Anti-Piracy Angela Morrow Anti-Piracy Marketing Manager Allen Nieman Technical Product Manager Microsoft Corporation

How does piracy hurt your customer? Higher total cost of ownership Lack of technical support Software incompatibilities Poor quality software Damage to reputation Exposure to liability risk How does piracy hurt your customer? Piracy creates a higher total cost of ownership due to: Lack of technical support Software incompatibilities Poor quality software higher chance of viruses incomplete code lower quality CDs, from poor manufacturing process Damage to reputation Exposure to liability risk

What is Microsoft Doing? Enterprise Small/Medium Business Improved Technology Enterprise Direct Contact ACE Reviews LPA Program Software Asset Management Guide Small/Medium Business Supporting BSA Truce Vertical Market Campaign Improved Technology Product Activation

Enterprise Customers

Direct Contact Engage the customer Possible AP involvement Face to face Email/letter/calls Possible AP involvement Self Audit/License Analysis

ACE Review Program When internal discussions/reviews aren’t working Friendly “audits” Independent auditors Full review/Mini-review ACE = Awareness, Compliance, Education 5 Day -Test PC Sample -Report estimated Non Compliance -Educate on SAM -IT/Purchasing/Execs.

Small/Medium Customers

BSA Truce FY01 Results Truce market growth 200% greater than control markets Touched 1.8 million business decision makers Drove $39 million in incremental revenue in 1st 3 quarters

BSA Truce – FY02 Q1 Campaign Timing: July 1-31, 2001 Markets: New York, Portland, Atlanta, Kansas City, and Oklahoma City (~800k) Q2 Campaign Timing: October 1-31, 2001 Markets: Cities TBD (~800k)

BSA Truce BSA Activities Radio, 2 waves of Direct Mail, PR BSA End User Settlements Microsoft Support Direct Mail, Opt-in Audio and Video Email, Banner Advertising Key Influencer Engagement: BBB, SBA, Mayoral Proclamations Channel Participation

Channel Readiness Kit Available mid July Resources Marketing Templates to Customize BSA Truce Letter SAM Guide CD Product Activation Instructions CD w/templates And more… So, what can you offer? Many resellers and solution providers are beginning to provide SAM Consulting Services for their customers. Such as how to analyze and draft SAM Policies, License Reconciliation Services and of course Educating your customers about software and licensing. Internal auditing services are another benefit to the customer as it is complicated and costly to perform an internal audit and even more costly if a third party such as the BSA, comes in to audit and follows up with potential penalties. And of course following up with a licensing proposal that both, gets the customer compliant and brings them up to date on technology.

BSA Truce - Channel Channel Engagement Direct Mail Template Email Templates Talking Points PowerPoint Presentation Suggestions for Tools/Resources/Support?

Vertical Campaign Q1 Accounting Hi-Tech Timing: Q4 Microsoft DM Mailed mid-June Target: National ~250k Hi-Tech Timing: Q4 Microsoft DM to Mail mid-June Target: National ~600k

Software Asset Management Guide Write SAM policies and procedures for your customer regarding acquisition and storage of software Communicate the policy clearly to your customer’s employees who purchase, manage, or use software Better yet, help your VARs be the software asset manager for their customers microsoft.com/piracy/samguide/ Microsoft offers various tools to help YOU help your customers. These tools will help your customers write SAM policies and procedures regarding acquisition and storage of software, And communicate the policies clearly to employees who purchase, manage, and use the software. Better yet, you can be the software asset manager for your customers. Keep records of their purchases, develop policies for software use, purchasing, and license management. And, even train employees on these policies. This website, www.microsoft.com/piracy/samguide/ contains various tools that will help you accomplish the above tasks.

Microsoft Software Inventory Analyzer Available NOW! microsoft.com/piracy/msia

Microsoft Resources microsoft.com/piracy/ Piracy Basics MSIA Tool SAM guide How to Tell Product Activation News microsoft.com/partner/licensing/antipiracy These are several Microsoft website where you can find more information about piracy. http://www.microsoft.com/piracy/ The main Microsoft Piracy site offers you information on the basics of piracy and a gateway to other resources. http://www.microsoft.com/piracy/samguide/ The samguide site (as stated earlier) contains several tools that help assess a customers’ risk of being non-compliant, tools on how to conduct a software inventory, extensive licensing information, and policy development. http://www.microsoft.com/piracy/howtotell/ If you or your customers are wondering if their software is genuine, this site offers descriptions and pictures of what genuine software should look like. And what to look for to make sure the software is properly licensed. If your wondering what Microsoft is doing to fight piracy, visit http://www.microsoft.com/presspass/newsroom/piracy/ This site contains several press releases on piracy cases that Microsoft if fighting as well as other organizations such as the BSA. And last, the http://www.microsoft.com/directaccess/products/piracy/ site contains tools to help you get involved in the various Microsoft Anti-Piracy Marketing campaigns.

Report Piracy (800) RU LEGIT or (800) 785-3448 piracy@microsoft.com Business Desk Email piracy@microsoft.com Write “Business Desk” in the subject line Bid must exceed $20K The Microsoft's anti-piracy hotline currently receives approximately 7,500 contacts in North America each month. Microsoft investigates every report of piracy it receives; however, the ability to follow-up on leads varies with the quality and completeness of the information provided. The more information you can provide, the better Microsoft will be able to address the report of piracy. If requested, Microsoft will keep your identity confidential when investigating reports of piracy but the investigators may need to contact you to obtain additional details about the report. Microsoft also promises never to use your information for any other purposes other than to follow-up on its investigations of software piracy. The Business Desk is designed specifically for resellers. If you feel you’ve been substantially under bid and suspect that your competitor may be distributing pirated software, email piracy@microsoft.com and write “Business Desk” in the subject line. Include as much information about your competitor and the customer as possible. For other manufacturers’ software products contact the BSA at (888) NO PIRACY.

Anti-Piracy and Licensing Technology Allen Nieman Technical Product Manager Licensing Technologies

Agenda Licensing technology overview Microsoft Product Activation for Windows XP Demo Customer segment details

Mission To reduce intellectual property abuses Outright Piracy Corporate over-installation and under-purchase By aggressively enforcing licensing terms Software-based technologies Separation of media from license

Key points Piracy is an industry-wide problem Casual copying is significant Activation targets casual copying Also targets cloning Product Activation is not new Pilot in 7 countries with Office 2000 WW with Office XP and Visio 2002 Activation strikes a balance Key themes Piracy is an industry problem Product activation is not “new” Striking a balance between IPR and Fair use Customer acceptance is key End user privacy is protected End user experience – activation is easy As much effort to not do it as it is to do it Goal is to reduce casual copying – not stop all forms of piracy Licenses acquired through VL do not require activation

Key points Microsoft absolutely, 100% respects the end user’s privacy Significant improvement over previous companies’ AP Efforts No dongles, diskettes required Anonymous Natural part of product setup Quick & Easy via Internet – 4 clicks! Little impact on volume licensing customers VL licenses do not require activation VLKs are now required though Key themes Piracy is an industry problem Product activation is not “new” Striking a balance between IPR and Fair use Customer acceptance is key End user privacy is protected End user experience – activation is easy As much effort to not do it as it is to do it Goal is to reduce casual copying – not stop all forms of piracy Licenses acquired through VL do not require activation

Product Activation for Windows Cross-Microsoft technology Can activate during or after setup Can skip activation for 30 days Reminder at each logon after setup Reminder periodically when logged in If not activated after 30 days Nagging reminder every 15 minutes If logged out, must activate after logging back in Activation is completely anonymous Retail product allows activation on one PC Unlimited reinstalls on the same PC Implementations across products vary slightly Goal is to reduce piracy while making the user experience as simple and straightforward, and neutral as possible. A response of “that’s it?” is what we’re looking for here. Product activation strikes a balance between Microsoft’s desire to protect its IP and an acceptable user scenario. We believe we have achieved that balance with our implementation. Office 2000 pilot in seven countries (Australia, Brazil, Canada, Hong Kong, New Zealand, PRC, USA). Over 7 million activations to date in the pilot countries. Office XP an Office XP family products (visio, project, FP 2002) will require activation as will Windows XP Home Edition and Professional Edition. Due to their unique deployment requirements, customers acquiring their licenses through one of Microsoft’s volume licensing programs will not be required to activate their licenses.

How Does PA Work for End Users? User/Client Device Clearinghouse Unlock Install, User enters use product key: GKW9D-8G6XY-6WC3Q-QHV2J-G8DKL License Certificate and Product ID (ex 98765-123-7654321-12345) generated Processes Installation ID 114236-445649-527... Verifies business rules User prompted to activate, 30 day grace period, then required to activate User Selects Method: Internet Telephone Installation ID (PID + HW Hash) created and sent (50 digits): 114236-445649-527565-495949-094832-394857-142943-298474-76 Returns Confirmation (42 digits): 123874-567318-524495-847384-394839-948392-938293 This slide builds through the discussion to accent the process. There are two important sides to the equation; the user with the client device and the Microsoft Clearinghouse The customer first enters the product key during product installation. During activation or use, the product will ask the customer to activate. For applications like Office, the customer has up to the 51st launch to use the product before activation will be required before further use. For Windows, the customer is provided a 30 day grace period to activate. The customer selects a method to activate from; either Internet or Telephone The Installation ID plus any registration information is sent to the Microsoft License Clearinghouse and processed. A check is done against the product ID to ensure that it hasn’t been used against more pieces of hardware than defined by the EULA> If all is good, confirmation is sent back to the client device and the user is set to use the product indefinitely. Confirmation Received (42 digits): 123874-567318-524495-847384-394839-948392-938293 Content activated, License Certificate updated

Demo – Windows XP Activation The hardware ID components are strictly confidential.

User experience Ease of use and clarity of purpose are required to obtain user acceptance Ease of use Straightforward and easily navigable UI Short and simple activation process Clarity of purpose Required information clearly identified EULA and box notification In any DRM, user acceptance is key

Protecting user privacy Protecting user privacy is a design goal Activation is NOT registration Activation: Required for continued use of the product Completely anonymous No personally identifiable information required Registration: NOT required for continued product use For receiving customized benefits By definition requires personal information

Channel details Retail FPP Activation required Install on one PC allowed EULA unlikely to change from Windows 2000 or ME in this area Cannot be used for volume license bulk deployment Packaging Changes Box notification EULA

Volume Licensing Customers Can no longer use Retail FPP CDs Volume License Product Keys (VLKs) will not work with Retail FPP CDs Multiple Installs cannot be completed Select CDs or WWF CDs must be used Select CDs not “pre-pid’d” VLK is required and can be automated Volume licenses do NOT require activation I will break this out Open from Select and EA for purposes of the DISTI deck.

Open License customers New purchasers obtain VLK from eOpen license confirmation Existing Open license customers with active Windows Upgrade Advantage will be sent letters Letters to be sent around RTM Will contain instructions on how to get VLK for use with WWF CDs

Select, EA, Campus and School Agreements New customers get VLK on their acceptance letter Existing customers get VLK by calling Microsoft Letter will be sent notifying customers of the VLK requirement