Microsoft may not change policy despite WGA changes

Analyst predicts that Microsoft will not soften its stance on piracy

While there has been a fair amount of piracy talk among Microsoft executives in recent days -- and changes made to Windows' anticounterfeiting technology -- that doesn't mean the company is rethinking its antipiracy policy, an analyst said Thursday.

"None of this changes the intensity of Microsoft's campaign," said Michael Cherry, an analyst at U.S.-based Directions on Microsoft. "They're extremely serious about piracy."

During an hour-long Q&A session at an investor conference run by The Goldman Sachs Group, Ray Ozzie, Microsoft's chief software architect, mentioned piracy twice. Although he was far less blunt than CEO Steve Ballmer -- who last week said the company is thinking about "dialing up" the intensity of its anticounterfeiting effort as a way of putting more dollars onto the bottom line -- Ozzie needled freeloaders.

"A lot of the software that we generate is used at home by consumers, and consumers tend to be more comfortable with software that they can get free," Ozzie said in answering a question about how open Microsoft is to advertising-driven software. "Some people get it illegally. Some people do pay for it; some people pay for it on one machine and duplicate it on multiple machines."

But he also saw pirates as potential customers, assuming that Microsoft can tweak its software or how it's delivered enough to entice them into the fold. "I look at the half-billion people who are using Office today ... there are a number of those half-billion people who are using it who paid for it, and there are a number of those users who didn't pay for it but find immense value in it. That's why they found a way to use it.

"I look at it, and I go, 'Wow, if I could reach those people with a service,' " Ozzie said.

Do Ozzie's benign comments on piracy, combined with a recent change to the anticounterfeiting technology within Windows XP, mean Microsoft is softening its stance?

No, says Cherry. "I don't see these really changing what Microsoft thinks about piracy."

An update to Windows Genuine Advantage (WGA) Notifications, the tool that determines whether the operating system is legitimate or not, has added a new, third category to its piracy flags. Dubbed "indeterminate," the new class lets WGA hedge. When a system's copy of XP is tagged as indeterminate, the user is directed to online resources to troubleshoot the problem but is not necessarily pegged as a pirate.

"The changes in the wording, that you're 'stolen' or 'legit' or 'indeterminate,' doesn't matter," argued Cherry. "If you see a failure [of WGA validation], you're still going to think that they're calling you a crook. But because there was no bad faith on the part of people who ended up with the bad copies [of XP] due to no fault of their own, Microsoft wants to add this 'indeterminate.' "

Microsoft has been hammered by some users and bloggers over WGA -- in particular, for how often users are falsely accused of running an illegitimate copy of Windows and for its refusal to get specific on the percentage of such "false positives."

Is the new "indeterminate" flag a way to address those problems? Cherry said no.

"You don't even need the real numbers of false positives to prove that in this case, an incredibly small percentage is actually a very large number of users," he said. "The reality is that there are false positives.

"I could see users putting up with false positives if there was some other value in WGA," Cherry said. But, he added, as far he can tell, there isn't.

While the messages from Microsoft may sound confusing or conflicting, Cherry said he is convinced the company has a one-track mind on piracy, which may not necessarily be a good thing for users. "Sometimes you have the right to do something, but enforcing the right raises so much bad will, why not just forget about it?" Cherry said.

Microsoft officials were not immediately available for comment.

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