The Truth About Windows Genuine Advantage

By David Worthington and Nate Mook, BetaNews

May 13, 2005, 1:24 PM

Windows Genuine Advantage will soon require all Windows users to verify their license before downloading updates, but the program has sparked concern and confusion from customers. BetaNews sat down with David Lazar, Director of Genuine Windows at Microsoft, to clear up misconceptions and sort fact from fiction.

BetaNews: Let's start with some basic background information on Windows Genuine Advantage (WGA) for our readers such as why it was developed, its purpose, etc.

David Lazar: We recognize our position as trend setters in the industry. Piracy is a big industry problem. The IDC's annual piracy study estimates 29 billion dollars of worldwide losses due to piracy. Something like 1 in 3 users worldwide is using some pirated software or counterfeit software. So, it is a large industry problem.

In the olden days we did copy protection. I think it is very clear that customers did not want copy protection and so we think that the approach that we have with activation and Genuine Windows validation is quite appropriate.

Obviously we can try to reduce the incidents of counterfeit software, but the real challenge for Microsoft having tried a bunch of what we call sticks in the past, now we want to improve the experience of customers to get them more excited about genuine Windows. It's really a balance between having some form of enforcement, but really focusing on making a more interesting, more exciting and more desirable Windows experience for those customers using genuine Windows.

We started the program last September in the US and we decided to make it opt in, which means that customers could choose whether or not to participate. And we said that at some point in the future it may be required and in fact in January we announced that in mid-2005 it would become required. So we have given people a lot of time to get used to the program.

What we have seen in terms of participation has amazed us, and that is that our opt-in rate has been above 56% - at times as high 60%. And for certain downloads, specifically the Windows AntiSpyware, we have seen opt-in rates as high as 70%, which tells us that customers are really interested in knowing if they have genuine software and to see if they will get special benefits from having this genuine software relationship with Microsoft.

BetaNews: Why is WGA needed, is Windows Product Activation not successful?

David Lazar: That's a great question Dave. So there are a couple of reasons that WGA is helpful. Number 1 is kind of the reminder thing. Sometimes you take things for granted and forget the value of the good things that you have in your life, so Microsoft comes back with a reminder to check and see if you are running genuine software. And then you receive benefits to thank you for continuing to run genuine Windows. You activate once and you are done with it, so this is kind of a lifecycle reminder.

The next thing is that there are holes in activation. For example, in Russia, they have figured out how to hack Windows to get around activation - so end users could end up with a copy of Windows that does not have to activate. They would never have the opportunity to know about genuine Windows and take advantage of the benefits of genuine Windows.

BN: System files were modified to get around WPA?

Lazar: System files were modified. There is also a large counterfeit business that is built on the volume license key where someone gets a hold of a corporate volume license key and passes that around.

BN: Right now the project is more aggressively implemented internationally and is still opt-in in the US - why is that?

Lazar: Actually, it doesn't have to do with the US as much as the fact that English is a worldwide language in many ways. We see the usage of English all around the world. When we implement something in English, since we are basically a Web-based program, the impact is like 70% to 75% of users worldwide. And we have to be careful when we do something in English that we are ready for a worldwide roll out.

The current program that we just rolled out this week, the pilot of the Genuine Windows offer, is specifically limited to the US. You do have to do a dropdown and say that I am located in the US in order to take advantage of the program. In general if we put something up on Microsoft Update or on the Download Center, then that's going to hit a majority of customers worldwide.

BN: Is the main problem piracy committed by OEMs, street vendors or end users?

Lazar: We think more about counterfeit because we made a very conscious decision several years back to not really focus on end user behavior, but to think about this more as a systemic problem in our distribution channels and our distribution policies. So we really focus more on counterfeit than on the broader term "piracy."

That said there are some very sophisticated channels for the distribution of counterfeit product. At the end of the day you know Windows is a somewhat valuable commodity and the crooks out there in the world realize that. If they can come up with a counterfeit or a really good counterfeit it is like printing up $100 bills for their business.

In some cases in more developed markets like Europe and the US, you see very sophisticated counterfeits where you need a magnifying glass to tell the difference. Customers will see on the Internet a spam that sells Windows for what looks like a good price, like $89, and it's a manufacturer's close out. Well that is definitely a counterfeit version because according to our license you cannot buy a so-called OEM version of Windows without buying the computer itself from the OEM. So, that right there should be a red flag.

BN: Or you can just buy a power cable.

Lazar: That is correct. If you have to buy something from the manufacturer then it could be a power cable or a mouse. That is in the case of system builders.

In some less sophisticated markets or in some places in the US, you can find disks with handwritten product keys or some very unsophisticated stickers that look like they were homemade that have product keys on them - those are obvious fakes. They might be available in some seedy spot where the customer really doesn't have a whole lot of expectation that they are getting the real thing.

But as I said, there are some very sophisticated counterfeits out there. We have, as part of our education campaign, a great Web site called "How to Tell." It has pictures of what the counterfeits look like and it explains the hologram. There are actually counterfeiters out there that are creating holograms that look like our hologram CDs. And the holograms that we do are actual silk screens in the media – they are not stickers – and so far the counterfeiters have done all stickers. If you see a hologram with a sticker you know that it is a fake.

BN: How have customers responded to the program, has it been successful?