OEMs Asked to Change OS Distribution Practices to Combat Piracy

Microsoft will significantly change the way its operating systems (OSs) are distributed with new PCs in 2000. The changes are aimed at reducing piracy and at creating PCs with superior “self-healing” ability. OEMs will be required to ship with each computer either a “BIOS-locked” CD-ROM that ties the CD to a particular make or model of computer or to put a backup copy of the OS on the hard disk. The decision has caused a stir within the industry as OEMs and Microsoft Authorized Replicators (ARs)—the companies that make OS CDs for OEMs—wrestle with the implications of the new policy. Corporate users may also be impacted.

Targeting the Gray Market

The new policy is aimed at the large “gray market” for Microsoft OS CDs.

“There’s been a huge problem with abuse of OEM media,” said a Microsoft source, adding that large numbers of OEM CDs are appearing in the market where they aren’t supposed to be. In some cases, OEM-only CDs are being sold through retail channels. Many are available on the Internet via auctions or from Web sites. Small PC builders sometimes purchase “spare” copies of Microsoft CDs and manuals from large companies that order thousands of PCs and see no need to keep thousands of identical Windows CDs on hand.