New product activation features in Windows XP will prevent "casual copying" of the operating system (OS) among small office and home office (SOHO) users with two or more PCs, but Microsoft will offer them a modest discount on additional copies of the OS with a new Additional Family Licenses program.

The program allows users to license up to five copies of the OS, with additional copies costing an estimated US$10 to $30 less than regular retail licenses. (Microsoft does not set retail prices for its products, but the estimated retail price for Windows XP Home is US$199 new and US$99 for upgrades.) No media or documentation will be included with the product; purchasers will get an end-user license agreement and an additional product key that will enable them to use their current CD-ROM to install Windows XP on another PC. The additional licenses will initially be available only at retail outlets. In 2002, Microsoft expects to offer additional licenses also via online software vendors and from its Windows Product Activation call center, which has been set up to provide telephone-based activation of Windows XP and to deal with product activation problems.

Individuals or offices that want to license more than five copies of Windows XP will be steered to a standard volume licensing program, such as Microsoft’s Open License program. However, Windows XP Home Edition is not available in volume licensing programs. Home offices that opt for Open License will be required to upgrade to the more expensive Windows XP Professional, which costs approximately US$100 more per copy than the Home Edition upgrade.

Even customers with fewer than five PCs could benefit from the Open License program because it offers discounts on a wide range of Microsoft products, including not only Windows XP, but also Small Business Server, Office XP, Visio 2002, Project 2000, FrontPage 2002, CD-ROM courseware, and other applications and OSs. Anyone purchasing five or more of these products qualifies for Open License discounts, which are typically 20% to 30% below regular retail prices. For example, a home office with two PCs, each running Windows NT and Office 97, plus Publisher 98 on one machine and Visio Standard on another—six products in all—could save about US$95, or 9% off retail prices, on upgrades to all of its software by purchasing upgrades to Windows XP Professional, Office XP Professional, Publisher 2002, and Visio 2002 through the Open License program. Although the savings would be modest in this case, the office would also be upgrading to the more capable professional versions of Windows XP and Office XP (because volume discounts are not available for home editions of these products).

Resources

Additional Family Licenses are only available at retail and may be difficult to find. SKUs for the Windows XP Professional full and upgrade licenses are E85-01209 and E85-01210, respectively. Home version full and upgrade license SKUs are N09-00477 and N09-00478, respectively.

For more information on activation, see "Operating System Activation Aims at Piracy" on page 24 of the Mar. 2001 Update.

Microsoft’s Open License program is described at www.microsoft.com/licensing/programs/open/default.asp.

A list of software included in Microsoft’s licensing programs can be found at www.microsoft.com/business/downloads/licensing/ProductList.doc.