A client of mine approached me today and was interested in releasing a PHP based product, but didn't want his source code to be viewed, in plaintext, by the people purchasing it (mainly because competitors can could easily just purchase a copy and integrate his source code into their product). So, I researched the different options available to protect source code.

He includes his suggestions on "what doesn't work" (encoders that can be broken by sites like phprecovery.com) and "what works" - code obfuscation. His personal favorite in this department is POBS, a simple application that alters your code by changing function names/variable names and obscuring the code by modifying the structure of the code (adding/removing newlines, stripping spaces, etc).