MS uses Office registrations to enforce licences, steal customers

Turn yourself in and buy some more licences off Dell, it says here...

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Microsoft's war on piracy never was a clear-cut struggle between good and evil (considering the dramatis personae, feel free to be unsurprised about this), but now it appears the company is using anti-piracy pitches to steal customers from its own resellers. Inadvertently? Perhaps, but the concentration of business in the hands of a few key resellers and of Microsoft itself is a natural consequence of the company's current activities.

The Register has received a copy of a letter from Claudio Silvestro, director, small business and channels for Microsoft Canada. We understand it was sent out to Microsoft software users, using data gleaned from Microsoft Office registrations. In this case the letter was passed on to us by an irate systems integrator, who himself received a copy of it from a customer.

"Re: Microsoft software licences," it begins. "Many reputable companies unwittingly find themselves faced with penalties because they did not realise that they were not properly licensed.

"The Microsoft Compliance Team regularly runs reports analysing customer purchases. [our emphasis] With the number of employees and PCs increasing in your business, we understand that as a Microsoft customer it is possible that the originally purchased copy of Microsoft Office, provided with a single user licence, may have been copied onto multiple PCs."

One way or another, the seeds of doubt are planted in the hapless customer's mind. Are my staff copying software? Did my reseller supply me with dodgy software? Does Microsoft's all-seeing the-shadow-knows Compliance Team know I'm copying software? And if the answer is none of the above, can I prove it? Where did I put those EULAs?

So, what are you going to do about it? Helpful Claudio has the answer. "In this situation, purchasing additional licences is the required course of action and there has never been a better time to get compliant." (our emphasis again)

Yes folks, it's a special offer. Order Office 2k before the end of January (darn) and you get $50 off per licence up to a maximum of $2,500. The Ts & Cs say this only applies to packaged product and copies purchased through the Microsoft Open License Program, so the pitch is clearly being made at the retail and small business sectors, inhabited by the likes of our systems integrator informant.

Hilariously, Claudio suggests: "To help make it easier for you to stay on top of your company's software assets, please complete the enclosed Microsoft inventory summary sheet. [Sign this confession?] Should you discover that you are under licensed for any Microsoft products, please call your preferred reseller [finally, the stiff you bought it from gets a slight look in], or contact..." Softchoice, Programmers Paradise or Dell.

So to sum up, small guy sells Microsoft software to customer. Customer gets letter with chilling undertones and (arguably) requiring a clean breast of things, and the 1-800 numbers of three preferred Microsoft major resellers they can straighten things out through, with added discounts. We don't know if the original reseller had access to these discounts, but as he wasn't consulted about the mailshot before it went out, somehow we doubt it.

Effectively Microsoft is using its registration database and menacing noises about piracy to steer customers away from the little guys, and towards the big ones. The discounts available on bulk (with five being defined as bulk) software through the Open License Programme, together with Microsoft's intention to use a key-based protection system for consumer and single copies of Whistler will tend to have the same effect. The small guys get higher prices and their customer base grazed by the big guys, the big guys get bigger.

Our informant is more than a little ballistic. "What Microsoft does now with my customers is, that they are approaching them, to check their systems and to buy additional copies of the software from Microsoft's preferred resellers... How can I protect myself? Keep the registration form? Install a pirated version of Microsoft's software, or let Microsoft take bit by bit my customers away from me?"

The Register reckons that customers who're unsure how effectively they'd pass an audit might themselves start wondering about the wisdom of registering software. Once they know where you live, they've got you, right?

"Most hardware manufacturers," continues our integrator, "realise that the majority of systems are sold through systems integrators and are starting to support these interests more and more. Bill didn't realise that and thinks he just have to deal with three companies to make his sales.. kind of stupid I think." ®

Related stories:
MS opens up on Whistler copy protection
MS: it's (nearly) illegal to buy PCs without Windows

Reducing security risks from open source software

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