Although Microsoft’s pursuit of software pirates remains vigorous, the company is softening its approach in an effort to reduce unintended negative consequences from the aggressive tone that has marked some license compliance efforts in the past. The company is also engaging partners in the effort to increase license compliance, promoting it as a revenue and customer relationship opportunity.

The Aggressive Approach

Microsoft’s longstanding efforts to combat software piracy have sometimes resorted to tactics that brought little credit to the company or its major partner an antipiracy efforts, the Business Software Alliance (BSA). These efforts often rely on anonymous information or tips, sometimes from disgruntled workers who have an interest in inconveniencing a former employer, who may be forced to seek legal counsel and conduct a software audit even if they are innocent. Blanket mailings from the BSA to small businesses, warning them of the dire consequences of using unlicensed software, did little to endear the antipiracy team to customers. Once reported to the BSA, violators were not given an opportunity to make good before penalties were levied or were publicly embarrassed as a warning to other violators. During one (quickly cancelled) campaign, Microsoft even encouraged resellers to tattle on their own customers by telling Microsoft when a customer ordered large numbers of PCs without preinstalled operating systems.

Feedback from customers and its own market research have shown Microsoft that its emphasis on the legal risks of noncompliance may have harmed the company’s image with the innocent as much as it has struck fear into the hearts of the guilty.

The New Approach

As a result of such damaging reactions, Microsoft is changing its approach to pursuing license compliance among business customers, (although the company continues to aggressively pursue piracy in reseller channels, such as the sale of computers with preloaded but unlicensed copies of Windows). "Our experience is that most of our customers want to be compliant and pay for the software they use," and the new approach reflects that experience, says Keith Beeman, Microsoft's director of license compliance.

The company has stopped issuing press releases that list violators and reinforce a message of dire consequences ("Software Piracy Robbed Indiana's Economy of More Than $200 Million").

Microsoft no longer surprises suspected violators with legal action, and customers now have an opportunity to bring their software into compliance before a suspected violation is escalated to Microsoft's legal department. Instead, the first contact is correspondence or a visit aimed at establishing a cooperative resolution and offering assistance.

Such assistance is likely to be welcomed by many customers, as determining exactly what software an organization can legally use is complex. The typical mix of OEM, retail, and volume license purchases and upgrades and the sometimes convoluted rules of software licensing make it difficult for many organizations to determine the exact status of every application installed on every machine—assuming they know which applications are installed on every machine.

To further this effort, Microsoft has created a Web site devoted to software asset management (SAM; not to be confused with Software Assurance Membership, a volume licensing program that uses the same acronym). The site includes templates and guidelines that organizations can use to manage software acquisition, keep track of licenses, and manage their overall software assets on an ongoing basis.

The company has also updated the Microsoft Software Inventory Analyzer (MSIA), a simple, free tool that can work on a single machine or across a network to determine what software is installed on every machine.

A Partner Opportunity

To assist organizations with license compliance, Microsoft is encouraging partners to play a larger role in SAM. Many companies delegate management of their IT systems to consultants or integrators, and because of their ongoing customer relationships, these firms are in a better position than Microsoft to know what software is in use and how it is licensed, and to help customers remain compliant with licensing rules.

Microsoft’s partner program, substantially revised in the fall of 2003, permits partners to demonstrate special competency in license management. Customers (and other Microsoft partners) will be better able to identify partners with advanced licensing skills, and these partners earn points that can give them access to additional SAM and licensing resources from Microsoft.

A partner link from the SAM Web site outlines the service and sales opportunities for partners and includes sales tools, information about licensing, and links to ISVs who produce SAM software that is more advanced than MSIA. The site includes an online calculator that demonstrates the revenue that partners can generate from providing software asset services to customers of various sizes and configurations.

Resources

The SAM Web site is at www.microsoft.com/resources/sam.

The Microsoft Software Inventory Analyzer can be downloaded at www.microsoft.com/resources/sam/msia.mspx.

Partner opportunities in SAM are described at www.microsoft.com/resources/sam/partnerguide.

Microsoft’s licensing policies are covered in detail in the Dec. 2003 Research Report, "Understanding Microsoft Licensing."

Microsoft’s piracy information Web site is www.microsoft.com/piracy.

For a list of the most recent Directions on Microsoft coverage of licensing topics, see the Recent Changes to Microsoft Licensing page.