Bundling of Software Products and Services to Fight against Piracy

Bundling has been a widely used selling strategy in the software industry. In terms of fighting against software piracy, the bundling of software applications that are prone to different levels of piracy has been proposed as a way to minimize the negative impact due to software piracy. Until recently, software implementations have mostly been at the client’s end, which requires a variety of antipiracy strategies. With the emergence of software as a service model, software implementations move to the server’s end, which gives the software vendor greater flexibility to curb software piracy. In this paper, we analyze software piracy issues where a monopolist software vendor has the option to bundle software as a product and/or a service. Our study yields some interesting managerial perspectives to this newly emerging phenomenon.