Optimal time-locked trial strategy for software in the presence of piracy

Time-locked trial is one of the commonly used marketing strategies in the commercial software industry. After the trial, one problem facing software companies is possible pirates by users. A model is proposed to study how a monopolistic software supplier should respond to different pirating conditions by use of a time-locked trial strategy. The conditions are determined under which a trial strategy is optimal and was fund that if there is piracy, when the customer’s basic perception about the quality of the software is moderate, in the whole piracy region it is better for the company to offer trial while when the basic belief is relatively high or low, the company does not provide trial period unless the piracy cost is relatively tiny. It was also fund that the optimal trial period length decreases with the piracy cost when there is piracy, while the trend is reversed when there is only a threat of piracy. The optimal price increases with the cost of piracy when there is piracy or the threat of it. Versioning strategy and time-locked trial strategy were compared in the presence of piracy and it was fund that the latter is more applicable to enhancing profit. Reasons for these results and some managerial implications are given.