MACROVISION CORP (MVSN)

[kenco]

Macrovision Acquires InstallShield
June 24, 2004
By DRM Watch Staff



Macrovision announced last Wednesday its intention to acquire privately-held InstallShield Software Corp. for an initial cash payment of US $76 Million. InstallShield, as anyone who has installed third-party software on a PC knows, is the leading vendor of software installation utilities; it claims a customer base of 69,000 commercial software developers and an installed base of over half a billion desktops.

A good part of the strategic intent of this acquisition is to integrate the product activation and DRM capabilities of Macrovision's FLEXnet software license management platform (formerly called SafeCast, and used by such software vendors as Adobe, Intuit, and AutoDesk) with InstallShield's installer utility. This means that software developers will eventually be able to use the same utility to set user rights to software, and to implement business models such as try-before-you-buy, as they currently do to package software for release.

This integrated solution is highly analogous, for example, to e-book packaging solutions such as Adobe Content Server, which combine rights-setting functions with the publishing industry equivalent of what software developers call "release engineering." Thus this move by Macrovision seems like a no-brainer, and it has the potential to change the "DRM for software" paradigm from being somewhat peripheral to the software development process to being integral to it -- thereby making the commercial software industry a candidate for the next big vertical market for DRM.

Macrovision is viewing this acquisition in the context of its concept of "software value management," which essentially means control over the entire process of developing, releasing, protecting, distributing, and managing licenses to software. Macrovision's particular focus with its FLEXnet platform is on the market for software that gets distributed to large number of desktops at major corporations. The combined offering should make life easier for software license administrators at those companies as well as for software developers.

Contrast this with the vision of software DRM expressed in Digital River's recent DigitalPassport announcement, which focuses on embedding DRM functions into the distribution and business model aspects of software e-commerce. It's a common ploy in technology marketing to declare a new category and claim that you're the leader in it; the trick is to get the rest of the industry to buy into the validity of your buzzphrase. Although the industry hasn't yet settled on any particular end-to-end model for electronic software distribution, we now see it as more certain that DRM technology will be part of it.

http://www.drmwatch.com/drmtech/article.php/3373011