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Microsoft (Nasdaq: MSFT) announced today that it will combat piracy of its flagship product by requiring Windows users to verify that their copy of the operating system is genuine in order to receive timely updates and security fixes. The new initiative, called Windows Genuine Advantage, will phase in beginning in February.
Microsoft believes the best way to fight software piracy is to make sure users recognize and receive all the benefits of genuine software. To that end, Windows Genuine Advantage will force users to prove their copy was obtained legally in order to receive Microsoft's promise of "greater reliability, faster access to updates, and richer user experiences" from Windows XP.
Billion-Dollar Losses
"Our goal is to help customers avoid the risks associated with counterfeit software, like viruses and other vulnerabilities," David Lazar, a director in Microsoft's Windows Client group, told the E-Commerce Times. "Windows Genuine Advantage will offer users greater reliability, faster access to updates and a richer Windows experience."
Windows Genuine Advantage is another weapon in the software giant's arsenal designed to tackle a software piracy epidemic that company executives estimate costs Microsoft billions of dollars a year.
According to the Business Software Alliance Global Software Piracy Study, 36 percent of the software installed on computers worldwide in 2003 was pirated. That translates to US$29 billion in losses to pirated software each year.
Windows Genuine Advantage was introduced as an optional pilot program to users of English-language versions of Windows in September 2004. Lazar said response to the pilot far exceeded the company's expectations, with more than 5 million people voluntarily taking part. Beginning on February 7, the program will expand to include 20 new language versions.
Global Expansion
Microsoft will present a legalization offer in three high-risk countries -- China, Norway and the Czech Republic -- for qualified participants who discover that they have been sold a counterfeit version of Windows XP. These customers will be offered a genuine version of Windows at a reduced price. Users in these countries will be required to pass the Genuine validation check in order to access Windows content.
By mid-2005, all visitors to the Microsoft Download Center and Windows Update will be required to pass the Genuine validation check. Lazar said Microsoft would still give users of pirated Windows software access to some updates, such as the most critical security patches, but they will be denied access to other Windows free software and discount services valued at more than $450.
"Validation is a short, easy process," Lazar said. "We download a small tool to your system that can read the product key. If you have already entered the product key as part of your Windows activation experience when you first started using the machine, then we recognize that and we automatically validate you. There will be no further requirement."
If users have not yet entered the product key, the number is requested. Microsoft then checks the number against known bad keys. If the key is valid, the validation is a one-time process. If the key is bad, access is denied.
Resellers Rejoice
Microsoft resellers are rejoicing over the software giant's initiatives to combat piracy, as many legitimate resellers have complained to the company about difficulty competing with artificially low prices offered by software counterfeiters.
"Software piracy is an enormous problem for honest system builders and resellers because it creates an unfair price advantage for distributors who sell their counterfeit products at artificially low prices," David Stinner, president of US item inc., said.
"The Windows Genuine Advantage Program will help us because it levels the playing field for honest channel partners, and because its added-value software offerings differentiate the genuine product we sell from the counterfeit products we compete with," Stinner said.
Positive ROI
Microsoft declined to disclose how much the company is spending on the Windows Genuine Advantage program, but Lazar said the return on investment is positive.
Can we expect to see the amount of piracy drop in coming years in light of anti-piracy initiatives like Windows Genuine Advantage?
"We would be happy if we could prevent piracy from increasing," Lazar said. "If this is successful, then I expect other software publishers to get on board with anti-piracy initiatives."
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