The move is the latest in a series of expansions for the Windows Genuine Advantage program, which Microsoft quietly launched last September. The program, which runs software that verifies whether a particular copy of Windows is legitimately licensed, is the linchpin of a campaign by Microsoft to boost the number of paying customers among the millions of people that use Windows.
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The Windows Genuine effort started as a purely voluntary program, but Microsoft has since been requiring validation for more and more customers who want to download software from the company.
In March, for example, Microsoft said it would require those who want to download a foreign-language pack for Windows to first validate their copy of Windows.
Starting Wednesday, customers in the United States whose copies of Windows XP Professional do not pass validation will be presented with the option of getting a free licensed copy. To do so, customers will have to fill out a counterfeit report with Microsoft and be able to provide the Windows disk they have as well as some kind of receipt for their purchase.
"Our goal is really to ensure that the complimentary offer is for people who really truly were unknowing victims of counterfeit," said David Lazar, director of the Genuine Windows program.
Those who don't have the disk or the receipt are eligible to buy a licensed copy online for $149. That's less than the cost of a full copy of Windows XP Pro but more than what customers pay when they get Windows on a new PC.
"At first glance it seems kind of self-defeating to reward pirates with a free licensed copy," said The NPD Group analyst Ross Rubin. However, he said it is an opportunity for Microsoft to show customers the benefits of its official software and potentially win them over as legitimate customers for future versions. Plus, it could help them track down those who are heading up piracy rings.
"Much as narcotics officers bypass the lower-level dealers to get at the kingpins, what they are likely trying to do is get at the distributors (of pirated Windows)," Rubin said.
For now, the Windows validation process remains optional for most customers, though sometime this summer, Microsoft plans to make such scanning mandatory for those who want to download software from the company's site.
Customers whose copy fails to pass inspection won't be able to get most Windows-related downloads but will still be able to get security updates, either by turning on Automatic Update or by manually selecting a particular patch. The Windows Update utility, which determines all needed updates and presents them for download, will only be available to those whose copy is found to be licensed.
But before taking the program that far, Lazar said, Microsoft wanted to test how the upgrade process might work. Hence the current offer, which runs through July 30. It is not clear what offer Microsoft will have when it exands the program.
"We knew that to fully implement the program, we would want an offer like this," Lazar said. "This gives us an opportunity to test it."
One of the things Microsoft is testing is a scanning tool that tries to verify that a customer who is upgrading to a legitimate copy of Windows already has all the right Windows files. The tool checks to make sure that all of the original Windows XP system files are present and not damaged, though Microsoft also sends a CD to customers and encourages those who suspect that there might be problems with their Windows copy to reinstall the operating system.
Customers check in
Analysts had worried that Microsoft might make customers completely reinstall Windows in order to convert to a licensed copy of the operating system.
So far, customers have appeared quite willing to let Microsoft check their copy of Windows. In the eight months since Microsoft began asking people whether they would be willing to test to see if their Windows copy was legitimate, a majority of those asked have gone along. Worldwide, 48 million customers have viewed a page asking them if they want to take part in the program, with 27 million people, or 56 percent, opting to do so.
Lazar would not say exactly how many bogus copies Microsoft has found, but he said the "vast majority" of machines are judged to have licensed copies of Windows. The software piracy rate is estimated globally at about 36 percent, and Lazar said Microsoft has seen piracy results similar to what it had expected.
The company has also been testing a paid-upgrade offer in China, one of three countries where validation is already mandatory. Lazar said "several thousand" customers there have taken the option of buying a discounted version of Windows, with XP Pro selling for roughly $150. The vast majority of systems in China run unlicensed copies of Windows.
Michael Cherry, a Microsoft analyst with market researcher Directions on, praised Microsoft for clearly communicating where it's headed for the program and for making sure it had the tools in place to properly verify Windows copies. At the same time, he said he wished Microsoft were running more ads that helped buyers spot fake copies of Windows before they made a purchase.
"This is all very good, what they are doing, but it's all very 'after the fact,'" he said. Some of the things that Microsoft uses to distinguish its own software, such as its "Certificate of Authenticity" labels and its hologram-labeled disks, are not that well-known to consumers, he said.
"I doubt that my dad knows what a 'Certificate of Authenticity' is," Cherry said.