A Closer Look at Windows XP Product Activation

In last week's Windows 2000 Magazine UPDATE, I discussed some of the more confusing aspects of Windows XP Beta 2, but the controversial Windows Product Activation (WPA) feature, which ties each copy of Windows XP to a specific PC, remains a big stumbling block for most people. WPA was designed to prevent casual piracy—such as when a user buys one copy of Windows and then lets a friend or family member install it on his or her PC as well. According to some estimates, this type of copying represents about half of the software piracy-related financial losses the industry suffers each year. In other words, piracy isn't limited to counterfeiters. But many users are concerned that WPA will be inordinately prohibitive and might actually prevent them from using their systems in some cases. I spoke with Allen Nieman, a product manager for Licensing Technologies at Microsoft, to clear up the confusion about WPA.

First, corporate customers that buy Windows XP volume licenses, such as those provided by the Microsoft Open License, Microsoft Select, or Microsoft Enterprise Agreement, won't need to deal with WPA at all; those versions of Windows XP will not include WPA. "Most business customers would qualify for an Open License, but they don't realize that," Nieman said, suggesting that corporate customers who are purchasing Windows products through retail channels look into this option.

For those of us who must deal with WPA, however, the first concept to understand is that WPA and product registration are two different things. A Windows XP-based PC must be activated, but you don't need to register the product. "Based on customer feedback," Nieman said, "we've made changes to the UI post-Beta 2 to make the changes more obvious." You can handle activation by Internet or by phone. For customers living outside the United States and Canada, Microsoft is working to ensure that the phone-based activation process goes as smoothly as possible. Microsoft will make toll-free phone activation available to most customers around the world. For most of those who lack a toll-free option, the call will be local. And for the few locations in which neither option is available, customers can call collect (or the local version of collect) to activate Windows XP: Microsoft will pay for the phone call.

"Microsoft has customer service centers in several countries throughout the world that will be taking the activation phone calls," Nieman told me. "The centers are local or regional depending on telephony and language requirements. At a minimum, all of the languages into which Windows XP is localized—as well as a few others—will be supported for telephone activation."

If you don't activate Windows XP for 30 days (2 weeks during the beta), you'll have to activate it the next time the system boots to continue using it normally (Windows XP won't disrupt an active session). But you have no grace period once the activation time limit is reached: When the system is restarted, you have to activate the product or you'll be logged off the system immediately. The computer will boot, but you won't be able to get past the Welcome screen (if you use the Home Edition or Professional Edition in a workgroup) or logon dialog (if you use the Professional Edition in a domain). Unlike Office XP, Windows XP has no reduced functionality mode. Nieman notes that dismissing the activation reminder three times is more work than actually activating the product: Microsoft has ensured that the process is quick and painless, especially for Internet activations.

Regarding questions about what hardware changes would trigger a reactivation, Nieman told me that the reality is, as expected, less dramatic than what many people fear. "Basically, if you do a substantial upgrade, you'll be asked to reactivate," he said. "Standard upgrades—adding a new hard drive or network card, for example—won't require you to reactivate." Also, making many changes to your system will eventually trigger a need to reactivate. Nieman compared the hardware configuration check to the one Windows uses to determine whether you need a new driver when you add hardware to your system and then reboot. For security reasons, Microsoft won't say what exactly triggers the reactivation.

"What we're doing is reducing piracy," Nieman said. "Is it perfect? No. But we want to do it in such a way that users are not denied their rights to use the product. So we're going to err on the side of the user." If you mistakenly activate Windows on one machine and must activate it on another—or you buy a new PC and want to install Windows XP on it instead of the old PC—simply call Microsoft. The company will reactivate with no questions asked. Nieman says the company realizes that customers will need to use phone reactivation for various reasons and won't make it difficult.

And finally, licensing isn't yet finalized, so it's possible that Microsoft will figure out a way to devise a "home" or "individual" license, but that's currently up in the air. The problem is that doing so would affect all of the company's other licenses and products, so it's more complicated than is immediately obvious. If Microsoft were to grant individuals a two-PC license for Windows XP for, say, $130, wouldn't small businesses want a similar deal? And if they couldn't get a similar deal, wouldn't they just buy the individual licenses instead? According to Nieman, Microsoft is still working to meet this challenge.

In short, WPA is the current bugaboo in the industry, but a year from now, we'll probably wonder what the controversy was all about. Microsoft is simply protecting the licenses that are already in place—while not making it unduly difficult for users to get up and running with the new system. If you have any further questions about WPA, please don't hesitate to contact me.