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Wired Magazine Issue 5.04 - April 1997.
Warez Wars
For the Inner Circle, cracking software is a challenge. For the wannabe underground, collecting it is an obsession. For the software industry, it's a billion-dollar nightmare.
By David McCandless
Sunday morning, 7 a.m., somewhere in US Eastern Standard Time: Mad Hatter gets up, has a glass of Seagram's Ginger Ale and a cigarette, and checks his machine, which has been running automated scripts all night. He looks for errors and then reads his e mail. He has 30 messages from all over the world: some fan mail, a couple of flames, a few snippets of interesting information, three or four requests - some clear, some PGP-encoded. After a quick espresso and another cigarette, he surveys the contents of a few private FTP sites, filters through a bunch of new files, and then reroutes the good stuff to his newsreader. After breakfast with the family, another wave of automated scripts kicks in. The ISDN connection hums to life. A steady stream of bytes departs his machine 128 Kbps and vanishes into the ether. By the end of the day Mad Hatter, a ringleader of the software piracy group called the Inner Circle, will have poured 300 Mbytes of illegal "warez" onto the Internet.
Monday morning, 9 a.m., Greenwich Mean Time: Phil arrives for work in Bracknell, England, in a suit and tie, just back from a few days in Switzerland. Inside Novell UK's glossy five-story headquarters, he lets himself into his office. It looks like a mad, bad bedroom - shiny desktops and derelict ones, disemboweled minitowers and battered servers, every last expansion slot distended with DAT machines, CD-ROM burners, extra hard drives. A metal shelf unit contains a rack of monitors, some video equipment, spare keyboards. Everything is wired insanely to a single ISDN line. After a coffee, Phil boots up and skims his email. Twenty minutes later he has ceased to be Phil. For the next week, he will pretend to be a trader, a courier, a cracker, a newbie, a lamer, a lurker, a leecher. He is an undercover Internet detective, a "technical investigator." He spends his days roving the Net, finding people like Mad Hatter - and busting them.
This is a story about a universe with two parallel, overlapping worlds. One is the familiar, dull world of the software industry, with its development costs, marketing teams, profit, and loss. Phil's world, at least part of the day.
And then there is warez world, the Mad Hatter's world, a strange place of IRC channels and Usenet groups, of thrills, prestige, and fear. A world of expert crackers who strip the protection from expensive new software and upload copies onto the Net within days of its release. A world of wannabes and collectors, whose hard drives are stuffed like stamp albums, with programs they'll never use. And a world of profit pirates, who do exactly what the software makers say: rip off other people's stuff and sell i t for their own benefit.
In Phil's world, software is a valuable tool that commands high prices - programs like QuarkXPress, Windows NT, and AutoCAD, costing thousands of dollars a shot. But in Mad Hatter's world, those sticker prices means nothing - except inasmuch as more expensive programs are harder to crack, and that makes them the most desirable, spectacular trophies of all.
In Phil's world, warez are a menace. In warez world, Phil is.
Filthy lucre
Phil's world is full of nasty numbers. Antipiracy organizations like the Software Publishers Association and Business Software Alliance estimate that more than US$5 million worth of software is cracked and uploaded daily to the Net, where anyone can download it free of charge. A running scoreboard on the BSA Web site charts the industry's losses to piracy: $482 a second, $28,900 a minute, $1.7 million an hour, $41.6 million a day, $291.5 million a week. A lot of that is garden-variety unlicensed copying and Far East-style counterfeiting. But an estimated one-third leaks out through warez world, which can be anywhere there's a computer, a phone, and a modem.
This is bad news for the business. Think of the lost revenue! The lost customers! "It's a frightening scenario out there," says Martin Smith, Novell's product-licensing manager for Europe, the Middle East, and Africa. "We are seeing a very, very rapid development of crime on the Internet."
He's not being paranoid: look at the thousands of messages that pour through alt.binaries.warez.ibm-pc and the other Usenet sites that are the warez world's pulsing heart. In a typical week, you'll see Microsoft Office Pro and Visual C++, Autodesk 3D Stud io MAX, SoftImage 3D, SoundForge, Cakewalk Pro Audio, WordPerfect, Adobe Photoshop 4.0 - virtually every high-end package in existence. All this plus impossibly early betas and alphas. Add a smattering of mundane Web tools, Net apps, registered shareware, games, and utilities, and you have everything for the forward-looking computer user.
Warez world's volumes are impressive, too - a good 65 Mbytes a day of freshly cracked, quality new releases, chopped into disk-sized portions (to make it from one hop to the next without clogging the servers), compressed, and uploaded. Postings can vary from a few bytes (for a crack) to hundreds of megabytes. The nine main warez sites alone account for 30 to 40 percent of the traffic on Usenet, an average of more than 500 Mbytes in downloads every 24 hours, according to OpNet.
Bad news indeed for Phil and his friends, gazing at those endless dollar signs. But warez world's leading citizens say that filthy lucre is beside the point - at least for them and the hungry collectors they supply.
"No money ever exchanges hands in our forum," says California Red, one of a half dozen of the Mad Hatter's Inner Circle colleagues gathered for an IRC chat.
"We're on the nonprofit side of the warez feeding chain," insists another, TAG (The Analog Guy).
"It's a trade. You give what you have, get something you need. No money needed," adds Clickety.
"We're not in it for the money. I would never sell something I got from warez," California Red reiterates.
"Never made a dime," says Mad Hatter.
Even Phil admits these are not the people responsible - not directly, anyhow - for the 500-Mbyte, $50 bundled software CD-ROMs from Asia that are the industry's most prominent nightmare. Warez crackers, traders, and collectors don't pirate software to make a living: they pirate software because they can. The more the manufacturers harden a product, with tricky serial numbers and anticopy systems, the more fun it becomes to break. Theft? No: it's a game, a pissing contest; a bunch of dicks and a ruler. It' s a hobby, an act of bloodless terrorism. It's "Fuck you, Microsoft." It's about having something the other guy doesn't. It's about telling him that you have something he doesn't and forcing him to trade something he has for something you don't.
In other words, it's an addiction. Listen to a typical dialog on an IRC warez trading channel:
"What you got?"
"Cubase three."
"What's that?"
"A music program."
"I got it. What else?"
"No, but it's Cubase three-oh-three - the latest bugfix."
"Shit. Gimme."
"It's not a patch. It's another seven meg download."
"Don't care. I want it."
Warez traders scour the newsgroups every night, planting requests, downloading file parts they don't need. Warezheads feel unfulfilled unless they've swelled their coffers by at least one application a day. They don't need this Java Development Kit tool, or that Photoshop plug-in - the thrill is in creating the new subdirectory and placing th