|
JULY 26 : Microsoft Corp., the world's largest software maker, said it will block computer users running illegal copies of its Windows operating system from downloading Windows software updates in a bid to stem losses to piracy.
To obtain software from three Microsoft download sites, customers will have to let the company electronically check that they are running a legitimate copy of the program, said David Lazar, Microsoft's director for Genuine Windows. Microsoft won't restrict access to security updates.
About a third of the copies of Windows in use worldwide are pirated, according to Microsoft. Many of those customers don't know they are using an ill-gotten copy, said Microsoft senior attorney Bonnie MacNaughton. This program will let them exchange the fakes for real copies while penalizing customers who intentionally choose pirated software.
``In the U.S. and Europe, with a lot of smaller consumers and businesses it will be effective,'' said Joe Wilcox, an analyst at new York-based Jupiter Research. ``In a lot of the overseas markets and emerging markets it won't be very effective because many customers there simply can't afford to pay for legitimate Windows. Microsoft might see some decrease in piracy there but this won't just end it.''
Shares of Redmond, Washington-based Microsoft rose 1 cent to $25.69 yesterday in Nasdaq Stock Market composite trading. They have declined 3.8 percent this year.
Pirating Industry
Almost $200 billion worth of software will be pirated in the next five years, according to a May report by the Washington-based Business Software Alliance and market research firm IDC.
The biggest impact from the new program will be felt in the U.S., Canada and Western Europe, rather than emerging markets with high piracy rates such as China, the Ukraine and Vietnam, Lazar said.
The company, which is trying out low-priced Windows offers in Thailand, Mexico, India and elsewhere, will have to come up with a different strategy to get low-income customers to abandon pirated programs, which can cost 1 percent of the regular price, said Wilcox.
``In many of these emerging markets there are two economies: the one that can afford to pay and doesn't, and the one that can't afford it,'' he said. ``The trick for Microsoft is to find a strategy that solves both problems.''
While customers will be able to get security updates to block viruses, Wilcox said Microsoft needs to make sure all users can get security patches, because infected machines can spread viruses and unwanted e-mail called spam.
CD Swap
Customers who unknowingly purchased fake Windows can get a free real copy from Microsoft by filling out a report and handing over their proof of purchase and counterfeit discs, said Lazar.
Others may be asked to pay $99 to $149.
When users visit the Windows Update, Microsoft Update and Download Center Web sites, they will be asked to validate that their copy of Windows is real. Then they'll download a program that checks the software. In exchange, they will receive $450 of free software and discounts. If they refuse, or their software doesn't check out, they won't be able to use the download sites.
Microsoft has been testing the restrictions since September.
|