Ninety-nine percent of adult software consumers in the US have access to either a PC or laptop computer at home or work, 43% have a smartphone and 12% have an iPad or e-reader. These consumers are regularly downloading software or applications for these devices, but much of what they download is either free or costs less than $50. The maturity of open source software and the widespread availability of free smartphone applications have created choice for consumers who traditionally have paid for software. In fact, 46% of software owners have switched to a free version that they consider as good as their existing paid software when they were due to renew their subscription or pay for an upgrade. For software publishers this competition is making it more and more difcult to sell to new consumers and retain existing customers. Software publishers must improve their tactics for selling online and ensure that they are offering an online experience that parallels the high expectations that today’s savvy online shoppers expect. They face the same threats that the music and media industry have been forced to accept, that consumers value their products but are no longer prepared to pay for them. Software publishers and retailers alike must nd new ways of licensing their products that resonate with their consumers.