Last Friday, Microsoft released its final external prerelease version of Windows Vista, the so-called Release Candidate 2 (RC2) release. I say "so-called" because RC2 is really just a random interim build of Vista, and it hasn't undergone the level of testing one might expect of a true release candidate build. But naming issues aside, one thing is clear: Microsoft intends to finalize Vista this month and will ship the product to volume-license customers in November. A more widespread launch is still set for January.

If you haven't looked at Vista in a while, not much has changed since last month's RC1 release, but a great deal has changed since Beta 2, which shipped in May. RC2 performs dramatically better than previous prerelease Vista versions, and offers a surprisingly solid level of hardware and software compatibility (at least with 32-bit versions of the product). Some compatibility issues I noted with previous builds--notably with Adobe Photoshop Elements 4.0--have been addressed, which is wonderful. Less happily, I've seen a number of ActiveX controls fail to work properly in Vista and Internet Explorer (IE) 7. This suggests that businesses will need to be careful when testing their internal applications and Web sites with Vista.

There are numerous other questions remaining with Vista, however. Last week, Microsoft publicly unveiled the antipiracy efforts it will enforce with both Vista and Longhorn Server (the latter of which is due in late 2007), and for the first time, these efforts will dramatically impact businesses of all sizes. The news, alas, is not good.

First, Windows Genuine Advantage (WGA) is being expanded to include a new feature called reduced functionality mode that will kick in when the system believes the OS is pirated. Today, when WGA detects a pirated installation, Windows XP displays annoying advertisements alerting you to the condition so that you can contact Microsoft and rectify the problem and obtain a legitimate product key. In Vista, the system still displays the advertisements, but it also shuts down most of the OS so that you can run IE for only an hour at a time and can perform shell-based management tasks. All other application functionality is turned off, including the ability to run third-party applications and open and edit data files.

Users that fail to activate Vista within 30 days will also see a number of changes. Vista features such as the Windows Aero UI and Windows ReadyBoost will simply not work. And other features, such as certain Windows Defender functionality, will only partially work. If you activate Windows, the system turns on the missing features.

For customers who install multiple copies of Windows, Microsoft is adding product activation to volume-license versions of Vista as well. Businesses with fewer than 25 client PCs can use new Multiple Activation Keys (MAKs); MAKs will be activated directly via a Microsoft public server, as are individual product keys. Businesses with 25 or more PCs, or five or more Windows Server machines, can use a new Longhorn Server feature called Key Management Services (KMS) to distribute, manage, and activate product keys across multiple machines (a version of KMS is coming for Windows Server 2003 as well).

The features together are part of something Microsoft calls Volume Activation 2.0. In a draconian move, volume-license versions of Vista will need to access a KMS-based server at least once every 180 days in order to stay genuine. And for the time being, you'll need to roll out a Longhorn Server in your environment to even use this functionality.

In short, it's unclear whether any businesses other than those already involved with Microsoft's Technology Adoption Program (TAP) will be rolling out Vista any time soon. Although I feel that Microsoft has a right to protect itself from software piracy, the new antipiracy controls seem a bit too strict and will add to the burden of IT administrators.