The man who can save Microsoft $2 Billion

In an exclusive interview, Windows User talks to Akhtar M. Zaidi, CEO, Zain Group, a man who believes he can banish software piracy, worldwide, within 12 months.

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By  Jon Westley Published  November 27, 2000

In an exclusive interview, Windows User talks to Akhtar M. Zaidi, CEO, Zain Group, a man who believes he can banish software piracy, worldwide, within 12 months.

"Think originally. Do not justify doing something because someone else is doing it. Come to me and justify why you want to do it because you want to."

So began a month-long series of exchanges with Akhtar M. Zaidi, CEO, Zain Group, a man who believes he can banish software piracy, worldwide, within 12 months.

Unfortunately, with a Non Disclosure Agreement on the table, the complexity and minutiae of Zaidi's solution cannot be fully detailed.

On the strength of what has been revealed to us, however, what Windows User can disclose is the world's first look at a solution that could save the software industry as a whole more than $200 billion dollars a year - and a technology that we wager will be purchased outright by Microsoft within 6 months.

And before you think that the idea can be copied, the NDA we signed is only the beginning of a complex business empire that stretches from the US, Jersey, Dubai Internet City and beyond - all designed to a single end - ensuring the safety of an invention with a value greater than a small oilfield.

Zaidi himself is one of those figures you rarely get to meet, a man famous on paper as the man behind the man behind the man - but as a result rarely in the public eye.

A Partner in Coopers & Lybrand more than twenty years ago in London, Tehran and New York, Zaidi's list of business accomplishments is formidable.

From being an advisor in the re-structuring of the Nigerian oil industry in 1979 and the man behind the divestiture of AT&T into today's Bell empire, to being the man who took the Saudi Arabian Dabbagh group to a multinational media empire in five years, Zaidi's accomplishments alone give weight to his boast that he will deliver "the first company in Dubai Internet City to launch on Nasdaq."

He has also invested $2 million of his own capital in the venture, a sizable percentage of his personal worth, to avoid any recourse to venture capital - and the need to share the profits of an IPO or buyout.

The Zain business model, in fact, covers three areas.

First, ZainSoft.com radically re-defines the concept of an ASP - offering vendors, large or small, a way to receive revenue from leasing their software to interested parties.

The novelty of the ZainSoft approach is that organisations such as Microsoft can rent software to companies to run internally as they would purchased software, rather than having to rent software situated remotely on monster servers.

The latter, traditional ASP model has been subject to criticism that few companies will be willing to trust a remote server with their data - or trust the vagaries of current Internet connections. The secret?

Simply stated, Zain has developed a unit of encrypted code, buried within the executable file (*.exe), that will only allow a program to run after exchanges with net-based and client based security mechanisms.

Further, the *.exe file generates a unique identity for individual clients, so that no copy of any software is identical - or can be made identical.

This is why the hub of the new "local" ASP model resides in the major anti-piracy component of Zaidi's invention - and distinguishing the anti-piracy and ASP components of Zain’s breakthrough is foolhardy

The second layer of the solution simply takes the piracy engine and builds a second-level "Trazer" rental monitoring system on top. In practice, the piracy engine enables any number of values to be distributed across the Internet (and within the client itself) to a rental logging system able to gauge anything from the duration to the number of uses of any given application on any individual's client.

The complexity of the rental and piracy engines underlying the system actually obscures the simple practice of what the solution delivers. In a nutshell, any individual or organisation will be able to buy, off the shelf, any application, and pay to an agreed formula for the privilege of using it.

The pricing variable will ultimately, of course, determine the value of the system to business and end-users. Nevertheless, in theory you will be able to go and pick up Microsoft Office off-the-shelf, and simply pay for it as you use it.

The Zain model does have drawbacks over the traditional ASP model.

First and foremost, ASPs were supposed to offer business a way to reduce MIS costs. Since all software would reside on a remote server, most users would require relatively 'thin' clients, requiring little, if no, support or upgrading.

As software versions evolve, any upgrades or maintenance would take place server side - removing the worry of downtime and future financial investment from business entirely.

However, remote applications have, as argued, been attacked for placing businesses at a higher than acceptable level of security risk.

Who exactly is going to trust a remote organisation, running a remote server, with mission-critical, or confidential data? Zain is gambling that business security fears about traditional ASP systems will drive people to its revised Zain ASP model (ZASP).

The ZainSoft model can be tested today.

Simply log on to www.zainsoft.com. At present the company offers one application, "TextTalk" for rental at US$ 0.0025 cents per minute - a sum set to prove the concept rather than deliver any revenue (ZainSoft give $10 usage free).

The site itself is in its infancy - so do not expect great organisation or style - that’s not the point. Zain agreed to allow access to the site on the basis of its showing the technology in operaton - expect something more polished shortly.

There are two actions to get up and running.

First, register to install the anti-piracy system and Trazer elements. Second, download msagent.exe, textalk.exe, tv_enua.exe and genie.exe to your machine.

The process takes about five minutes.

The ZainAccountManager.exe software is the heart of the machine, containing both the anti-piracy and Trazer rental elements.

Once installed, any number of Zain applications can be loaded onto your machine. TextTalk itself is a rather good text to speech word processor, rather along the lines of Creative's famous parrot software.

Its USP lies in its creation of ultra-secure, encrypted edoc documents. Again, however, the point here is the theory behind the application.

If there is a weakness in the approach, it lies in Zain's own description of its ASP model: "ZainSoft.com is a system for renting software via the Net using a distributed computing approach. It is mainly based on the basic client/server principle of TCP/IP.

"The client side of the system is a proprietary Zain software component (Trazer) that gets embedded in the software applications to be leased. The server side of the system consists of data collection servers, account leasing servers and accounts posting and reporting servers."

In other words, the whole system rests on TCP/IP and a relation to the Net. Until even twelve months ago, Zain's solution would certainly have been open to the charge of being before its time.

Today, however, the issue is rather more open - but a foolproof anti-piracy system requires that all software use the Zain system. Anything that does not will be pirated - and the prospect of only providing software to the connected is high risk.

The best way to understand the technology lies in examining what happens after you download the Zain Account Manager (ZAM) utility onto your Hard Disk Drive.

First, ZAM generates a unique ID. Note that every installation of ZAM will create a different ID according to the machine. However, your machine will always create the same ID.

Second, ZAM generates a unique encryption key for the PC. We cannot reveal the encryption, but it is of US military standards and, to the extent that any encryption can be, remains unbreakable.

Third, ZAM sets up a hidden storage area on the PC for account information.

Finally, ZAM creates an account information file in a number of locations, client side and remotely.

Each level is encrypted and, more significantly, all must tally to permit the software to operate. Effectively the system creates layers of encrypted software, local and remote, that multiply against each other to defend against hacking.

On an on-going basis, TRAZER updates each file. Data transferred remotely includes Account number, PC account number, Application Number, Vendor Number, Start Date and Time variables and Unit Rate/ Billing.

All local copies must be synchronised for the software to operate - and all must conform to the remote log. The remote system remains under NDA, and cannot be revealed.

For the user the experience is not differentiated from outright purchase. The technology is hidden - in fact it becomes transparent only at the time of payment.

The system works with any ZAM compliant software, and the customer effectively owns the software because it resides, and executes, on the PC.

Zain's solution has a double anti-piracy system that may just prove its most attractive feature to vendors. Working from the principle that you cannot stop people copying data, Zain openly encourages a system in which everyone copies their CDs.

Why? Because in copying you convert a pirated CD into positive piracy. There is no escape from the Zain system because the executable is embedded in every version of the software.

Zain's system poses problems for the traditional ASP market hardware vendors, betting on increasing revenues from the so-called UNIX supercomputers.

By reversing the model that would have seen software accessed simultaneously by thousands of users to one in which software stays within the typical client-server business model, companies like Sun, IBM, HP and Compaq could be in trouble.

Of all the vendors Sun, with 32% of the global market, could be the worst hit, with its increasing domination of Net infrastructure.

But IBM, Hewlett-Packard and Compaq have been placing considerable resources, R&D, sales and marketing, behind winning business in the highest margin, $6.6 billion sector of hardware (at this level solutions is a better description than hardware) based IT.

In fact, this is the second reason why purchase of Zain's system by Microsoft makes more than a little sense - the Zain system returns the guns to Microsoft Windows and Intel hardware.

HP's new SuperDome could be the biggest casualty, as arguably it is HP that has most to lose with its $1.7 billion, 26% global market share.

Whether IBM's S80 Condor, Sun's older StarFire, HP's SuperDome or Compaq's GS WildFire system wins out in market share, is certainly going to resolve itself in a much more bloody fashion if the client-server model re-gains its lost advantage.

Microsoft is the clear target for Zain, though it refuses to admit this.

With more than $2 billion lost annually to piracy, the Zain solution offers the software giant a real way to control piracy for the first time.

You, however, are reading about the system before Microsoft - and it is not difficult to guess that Zain is looking for the giant to approach it first.

Whoever buys the software, however, buys a new model of ASP - something that will be of interest to organisations ranging from Internet Service Providers (ISPs) to SOHO and Enterprise business.

With it, the new owners have the ability to offer, safely, a fundamental choice to purchasers between buying and renting and, in so doing, fundamentally transform the software sales and marketing business model.

We asked Zaidi about the origins of the idea - but he was typically evasive: "What I can say is that the traditional ASP model is dead. There are too many complications, the infrastructure and bandwidth ask more questions than they answer; there is no security of data, or at the least, a perception that there is no security and it's expensive.

"Ask yourself too, whether any serious organisation is going to risk dismantling their IT departments and infrastructure. We needed an alternative to the ASP model - and our Trazer is the answer."

The simplicity of Zaidi's solution, essentially a C++ component that so seamlessly integrates into an *.exe file as to disappear, a networked encryption and hashing system and a web site, creates a system that, if hacked, instantly re-builds itself.

By building in the limited option for the purchaser (or pirate) to buy or rent, the benefit becomes tangible from day one.

So what is the future of the system?

Given the prevalence of piracy worldwide, it is not pessimistic to believe that the piracy war is currently being fought on the basis of any number of 1% solutions - hardly a credible way to deal with a $100 billion dollar black economy.

Even the most sophisticated solutions, such as those which embed codes in individual processors, have failed. Windows 2000, for example, includes a little known system able to report pirated copies - but it will only function outside a firewall.

Zaidi best captures the essence of the new model when he describes it as transforming the software purchasing culture into the prepaid mobile phone culture.

Whether it really “is bigger than Yahoo”, or whether Zain will “be the first company out of DIC to go NASDAQ...", as Zaidi claims, remains to be seen. We do have concerns that, in the US at least, the model will be attacked as a threat to the right to privacy.

However, the access to user information required by the system is limited - and certainly no more than that demanded by peer-to-peer applications such as Napster.

Zain’s current work on a stand-alone, non-connected version of the product will allay our second concern that it requires software companies to license only networked versions of software to produce 100% protection against piracy.

On balance though, given Zaidi's background, the brilliance of the concept and the models we have seen working in the Labs - it may just be that not only will Zaidi be the first to NASDAQ but also, more significantly, will earn a place for the Middle East in the history books of IT as the man who solved piracy for good.

Now that really would be something.

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