A bizarre rumor about Microsoft making sweeping changes to its Windows Product Activation (WPA) technology in Windows XP Service Pack 1 (SP1) is completely false, the company told me Thursday. The rumor, which was started by a small Web site for technology enthusiasts, had Microsoft changing the product keys for all its customers who use volume licensing. This rumor has spread across the Internet and become embellished en route. One version that I came across Thursday morning claimed that Microsoft was making the change so that it could charge licensees yet again for SP1. Not so, says Microsoft.

"There is no truth in this rumor," Allen Nieman, the lead technical product manager for licensing technologies at Microsoft told me Thursday. "We are not changing the way volume licensing customers install or deploy Windows XP. We are not issuing volume licensing customers new product keys. Volume licensing customers are not impacted by any of the changes we are making to activation in SP1. The only folks impacted by the changes we are making in SP1 are people with illegal copies of Windows."

As I first reported in May 2002, the WPA feature in XP SP1 will get two minor modifications, neither of which will affect legitimate users. First, Microsoft discovered that most pirated XP copies are tied to one company's volume-license product key. So, Microsoft alerted the company about the problem, changed the company's key, and disabled it for use after SP1. Anyone who uses this pirated key will be unable to upgrade to SP1 or any future updates through Windows Update. Second, Microsoft is adding a 3-day grace period for people who use one product key to install XP on a second system. In the past, users who wanted to install a copy of XP on a second system had to immediately activate by phone. This new policy will give users some breathing room if disaster strikes and they need to install XP on a new system.