IT channel partners are not amused by the coercive anti-piracy actions taken by Adobe against the customers. Many of the Adobe partners allege that the company and its representatives are not following the legal process in most of the compliance actions. Partners allege that the representatives from Adobe threaten customers and in many cases harass customers using genuine licenses.
Companies like Adobe, Microsoft, and Autodesk protect their intellectual property rights through Software Asset Management (SAM) audit programs conducted by their third-party agents like KPMG, PWC, and Deloitte.
Partners accept that while the use of unlicensed software has decreased slightly over the years, it is still a widespread problem. A recent 2018 survey report by BSA indicates that the rate of unlicensed software installation in India was 56 percent in 2017.
“High piracy rates don’t just delay the local economic benefits that are associated with thriving technology use; they impede growth in vendor’s bottom line and induce unprecedented security risks for the customers. However, vendors’ anti-piracy actions must comply with the law of the land. Adobe representatives are not following the processes in most of the cases,” shared Kavita Singhal, Director, Kamtron Systems.
“Many a time, customers are using genuine licenses; however, few employees may download or install a trial or pirated version of the software without the knowledge of the admin. This is quite prevalent in MSMEs as they don’t have adequate IT resources to check these actions. These set of customers are not wilful offenders and hence must not be harassed,” added Paresh Shah, Director, PH Teknow.
Partners allege that Adobe representatives don’t follow the legal process in most of the cases, enter illegally into the premises, and threaten customers.
Adobe didn’t respond for comments despite repeated emails.
Gross breakdown of processes
As per partners, the communication starts from an email about a SAM audit asking about the number of software licenses that customer uses. But then the tone turns threatening in nature and the company representative starts claiming whimsical figures of unlicensed software being used in the organization. Further, after a series of emails, a representative from Adobe visits and enters customer premises without any legal permission from the competent authority.
“Representatives from Adobe barge into customer premises without any permission from the competent authority and start auditing of the systems without taking consent of the customer. They threaten customers with dire consequences and force them to buy Adobe licenses (subscription). They literally act like hooligans,” detailed Harinder Salwan, Director, Tricom Multimedia.
Partners say that most of the software vendors including Adobe, Autodesk, and Microsoft have de-emphasized on legal enforcement-based license compliance over the last couple of years. According to the Delhi High Court website, Microsoft filed 48 cases in 2013, 8 in 2016, and just 2 cases in 2017. Autodesk and Adobe have registered around 21 cases since 2013. “Representatives from Adobe prefer to bypass the legal processes and litigations to save time and money. They find it convenient to avoid the legal processes,” informed Nilesh Kuvadia, Managing Director, ITCG Solutions.
Moreover, partners highlight many cases where representatives from Adobe harassed the customers who were using genuine software. “They often come up with flawed information and target genuine software users as well. Few of our customers offer services to the banks. Unless they have all genuine software, no bank will work with them. Yet, they keep receiving emails from Adobe representatives to engage in an audit for compliance, only on suspicion that the company used pirated software. This is sheer harassment of genuine customers,” elaborated Salwan of Tricom.
Many of the partners allege that Adobe representatives adopt ruthless tactics to harass their customers. “Many a time, they compel customers to buy more licenses than required. Adobe representatives threaten customers of blocking their access to the software and police action in case they don’t purchase the bloated number of licenses. Customers have to fall in line in order to avoid loss of reputation and business. This is criminal intimidation,” revealed a Delhi based Adobe dealer on condition of anonymity.
In addition, partners allege that Adobe abuses its dominant position in the market to arm-twist and harass customers into purchasing a bloated number of software licenses. As per partners, most of the Adobe software have no strong competition. “Seamless integration offered by Adobe digital, Web and content software makes it difficult for customers to move to the competition even with lucrative deals. Moreover, easy availability of resources, compatibility issues with the competition software and user-friendliness further restrict the movement of the customers. Adobe abuses its dominant position to bully the customers, as they have no choice,” detailed Vipul Datta, CEO, Futuresoft Solutions.
Partners allege that Adobe has made its coercive compliance actions into a business model where it is strategically more focused on anti-piracy actions.
“Adobe has made it a business practice to threaten customers to gain more business through their compliance actions. In fact, they have the compliance team bigger than their sales team. As per market estimates over 60 percent of their India revenues come from their compliance activities,” shared Salwan of Tricom.
With over half of the installed software are still unlicensed in India, this business model seems to be working quite well for Adobe. In fact, many of the partners are engaged in providing leads for the anti-piracy actions. “Few of our peers are involved to pass on the leads about their customers. However, in many of the cases, the activity back-fires for the partner as the customers don’t do subscription renewals through those partners,” said Shah of PH Teknow.
Partners highlight that while Adobe representatives forcibly sell licenses to the customers, the flip side is that the number of renewals goes drastically down.
Partners say that Adobe is creating more enemies than friends with this approach. “Representatives can threaten and force the customer one time but not every time. While the customer purchases a bloated number of licenses under pressure, they renew licenses based on real requirement only. In a recent instance, a customer had to buy 112 licenses but the renewal was just for 11 licenses,” explained Kuvadia of ITCG.
Moreover, the partners who pass on the leads to the vendor for short-term benefits end up losing long-term business. Partners add that customers who forcibly had to purchase the licenses either switch to the competition or definitely change the partner at the time of renewals.
Partners opined that any harassment of the customers should stop immediately and that partners must refrain from putting their customers in trouble. “Adobe must stop harassing customers with illegal audits and must not force customers to buy an increased number of licenses in any case. We have always averted inconvenience to our customers by educating them on genuine solutions as well as their legal rights. This approach has made us a trusted advisor among our customers,” suggested Datta of Futuresoft.