Microsoft to Tighten Windows Genuine Advantage Screws

To date, with its Genuine Advantage anti-piracy programs, Microsoft (MSFT) has targeted consumers. Windows and Office users have been required to validate their products as "genuine" before being able to obtain many downloads and add-ons.

Come this fall, however, the Redmond software maker is planning to turn up the Genuine Advantage heat in two ways: by baking more Genuine Advantage checks directly into Windows Vista, and by taking aim at PC makers, system builders, Internet cafes and other sources of potentially pirated software.

Microsoft officials — whose Genuine Advantage Notification strategy came under fire earlier this summer — declined to share specifics about its new Genuine Advantage plans. But executives already have been setting the stage for the upcoming changes in recent keynote addresses.

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"We expect to do more to make Windows more differentiated when it's genuine, and so genuine customers get a truly different experience than non-genuine customers, as well as to make piracy harder, so that our genuine partners can do a better job competing with those that don't play by the rules," Windows Client Marketing Chief Michael Sievert told attendees of Microsoft's Worldwide Partner Conference in July.

Microsoft Platforms and Services Co-President Kevin Johnson was more specific about Microsoft's plans, in his remarks to Wall Street analysts at Microsoft's Financial Analyst Meeting in late July.

"We built a set of features and a set of functionality that is only available to genuine Windows customers," Johnson said. "Windows Defender, for example, the anti-spyware for Windows XP and Windows Vista, is available to genuine Windows customers. Windows Media Player 11.0, Internet Explorer 7.0, will be available for download for Windows XP customers who are genuine, and of course those are built into Windows Vista. Future updates to Internet Explorer and Windows Media Player for Windows Vista will require them to be genuine. And certainly there's some premium features built into the Windows Vista operating system that will require genuine validation as well. So we're really trying to amplify the fact that being genuine enables the set of benefits and value to access these types of features and capabilities."

Johnson did not single out which premium features in Vista will require validation before use. There are a number of new Vista features which Microsoft is making available only to users of its consumer- and small-business-focused "premium" Vista editions — Vista Home Premium and Vista Ultimate.

Examples of premium features which Microsoft potentially could lock down under Genuine Advantage include Windows Photo Gallery; Windows Media Center; Windows DVD Maker; and games like Texas Hold 'Em Poker that are part of the downloadable Vista Ultimate Extras products and services.

At the same time as it is baking into Vista more Genuine-Advantage-required features, Microsoft is stepping up elements of its Genuine Advantage program aimed at the reseller channel.

"We expect to do much more as a Windows business to help our partners to sell products based on Genuine Windows to compete with pirates. This is a major opportunity both for Microsoft and our partners, " Windows Client Marketing Chief Sievert told channel partners in July.

Platforms and Services Co-President Johnson had the same message for financial analysts later that month.

"There's a higher level of genuine Windows attached to PC shipments in developed markets than emerging markets, which means, if we want to continue to drive growth of Windows client OEM units faster than PC shipments, we've got to have a great compelling value proposition for the user for genuine Windows software and for the channel," Johnson said.

One element of Microsoft's OEM-focused Genuine Advantage strategy could be increasing the number of copies of Microsoft Office that are preloaded on new PCs. Under an internal Microsoft program known as the Unlicensed PC Initiative, the company is working to reduce piracy by curbing the number of new PCs sold without Windows — and, increasingly, Office — preloaded on them.

Microsoft announced on July 11 that it has decided to allow PC makers/system builders to pre-install Microsoft Office Home and Student 2007 edition on new PCs. Previously that version of Office was sold only are retail. Microsoft officials at the Worldwide partner Conference also announced they will allow system builders to provide customers with a free 60-day trial of Office on new PCs, allowing them to sell the Office license after the PC purchase via a program called "Office-Ready PC."

Outside the U.S., Microsoft has begun distributing stickers to partners selling software to Internet Café operators that read "This Internet Café uses genuine Microsoft software." In order to obtain the stickers, the cafes must validate their software through Genuine Advantage.

Roger Kay, president with Endpoint Technologies Associates, said he had no doubts that the channel would be a big Genuine Advantage focus for the Microsoft, going forward.

"For the channel, which is in general more complicit than end users, Microsoft will pursue a combination of education, engineering, and enforcement," Kay said. "Education is telling people how to figure out whether they have bogus copies and warn them of the dangers and is aimed at those trying to do right. Engineering covers technologies put into Windows to prevent counterfeiting and alert customers to the fact that they have a bad copy. Enforcement is aimed at the people who know they're wearing black hats and involves working with law enforcement and other measures to bring installations into compliance."

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