Microsoft and Software Licenses

by Bob Seidel

I just have to relay this story to you. It concerns licensing of software programs and the new level of copy protection (Activation) that Microsoft has put in place. I of course asked this lady's permission to print her story and I wish I could have helped her more than I did. Perhaps this can help you...

As I have said often in previous columns, you have to read the license agreement for software that you buy. But in terms of copying the software onto more than one PC, just about all programs these days forbid this - you can only install one purchased copy of the program on a single PC. This includes Windows itself, MS Office, QuickBooks, and now even TurboTax.

The fact that these software companies have always perceived that they are losing significant revenue due to copying has forced them to implement ever more effective copy protection schemes. This is a story about the Microsoft's implementation.

The lady in question called me up with a problem - she couldn't open Outlook Express to read her email - it immediately got a severe error. I suggested that she reinstall Internet Explorer 6 (which includes Outlook Express) to attempt to recover from the problem. She then informed me that she had already tried that, and it failed. It failed because the Windows Update function issued an error message that her product key was incorrect, and refused to continue with the installation. What had happened?

It turns out that she had purchased a PC with Microsoft Windows XP Home version. For some reason, somebody had convinced her that Windows XP Professional was better (it really isn't for home users) and so the person brought his CD of Windows XP Pro to her house and proceeded to install it. This violated the Microsoft license.

During installation, the MS software takes a snapshot of the hardware in your computer. Each snapshot is unique - like a fingerprint. This is then associated with the product key code (printed on the MS license) and sent to Microsoft. A return code is then received from MS that enables the software to function. You cannot use your software for very long until this Activation process is completed. Now, MS knows that a particular installation of the product is associated with a specific PC. If more than one "fingerprint" is associated with a single product key, MS knows its been copied.

The big question nobody knew was: When is this checked? Well, we now see that apparently it is checked any time you do a Windows Update function to get fixes or updates. My recommendation to the lady in question was to reinstall the original Windows Home from CDs.

Other companies are implementing their own version of this. Intuit has tightened up QuickBooks and caught many clients copying their software. And in this year's big news, there are many people furious with Intuit for adding copying protection to TurboTax. But you have to ask yourself - why are people so upset if they weren't copying it? The answer is, of course, that many people were buying it, doing their taxes, and then giving it to a friend. Well, that is now stopped.

The point is: we killed the golden goose. Because software copying was so common, the companies were forced to implement these protection systems. We sowed the seeds...

By the way, if you upgraded to Internet Explorer 6 (which includes Outlook Express 6) and now are having trouble opening up email attachments, go to Tools / Options, click the Security tab, and uncheck "Do not allow attachments to be saved or opened that could potentially be a virus". This is another example of Microsoft tightening up the security of its software, but in doing so it set as default an option that really confuses people. On the other hand, if you DO open an attachment, make sure it doesn't contain a virus. I would recommend unchecking the above option, and using a good anti-virus program that checks attachments instead.

(Bob Seidel is a local computer consultant in the Southport / Oak Island area. You can visit his website at or e-mail him at