Korea, can lead to a loss of export trade privileges, civil penalties in the millions of dollars, or even criminal charges.
Key Report Findings
- Between 2007 and 2010, software sales in Asia rose steadily. Asian countries accounted for 10 percent of software downloads in the first quarter of 2007. Asian exports increased to 15 percent by the end of 2010.
- During 2007 and 2008, blocked software downloads in Asia rose sharply to three times their pre-2007 rate, at approximately three blocked downloads per 1,000 by the end of 2008.
- Starting in 2009, the number of blocked downloads stabilized to around one blocked download per 1,000. This stabilization is likely due to the software vendors' use of data from FlexNet Delivery On-Demand to cleanse their order entry systems of problematic end customers, among other factors.
"The reduction of blocked downloads worldwide suggests that software powerhouses are beginning to understand the importance of automating entitlement management and compliance," said Laurie Wurster, research director at Gartner Inc. "Companies that take steps now to automate their international compliance management will be well positioned to capture market share while minimizing export compliance risks."
"With software so easy to access electronically from restricted countries, the odds are good that software providers and high-tech device manufacturers will eventually run afoul of the law," said Bashyam Anant, director of product management at Flexera Software. "It's up to producers to police themselves with reliable, automated tools to stay in compliance."
About The Application Usage Management Benchmarking Report
Flexera Software's Application Usage Management Benchmarking Report provides insights on the global software industry and the evolving use of increasingly strategic applications. It analyzes anonymized data collected through FlexNet Delivery On-Demand, Flexera Software's on-demand electronic software delivery platform, to gain insights into global application usage trends. Flexera Software's licensing, compliance and entitlement management solutions are used by thousands of software producers and high-tech device manufacturers around the world to deliver software and software updates to millions of customers and to manage software subscriptions and entitlements. They support new revenue models easily and efficiently while streamlining and automating complex back-office processes.
The software producers and high-tech device manufacturers that deploy Flexera Software's licensing, compliance and entitlement management solutions are responsible for more than $50 billion in annual software sales, and deliver their products to more than 3.5 million customers around the world. Our solutions are embedded in more than 20,000 software and high-tech device applications. With such a broad base of activity and corresponding transactional data captured by our systems, Flexera Software is in a unique position to identify and report on larger compliance and entitlement management trends of importance to market players and market watchers.
- Read the full Benchmarking Report on Flexera Software's Entitlement & Compliance Management Blog.
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Flexera is reimagining the way software is bought, sold, managed and secured. We view the software industry as a supply chain, and make the business of buying and selling software more transparent, secure, and effective. Our Monetization and Security solutions help software sellers transform their business models, grow recurring revenues and minimize open source risk. Our Vulnerability and Software Asset Management (SAM) solutions strip waste and unpredictability out of buying applications, helping companies purchase only the software and cloud services they need, manage what they have, and reduce license compliance and security risk. In business for 30+ years, our 1000+ employees are passionate about helping our 80,000+ customers generate millions in ROI every year. Visit us at www.flexera.com.
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