1. Introduction
  2. About computer software
    1. Software, what it is?
    2. How it is being created?
  3. Beginnings of commercial software market
    1. Bill Gates’ 1976 Open Letter to Hobbyists
    2. Current situation
  4. Pirated software
    1. How it works
    2. Risks, where it comes from?
    3. Real consequences
  5. Alternatives
    1. Freeware software
    2. Open Source software
  6. Conclusion
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Everybody use computers today, it would be rather difficult to find somebody who doesn’t have it and doesn’t need it. So computers became so essential thing that we basically cannot live in a modern society without it, as we need it so often, even for simplest things, like for example:

  • find quickly some good recipe to make a sweetie
  • write a letter to somebody, then print it
  • or just send it by email
  • communicate with people
  • exchange things with them
  • quickly find where some address is located on an electronic map
  • buy something online that isn’t available in local shops
  • read some news
  • check credit card balance

etc, the list can continue and it will be long, depending on a person, on his needs and knowledge.



So a PC today is without doubt an extremely useful thing to have, as lots of things can be done real quick with it than without. The PC economizes precious time, money, energy, it simplifies life and makes it easier, of course in case its owner knows how to use it 🙂

But are people aware about programs that are being run on their PC? That make it all reality.

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Few words about software

So, programs, what it actually is? First of all, it is those things that make of PC a useful thing. What would PC become without programs? Well, just pull out a hard disk from it and you will see whether pure hardware without software is useful or not.


So, what is software or programs?

It can be called a part of computer, a virtual, non-physical part of it, that cannot really be touched or felt directly. Basically a program is purely a set of instructions for the hardware, to perform this or that thing, useful for the human. Without those instructions, hardware becomes useless junk, as it will do nothing. You can turn it on, let some electricity flow into it, so that the hardware will be ready to do something useful. But if nobody tells it what exactly it should do… nothing will happen and you will only see a black screen 🙂 Because even to make appear some system or error message on it, you need a program for that!

So software part is absolutely essential for the PC to function and for the human to actually use that PC. A game like Solitaire is a program, a PDF viewer like Sumatra PDF is a program, email client like The Bat! is a program, even Windows itself is a program. A big and extremely complicated one.

A lot of people use all that richness with pleasure, without realizing how difficult it is to create it and how it is created at all and by whom.

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How one create software

Software creation is a long and difficult process, depending on its size, scale and purpose. People who create software are being called programmers or sometimes coders, as they write code in a programming language of their choice – those particular instructions for hardware to perform something useful for its owner.


Like for example, play video files. If you have a file with a video, then you need a dedicated software to watch it – a video player.

To create a complex decent software, programmers cannot just start by directly writing a code, they need a plan how they will write it. It’s like writing a general outline for your essay first and only then pass to particular writings – a concrete code. In big companies that do software development and that create complex large scale programs like Adobe Photoshop, there are teams of programmers that work behind their PC’s from morning till evening by doing nothing else than writing code.

There is an entire programmers’ hierarchy:

  • junior programmers
  • senior programmers
  • system analysts
  • lead programmers
  • systems architects


Each of them performs his dedicated particular task and by working altogether they create some big software that millions of people will use in their everyday lives.

Another profession that is tightly related to software development is software tester, it can also be called beta tester. His work is to test software freshly written by a programmer, to see if it contains any errors (glitches, often called BUGS), if it is optimized enough and performs good, if it is well written and suits perfectly needs of end user. A tester then reports that information to the author of that software, or its current developer and maintainer, so that he would be able to fix it and issue a newer version, with the only goal of improving its quality, so that end user could be 100% satisfied of using it.

Creating software isn’t easy task and never was. It is a hard work, people dedicate their time to create it, polish it and perfect it, so that we (end users) could be happy using it.

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Bill Gates’ 1976 Open Letter to Hobbyists

A small historical insight about how it all started. In faraway 70’s, when computers were still big and expensive, a concept of small, lightweight and affordable personal computer was yet to gain widespread use and recognition. It was at that time that first microcomputers started to appear, Altair 8800 being one of them.

In mid-’70s William Gates III, today a biggest figure in software industry and longtime richest man on the planet, was student at Harvard University, where he and his mate Paul Allen spent longtime, practicing and perfecting their programming skills on DEC PDP-10 – one of those early big machines called mainframe that only big companies and big educational institutions could afford. So in 1975 those 2 guys spotted a magazine article about Altair 8800 – one of the first successful microcomputers, initially created to be sold in hobbyist kits “assemble it yourself”.


The two then had an idea of being the first in creating a BASIC interpreter for this PC, so that users could write software in Basic – easy to use programming language, but they didn’t have that nice and small machine at Harvard, they only had access to a small-room sized DEC PDP-10. Ed Roberts from MITS, producer of Altair 8800 then received a letter from Traf-O-Data, asking him if he would be interested to buy their BASIC interpreter for his Altair computer.


That interested MITS boss and he called the company to ask for a software demo at MITS headquarters. Instead of Traf-O-Data, he reached a private home 🙂 In fact two young but perspicacious entrepreneurs sent that letter from Boston area and they had no Basic to offer. But Bill managed to implement their idea on PDP-10 very quickly, using Altair simulator made by Paul, running on PDP-10 – a program that simulates behavior of another PC, so that you could write and run programs for the simulated machine, even though you don’t actually have it. So one month later, after that phone call, Paul Allen flew to Albuquerque, New Mexico, to MITS, to test Bill’s software on an actual machine. Surprisingly enough, the software worked! Paul Allen was then offered a paid position “Director of Development” at MITS that he accepted, in his turn Bill Gates was awarded a “Software Specialist” position. At that time 20 years old Bill was still student at Harvard. MITS offered them both a contract, to sale bundled copy of their BASIC with the Altair 8800 microcomputer for some small price, while sold separately it costed way more to purchase. The two agreed, Bill then quitted his degree at Harvard, to work fulltime at their newly formed partnership that was spelled at that time as “Micro-Soft”.


It worked out well for both, Microsoft BASIC was a huge success among hobbyists, Bill and Paul had their royalties for each and every copy of their BASIC sold. Altair microcomputer enjoyed good sales, but sales of BASIC wasn’t that good. Meanwhile Gates hired a new developer, as he needed more resources to extend Microsoft product line.

Actually an early copy of BASIC interpreter had leaked into the community and was being widely “borrowed” = copied from one computer hobbyist to another. Bill was highly unhappy with that fact, so he wrote and published his famous open letter destined to those unfair people:


By William Henry Gates III
February 3, 1976

An Open Letter to Hobbyists

To me, the most critical thing in the hobby market right now is the lack of good software courses, books and software itself. Without good software and an owner who understands programming, a hobby computer is wasted. Will quality software be written for the hobby market?

Almost a year ago, Paul Allen and myself, expecting the hobby market to expand, hired Monte Davidoff and developed Altair BASIC. Though the initial work took only two months, the three of us have spent most of the last year documenting, improving and adding features to BASIC. Now we have 4K, 8K, EXTENDED, ROM and DISK BASIC. The value of the computer time we have used exceeds $40,000.

The feedback we have gotten from the hundreds of people who say they are using BASIC has all been positive. Two surprising things are apparent, however, 1) Most of these “users” never bought BASIC (less than 10% of all Altair owners have bought BASIC), and 2) The amount of royalties we have received from sales to hobbyists makes the time spent on Altair BASIC worth less than $2 an hour.

Why is this? As the majority of hobbyists must be aware, most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid?

Is this fair? One thing you don’t do by stealing software is get back at MITS for some problem you may have had. MITS doesn’t make money selling software. The royalty paid to us, the manual, the tape and the overhead make it a break-even operation. One thing you do do is prevent good software from being written. Who can afford to do professional work for nothing? What hobbyist can put 3-man years into programming, finding all bugs, documenting his product and distribute for free? The fact is, no one besides us has invested a lot of money in hobby software. We have written 6800 BASIC, and are writing 8080 APL and 6800 APL, but there is very little incentive to make this software available to hobbyists. Most directly, the thing you do is theft.

What about the guys who re-sell Altair BASIC, aren’t they making money on hobby software? Yes, but those who have been reported to us may lose in the end. They are the ones who give hobbyists a bad name, and should be kicked out of any club meeting they show up at.

I would appreciate letters from any one who wants to pay up, or has a suggestion or comment. Just write to me at 1180 Alvarado SE, #114, Albuquerque, New Mexico, 87108. Nothing would please me more than being able to hire ten programmers and deluge the hobby market with good software.

Bill Gates

General Partner, Micro-Soft

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Current situation

Things changed radically since the day Bill Gates published his letter. As of 2008, worldwide software industry is estimated to cost 303.8 billion USD, according to market researcher DataMonitor. Computers are became personal and gained mainstream worldwide recognition. Software is being successfully sold in shops and online, ordinary people who are far from IT, purchase and use it in their everyday lives.

Piracy though still exist and is unlikely to stop anytime soon. Software can be bought… or downloaded illegally and used at no cost. In some countries, like Ukraine, Vietnam, Russia, piracy flourishes, while elsewhere, like in Europe, people have more tendency to buy legitimate copies and reward manufacturers for their hard and valuable work, than to steal it like thieves, by downloading it from some not-so-trustworthy sites and using it for free, facing various risks.

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How is it possible?

Software manufacturers are not sleeping, they are fully aware about piracy and they know perfectly how much of their customers are legitimate and how much have “borrowed” and use their product for free. Various copy protection techniques were developed to prevent that. Moreover, virtually everybody’s computers today are connected, so software can seek for updates online and can also maintain connection with its manufacturer’s servers to check if it is legitimate, so they can block pirated copies of their programs from functioning.

Although for any lock there exist an unlock…

Some advanced software developers know how protection software functions, they follow advancements in that field, they looking at what’s happening there and they manage to issue newer versions of their cracks again and again, and there is no way to stop highly skilled individual from doing so, except maybe jail or fine. But laws differ from one country to another, so situation in juridical field about software piracy is very different in different parts of the world.

So how it actually works inside, how is it possible to bypass protection made by some software developer? Relatively easy for those who know how to create those protection methods.

Software companies often propose so called trial versions of their software to be downloaded for free, for demonstration and test purposes. For some time, often 30 days, anybody can use fully functional version, then it just stops to work and user needs to purchase a license to use it. When he pays online, he receives a so called serial number to enter in the program, then if it is valid, program is getting unblocked and user can continue using it.

Although it is always possible to research program’s internals to find out algorithms used to verify entered numbers and then write a so called valid serial number generator. People can find that generator in internet, it is often called a keygen, download it, launch it and use it to generate a serial number, that a software will accept as valid.

Protection schemes evolve with time, big complicated and expensive software use very sophisticated methods of protection, often few different methods are combined. For example, you have to identify yourself, register online, provide your personal details to software author, then and only then he will provide you with few unique credentials, generated using your details. Program will also verify online if you are in author’s database, and only registered people will be allowed to use that program, otherwise it will be blocked and it will refuse to function, until you will pay for it.

But there are always some rare and highly skilled individuals who are educated and clever enough to bypass even those sophisticated methods. Even if they are few, they still can write so called cracks, that others can download and use. That small program called “crack” will modify the program that user wants to “crack”, so that user will still be able to use for free, despite all efforts made by its author to prevent such a theft.

In a digital world any digital lock can be unlocked, so the only real way to stop piracy is to accept laws, and it was actually did in Germany, Spain, whereas in France a system of warnings was adopted – first time and second time the catched user is getting warned, and only for the third attempt to download paid content illegally, a legal action against him will follow.

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Risks of using pirated software

So why using pirated software on personal computer is a risky business?

First of all, you should know how to find it in internet, without risking of downloading some fake “crack” or “keygen” that is not really that but some virus instead. Experienced users know how to do so and can bypass bad fake sites and go directly to real sites that contain real cracking stuff they seek for, that actually works. But the vast majority of “normal” novice users simply do not know how to do that and are (happily) unlikely to learn it, unless somebody experienced will explain and will show them how to do so.

Then everybody who use pirated software, know that it is getting blocked regularly (as everybody are connected), and so that software can stop functioning at any moment. If it is some important software that user needs absolutely to do his work, like Word, Excel, Photoshop, some programming environment, other stuff or even Windows itself, then it would create a real problem, as user will be blocked from doing his work. In case it was an antivirus, then user will lose his protection and he will be exposed to all the risks of using his completely unprotected PC without even that basic protection that can lead to some real problems for the person that economized some 30 euros that cost legitimate antivirus software.

Advanced users can react to that by downloading some new cracks for that software, or simply by downloading precracked software and will still use it. But for novice it will turn out to be a real stress and even a nightmare, as he just cannot repair it all alone. Advanced users can actually prevent cracked software to ever use internet, but then they are getting stuck with that old version and they will never be able to download any updates for it. They can only find some new precracked version. If ever that version will stop working for one reason or another, then the story will be repeated again.

Use of pirated software can easily lead to some migraines and can quickly break your patience, so sometimes it is in fact simpler just to purchase it and then be calm using and enjoying it without being interrupted anymore.

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