The Market Function of Piracy, by Jerry Kirkpatrick, professor of international business and marketing at California State Polytechnic University.
Prof. Kirkpatrick explains in his article how software piracy can have a positive effect on sales. He likens it to handing free samples to everyone, which is well known to be a costly yet highly effective marketing strategy, and argues that pirated software can serve as free advertising, since the cost of distribution is borne by the pirate, not the publisher.
One needn’t look very far to see the biggest “customer” of pirate distribution: Microsoft. Bill Gates once famously said “They’ll get addicted, and then we’ll collect”, and he was absolutely right. Even if a copy of Windows or MS Office is unlicensed, it is still better for Microsoft than to lose that user to a different platform or product. In a sense, unlicensed installations plug the holes where competitors’ products could have snuck in. Were it not for the hundreds of millions of pirated copies of Windows and Office, Microsoft would not be so dominant as it would have opened up a prime opportunity for free alternatives such as Linux and OpenOffice.
You could say that Microsoft dealt with software piracy by turning it into an advantage, rather than wasting huge sums of money and alienating potential customers with litigation. They adapted to their environment, something the music and film industries seem unable to do.