Microsoft Shackles Unlicensed Windows

Microsoft has launched a new offensive against software piracy that will expand its Windows Genuine Advantage program.

The change is designed to provide a system of incentives and disincentives: Customers with valid Windows licenses will receive perks such as rebates and bonus downloads, while users who have improperly licensed copies of Windows are blocked from Windows Update and the Download Center.

Microsoft will, however, continue to distribute critical updates to non-genuine Windows users through its Automatic Update service - but it's not clear for how long.

Microsoft initiated an opt-in pilot of the program at the Microsoft Download Center in September, which required customers to validate their Windows product keys in return for access to featured downloads. According to Microsoft, the opt-in rate far exceeded its expectations, with nearly 61 percent or five million users participating.

The next phase of the program, which will begin February 7, 2005, carries more than $450 USD worth of offers including trial software, discounts for the MSN Games Zone and Office Outlook Live, Winter Fun Pack 2004, and much more. Offers will be localized outside of the United States, and the program will include 20 additional languages.

Windows Genuine Advantage will continue to be opt-in in most markets with the exception of the People's Republic of China, Norway and the Czech Republic where the program has already progressed beyond the pilot phase. Customers who discover they have been sold a counterfeit version of Windows will be given the opportunity to purchase the software at a reduced price.

Participation will become mandatory in the United States by the second half of 2005. In a telephone interview with BetaNews, David Lazar, Director for Genuine Windows, explained that the goal of the pilot is to gauge how customers might react.

Inevitably there will be negative response, Microsoft admits, especially from customers who purchase computers from an unscrupulous reseller.

"Microsoft is trying to solve two problems with Windows Genuine Advantage. The first is to show added value to legitimate Windows customers. The second is to curb piracy, particularly among system builders selling more computers with Windows than what they have paid for," Jupiter Research senior analyst Joe Wilcox told BetaNews.

"Microsoft is trying to take more of a carrot than stick approach by offering customers freebies and other incentives to validate their software. But those customers with invalid software may find themselves in the unpleasant position of having been ripped and paying yet again."

A Redmond spokesperson responded to those concerns, saying, "Microsoft certainly does not feel that end-users should be put in that position by an unscrupulous value-added reseller. Therefore, we're offering a number of ways to help out end-users."

Some of those methods include increased customer education on how to recognize genuine copies of Windows, enabling Automatic Update, filing claims at the Report Piracy Now Web site, as well as product exchange programs for specified language versions.

A July 2004 IDC piracy study -- commissioned by the Business Software Alliance -- found that approximately 36 percent of software is pirated. Out of an estimated $80 billion USD of software that was installed last year worldwide, only $50 billion USD was purchased.

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