Can Microsoft Stamp Out Piracy?
It'll soon be tough to make copies of Office. That means woes even for honest users

For as long as there have been personal computers, software publishers have tried to stop people from making unauthorized copies of programs. A variety of methods, such as copy-proof floppy disks, have been tried, and nearly all have failed. The industry estimates that piracy costs it some $12 billion a year worldwide. Now Microsoft ( MSFT) thinks it has found a way to cut down sharply on piracy, and a combination of technology and market dominance may work this time.

The result: You will no longer be able to lend your copy of Office to a friend or relative. That may be fair enough, but you will also face new hassles when you want to transfer your software to a new computer or restore your system after a serious crash.

THE WIZ IS HERE. For the past year or so, Microsoft has been adding a piece of software called the Office Registration Wizard to Office 2000 in some markets. Since spring, it has been part of all U.S. retail copies of Office. When the next version ships next year, nearly everyone, including business customers, will discover the registration wizard.

Current Microsoft products make you enter a 20-character ''product key'' during installation. The Office license--the legal gobbledygook that everyone accepts and no one reads during installation--permits installation onto one desktop and one portable computer. In fact, there is nothing to prevent you from using the same disks to install as many copies as you want.

The registration wizard changes that. Now you are only allowed a limited number of uses--50 in current versions--before you must register the product with Microsoft. To register online, by far the easiest method, you type in a 20-character code that comes with your CD. Software combines that code with internal serial numbers on your PC to create a unique ID number that binds the software to your hardware. You can also register by phone or fax, though you'll have to enter the ID number manually. (Corporate customers that buy Office in bulk use a different method that has the same effect.)

You go through the same procedure on a second computer. The license requires that it be a laptop that shares a primary user with the desktop, though in practice there is no way to enforce this. If you try to register the same copy of the program on a third computer it will fail. To make the copy of Office work, you will have to phone Microsoft and explain the reason for a third installation. Most often it will be moving the software to a replacement computer.

Although the new feature should cut down on some unauthorized copying, it won't have much impact on professional counterfeiters, who are especially prevalent in China and some other Asian countries. Nor will it stop dedicated hackers. Despite the prevalence of the security already, it took me only a few minutes to find cracked versions available for download from pirated ''warez'' Web sites.

Microsoft expects to prevent, however, the sort of casual copying that product manager Lisa Gurry says accounts for about three-fourths of all illegal duplication. The most common forms are the buyer who shares the CD with friends and the small business that buys one $500 copy of Office and installs it on half a dozen computers. I suspect that more than a few readers of this column have installed a copy or two of Office in violation of the license terms.

Why might Microsoft succeed where others have failed? A combination of technology, law, and market dominance. While annoying, the registration wizard is relatively unobtrusive and, unlike copy-protection schemes, preserves buyers' legal right to make an archival copy. New laws, notably the 1998 Digital Millennium Copyright Act and the Uniform Computer Information Transactions Act, pending in most state legislatures, have removed some ambiguity over companies' powers to enforce license terms. But probably most important is the lack of alternatives to Office. Office has become so standard that there's very little chance people might switch to a different program.

I have mixed feelings. On the one hand, Microsoft is entitled to protect its intellectual property. On the other, they should be able to do it in a way that doesn't complicate customers' lives. Perhaps Microsoft could sweeten the deal by offering a break on the stiff price. A less expensive Office might even discourage copying by otherwise honest people.


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