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Microsoft to Tighten Anti-Piracy Noose in Vista

In response to "overly optimistic" sales forecasts for its Vista operating system, Microsoft Corp. plans to "dial up" the anti-piracy technology built into this latest version of Windows. No doubt this move will boost Microsoft's sales to some degree, but if previous experience with Microsoft's anti-piracy methods in Windows XP is any indicator, this new effort is just as likely to alienate or anger many legitimate users.

CEO Steve Ballmer revealed the anti-piracy plans in a conference call with Wall Street financial analysts last week, according to this Computerworld article. "'One way Microsoft can bump up Windows sales is to tighten the screws on pirates,' Ballmer said. "Piracy reduction can be a source of Windows revenue growth, and I think we'll make some piracy improvements this year."

The Computerworld story says the expansion of the Windows Genuine Advantage plan is part of an effort to squeeze more revenue from China, India, Brazil, Russia and other emerging markets.

Online PC help forums are littered with reports from legitimate Windows users who have been errantly flagged as software pirates by Microsoft, so here's hoping that the company can iron out some of the kinks in its anti-piracy detection and reporting technology.

This story caught my eye because I recently asked Microsoft for estimates on how much it spends on Internet bandwidth and other resources shipping security patches to millions of computers running pirated copies of Windows. To its credit, the company will ship security updates even to those computers that it knows for a fact are running pirated copies. To deny those machines patches would drastically exacerbate all of the attendant problems that come from running Windows without the latest updates (think spam zombies and hosts for malicious software, child pornography, etc.)

Microsoft declined to share its best guess, instead referring me to piracy cost estimates from the Business Software Alliance, which said companies lost about $34 billion in potential revenue from piracy in 2005.

One fact about piracy that's always amazed me is that it extends even into anti-virus software and other programs designed to protect computers. To me, the idea of going to a software "crackz" site to download a license key generator or some "patch" that might let me use anti-virus software for free seems laughable, but many millions of PC users apparently don't see any problem with this approach (these software piracy forums are legendary for installing malware on machines whose users visit the sites without the benefit of anti-virus software and firewall software, as well as the latest security updates from Microsoft.)

Earlier this month while out at the RSA Security conference in San Francisco, I had the opportunity to sit down with Eugene Kaspersky, head of anti-virus research at Kaspersky Lab. He told me a very interesting story about how an anti-piracy effort at Kaspersky netted the company a huge windfall in sales.

The company was seeing millions and millions of computers running pirated copies of its software, most of them in the Asia Pacific region and in Eastern Europe. The problem with multiple users running anti-virus software with the same license key, Kaspersky said, is that it is sometimes unclear which user is the legitimate one. So the company decided to cut off updates to just the top two most-used, pirated Kaspersky Anti-Virus license keys. In so doing, it shut off updates to more than 3.5 million computers. At $50 per license, the company had just cut off $175 million worth of software freeloaders.

Amazingly enough, Kaspersky's move paid off handsomely: many of those freeloaders decided it was time to legitimately purchase the software they'd been stealing. "The result was that our sales increased between four to five times worldwide for about two weeks after that," Kaspersky said. "Our sales guys were so happy, and the sales manager ... his smile is so huge now that it doesn't fit into his office."

By Brian Krebs  |  February 20, 2007; 1:37 PM ET
Categories:  From the Bunker , Piracy  
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Comments

I have never understood why people get sucked into buy anti virus software. All my PC buddies I tell to go get AVG free . It sure does the job and for every home user it's great. I am staying away from Vista and am glad I bought an OSX system. All this DRM stuff is looking a little scary the more i read about it. and know that WGA that MS users have to use last year MS stated that 22% of all positives the system found where false. There must have been an awful lot of very annoyed genuine users out there!

Posted by: shane blyth | February 20, 2007 5:23 PM | Report abuse

as Shane said. If you don't like to pay for software, there is plenty of free software. Think Linux, OpenOffice, AVG and the free AV software you can download from AOL (turns out to be Kaspersky).

By using unlicensed MSFT software you just strengthen their monopoly and make it easier for web sites and other software to ignore free alertnatives like Linux.

Posted by: mike post | February 20, 2007 6:31 PM | Report abuse

@shane,@mike

Agree with you both. Also, I think M$ are panicking: their $$$ aren't what they used to be, they're losing ground (and prestige) and this is how they react.

Posted by: Rick | February 20, 2007 7:11 PM | Report abuse

Free AVs cant match up with paid ones like Kaspersky. There are plenty of reviews out in the web, check them.

Example : http://www.virus.gr/english/fullxml/default.asp?id=82&mnu=82 (99.62% vs 82.82%)


If you want free AV, get the one provided by AOL. Its kaspersky with a lesser no. of features.

Posted by: Pallab | February 21, 2007 3:58 AM | Report abuse

Clarification: The "overly optimistic sales forecasts" you mention were made by stock analysts, not by Microsoft.

I haven't had any problems with Windows Genuine Advantage. In fact, WGA was nice enough to nag me to update to WinXP SP2, which I did.

Posted by: JohnJ | February 21, 2007 9:24 AM | Report abuse

Over here in the UK, Windows Vista is twice the price of the same software in the USA - is this, in its own way, a form of piracy.

There are few additional overheads when software can be supplied on-line but I don't see Microsoft acting fairly in this respect. They need to lead by example and not expect good behaviour from others when they can't show it themselves

Posted by: alanw | February 21, 2007 11:20 AM | Report abuse

Here is why Vista is not selling. It is not good! 90% of my friends tried using the product, but switched back to XP Pro within a week.

Posted by: Leberama | February 21, 2007 7:13 PM | Report abuse

>>He told me a very interesting story about how an anti-piracy effort at Kaspersky netted the company a huge windfall in sales.

Did he happen to mention what he plans to do about the SpamThru Trojan? Just curious.
http://www.eweek.com/article2/0,1895,2034680,00.asp

Posted by: Mark Odell | February 21, 2007 7:23 PM | Report abuse

So hypocritical. MS was all FOR piracy when it meant gaining market share in an emerging market like Russia, when Linux was also trying to gain share. But once they are hooked, whammo! Pay the big bucks (relative to incomes in some of these countries). They're just like a drug pusher... the first baggie is free.

Posted by: Darkie | February 21, 2007 9:56 PM | Report abuse

So hypocritical. MS was all FOR piracy when it meant gaining market share in an emerging market like Russia, when Linux was also trying to gain share. But once they are hooked, whammo! Pay the big bucks (relative to incomes in some of these countries). They're just like a drug pusher... the first baggie is free.

Posted by: Darkie | February 21, 2007 9:58 PM | Report abuse

This is an ehancement for the future. "No piracy may happen if we do not support pirated products" mhed1983@yahoo.com tnx

Posted by: mhed1983 | February 21, 2007 11:29 PM | Report abuse

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