Important activation changes to Windows Vista

[slgrieb]

Actually, Noo, just because format c:'s software failed to activate doesn't automatically prove that someone had illegally used his product ID. Errors in activation systems do happen, even with new products straight from the box. Of course, it is usually only a moderate hassle to resolve these problems. Still, even if format's ID had been stolen, it would seem to be the thief who benefits, while format pays the price.

The lack of copy protection certainly didn't stop MS from becoming the largest software company in the world, and MS has consistently shown a willingness to sell their products very cheaply, give them away, or even subsidize them to gain a strategic advantage. Which indicates that MS has really high margins on their products. In fact, I've seen estimates that the gross margin on Windows is about 95%. Now, there isn't anything inherently wrong in this at all, but I want to reference it later.

So, I'd argue that copy protection schemes do little do deter the large, technically sophisticated, and well financed criminal organizations which practice piracy on a massive scale, while making life just a bit more difficult for the honest guys who actually form the great majority of users. Think about all the news stories showing mountains of bootleg DVDs for sale in Thai markets, while a U.S. citizen can't legally make a backup copy of a movie he buys.

What copy protection has been proven to do beyond any reasonable doubt is to create resentment and frustration on the part of legitimate users, and to spawn entire industries given to circumventing said copy protection. This isn't the first time that copy protection schemes have been prominent in the industry. The last wave of copy protection eventually collapsed under the weight of user complaints, much as DRM in the music industry is feeling the pressure. Eventually, I expect the cycle to repeat itself in the software industry.

The message that copy protection clearly delivers to the customer is "We know you'd steal this product if you could, and we also want to wring every possible cent of profit from you. Occasionally awkward and inconvenient for you? Too bad!" I'd argue that MS might be better off in the long run to accept something like a 94% margin on Windows in exchange for good will. After all, Linux gets better every day, and didn't Mac sales rise something like 35% last quarter?

[NooNoo]

I agree that it is cumbersome and inconvenient. I never said it wasn't. But do you have a better way? I live in a fairly well off area. Every single computer I have seen on this street has at least one piece of pirated software and several gigs of downloaded mp3/dvd. So yah, the respectable church going folk round here steal when given the opportunity.

Do you have a refernce for that profit margin percentage? When you see the size of the department working for 5 years straight, I would doubt that the profit is anywhere near that.

[slgrieb]

Noo, the citation on margin stuck in my head from many years ago. I might find it with enough effort, but here is an article from ZDNet citing margins around 86% for Windows. Admittedly not up to date, but I have only so many hours per day I can spend being grumpy and argumentative: http://news.zdnet.com/2100-3513_22-966219.html

As do you, I see lots of machines with bootleg software installed. This still isn't an argument in favor of copy protection. The logical fallacy here is the inherent assumption that if the people who have bootleg products were given an unavoidable choice between purchasing the product or not using it, that they would invariably purchase the product instead of choosing to live without it.

Let me recap my position on copy protection. It is ineffective against the major violators. It breeds an industry to circumvent it. It makes use of the product unduly difficult for the legitimate owners.

I also want to reiterate that the last big push for copy protection some 20 years ago failed due to user opposition. Much of it was corporate. MS is moving down the same path. I still think that history will repeat itself. Really, this isn't much different from the debate about Digital Rights Management issues, and I'd say the handwritting is already on the wall here.

[NooNoo]

I have said I agree, all you are doing is reiterating the problem, do you have another solution?

As for the profit margin...taken in isolation, that would seem excessive, taken as a whole and given that economies of scale allow for much larger profits and that R&D divisions are not included in the calculation (yet everything the R&D people turn out end up in an MS product) then I think the margins given are "headlines" and do not truly reflect the situation.

How much of your phone call is profit? How much profit on ram? Processors? All of these things have high profit margins which inturn pay R&D, new products and infrastructure maintenance.

Profit percentage is somewhat of a red herring in this debate.

The debate is, how do you stop people from stealing?

[slgrieb]

The debate is, how do you stop people from stealing?

Well, I don't believe any of my posts have addressed the broad topic of preventing people from stealing, per se. And I certainly never understood that was what you meant to say, Noo, as opposed to a more restricted discussion of copy protection. All I have ever said is that copy protection is not an effective tool to prevent piracy, and that it tends to be more of a burden on legitimate users than thieves. Well, it also creates resentment, etc.

Anyway, in case anyone is curious about how well product activation and WGA have curbed piracy, you might want to read this: http://arstechnica.com/news.ars/post/20070124-8690.html

There are a couple of different ways to interpret these numbers. Either we can take the high rate of WGA failures at face value and conclude that activation and validation don't seem to have curbed piracy much, or that the piracy figures derived from these numbers are exaggerated. Win/win for my position on copy protection, I think.

Microsoft expects huge sales gains in China, but copy protection isn't being credited; rather improved enforcement by the Chinese Government gets the nod. In particular, I suggest you look at the percentage of legal copies of Windows installed Q1 of last year. See: http://news.com.com/Microsoft+2007+C...3-6174762.html

Fun, but less reliable: http://www.newlaunches.com/archives/...d_in_china.php

Am I the only one who questions piracy figures? http://australianit.news.com.au/arti...nbv%5E,00.html

[NooNoo]

The arstechnica report says nothing about curbing piracy, it only gives figures about WGA failures and the frustrating lack of the breakdown of figures given thus far by Microsoft.

China has always been a problem, and will continue to be for some time, they are only half way there and the Australian report is about how to compile lost revenue figures based on numbers of items pirated - it asks essentially would a person who pirated a music track have bought that track if it wasn't available as a pirated version?

Each time I have replied, I have asked you for another solution... have you got one?

[slgrieb]

Noo, I feel we are going around in circles here! I keep saying that copy protection is an ineffective solution to software piracy. You don't really ever dispute this contention, but you just keep asking for an alternative answer. You are really starting to sound like our President on the subject of Iraq! In both cases, I advocate immediate withdrawal.

If you are asking me how to prevent theft, my answer is "you can't!" The best you can hope do is manage your losses. So, I'd contend that dropping copy protection on software and relying on conventional police work to bust the big pirates is more effective.

What does the Arstechnica article mean? Well, if 24% of Windows installations fail WGA, then Microsoft's copy protection measures would be largely ineffective. If the system is generating a lot of false positives, then many legitimate Windows licensees could be unfairly deprived of the right to download updates. The fact that MS doesn't want to go into detail about WGA results suggests that MS feels that the tool is not very accurate.

As an alternative position, I suppose you could contend that the 24% failure rate is correct, and that had it not been for Windows Activation, the piracy rate would be even higher. Frankly, I don't think MS worst-case predictions would suggest this as reasonable, and I doubt anecdotal evidence from those of us in the business could support those numbers either.

So, my alternative to copy protection would be "conventional law enforcement." The article about Australia's AG is just meant to suggest that companies tend to overstate their losses from piracy. Personally, I find it pretty compelling.

Just so things are clear, I'd say if you want to reduce piracy, enforcement from local governments is the key issue, and copy protection is ineffective. My alternative is better basic law enforcement and Governmental cooperation.

[format c:]

The solution to stealing is an open source alternative if it is available and compatible with your system
I just recommended Open Office 2.1 to a young man at work since he could not afford the MS price tag
I use the same office package
For an OS I would recommend Kubuntu 7.04 , I have loaded a box with it and will be testing it out, My laptop will be getting a Kubuntu upgrade so that the wireless will work
The only problem I have with activation and DRM is that it makes the product a hassle to use
All I can offer to the person tempted to steal is to look for an open source alternative

[NooNoo]

Just so things are clear, I'd say if you want to reduce piracy, enforcement from local governments is the key issue, and copy protection is ineffective. My alternative is better basic law enforcement and Governmental cooperation.

So rather than press a button on a web page and maybe have to make a free phone call, you think that sending a human into a house to audit how many times they have installed a single user licence?

If a neighbour hates you and reports you for copyright infringement and a policman is sent round to investigate, wouldn't that piss you off more?