Microsoft counts on antipiracy technique

Microsoft is set to release its first mainstream consumer software application protected by product activation, in what could be a first step toward expanding use of the antipiracy technology.

On Tuesday, Microsoft plans to officially launch Plus Digital Media Edition (DME), a $19.95 add-on pack for the Windows XP operating system. Microsoft has offered various versions of Plus since the release of Windows 95. But unlike earlier versions, Plus DME is protected by product activation, meaning that consumers will have to enter a 25-key code to install the software and then "activate" Plus DME over the Internet.

The change comes as the Redmond, Wash.-based software titan also has been experimenting with new methods for distributing software.

"Plus Digital Media Edition is the first Microsoft product to be sold digitally online," Jonathan Usher, director of Microsoft's Windows Digital Media Division, said in an e-mail response to questions about product activation. "In order to enable digital commerce, we needed to use a technology that allows consumers to easily purchase and use the product as well as protect against casual piracy."

The new Plus version offers features aimed at enhancing Windows XP's digital media capabilities, such as creating stories using digital photos or enabling a special party mode for Windows Media Player 9 Series.

Microsoft will be launching Plus DME as part of its participation in the Consumer Electronics Show in Las Vegas. The software titan also plans to release on Tuesday the final version of Windows Movie Maker 2 and Windows Media Player 9 Series. Beta versions of both products have been available for several months.

Steve Moore, a technology manager from Nashville, Tenn., said that Microsoft's expanding product activation to Plus DME is a sensible move.

"I wouldn't have any problem with the product activation technology being a part of the new release," he said. "Microsoft has gone to great lengths since Office XP's release to calm fears over the technology. It has become a nonissue for many early critics."

In fact, Moore sees Plus DME's product activation as a real opportunity for Microsoft to win over those consumers who remain wary of product activation. "By providing the new release...via the Internet," he said, "Microsoft has a chance to make some headway against what appeared to be the prevailing dislike for (product activation) when it was first introduced."

A technology misunderstood?
Microsoft broadly introduced product activation with the release of Office XP in May 2001; earlier, installation of an Office 2000 service pack added a less-sophisticated version of the technology to the productivity suite. The company later added the technology to the Windows XP, Visio 2002 and many other business software applications. But other than in Windows XP Home, it has shown reluctance to use the technology in its stable of consumer products, such as the Encarta encyclopedia or Works Suite. Earlier Plus versions did not require a code key for installation.

"We can't speak to future products using this technology," Usher said.

Product activation essentially locks the software to the computer's hardware configuration. Microsoft claims that no personal information is collected during the process, which essentially associates the software key and hardware configuration in a database of information collected for product activation. In theory, this method makes it easier for consumers to reactivate the software should the PC's hard drive ever be reformatted.

In summer 2001, more than a dozen consumer and privacy groups filed a complaint with the Federal Trade Commission that, in part, alleged the product activation process violated consumer privacy rights. But Windows XP's activation process, following optional product registration, led to a misunderstanding over information collection.

Microsoft isn't the only company using product activation. The 2002 tax year will be the first for which Intuit uses the process to protect against piracy of its TurboTax application. But its activation process is somewhat different than that used by Microsoft. According to Intuit's TurboTax support Web site, the software uses a license key deposited on the computer hard drive.

Intuit and Microsoft introduced product activation in part to thwart software piracy. Microsoft estimates that about half the copies of Office in use worldwide are pirated. Trade group Business Software Alliance estimates that, around the globe, about 40 percent of software is pirated. In the United States, the figure is about 25 percent. But the percentage varies dramatically by region and state, with New York, for instance, at about 12 percent, and Wyoming at 48 percent.

In 2001, the BSA estimates that in the United States software piracy accounted for $5.6 billion in lost wages and about $1.4 billion in lost state and federal taxes.

For the most part, product activation attempts to decrease the amount of casual piracy, where consumers buy one copy of software for multiple computers or pass it along to friends or family. Products like Plus or Works are easily pirated in this way if there is no product activation or other protection feature.

Paul Gunton, a tech support technician based in Kettering, Ohio, said he had mixed feelings about product activation. "It's a good idea because you know who has a copy of that piece of software," he said. "You can tell which computers that piece of software is registered on. You can help control software piracy."

Plus' activation minuses
But Gunton believes that the technology is too cumbersome for consumers. For one thing, he says, the activation codes are too long. He also sees problems when people have to reactivate software because of changes to the computer hardware configuration or the recovery of a damaged Windows installation.

"There should not be a limit of how many times you can activate/register on a computer," he said.

Some consumers initially balked at Windows XP's product activation feature, since they would not be able to install the operating system on multiple PCs. But technically, such activity is considered piracy, since the consumers would not have paid for use of the software on additional computers. Microsoft responded to these complaints by offering consumers discounts on Windows XP "family licenses."

For now, Plus DME buyers cannot expect similar discounts. "At $19.99, Plus Digital Media Edition is already a huge value," Microsoft's Usher said. "There are no plans for additional discounts for multiple copies."

Microsoft may also institute further restrictions. Office XP users can obtain an activation code for putting the software on a second computer, such as a notebook. But the Plus DME license is more restrictive.

"The license included with Plus allows consumers to install and activate on a single PC," Usher said.

DME is the second Plus version for Windows XP. Microsoft released Plus for Windows XP when the operating system launched in October 2001. Like earlier versions, Plus for Windows XP offered "themes" for changing the look of the desktop and a number of dynamic screen savers. Like DME, that version of Plus bolstered Windows XP's many new digital media features.

In December 2001, Microsoft offered some of those features as a free download dubbed Windows Media Bonus Pack for Windows XP.