Microsoft to ease part of licensing pain

People hate hassle and keeping track of software licences is often a supreme hassle. Just ask you network administrator. Microsoft is out to ease part of the problem by simplifying the licensing of its Windows DNA 2000-based solutions, according to the company.

Many software packages, and DNA was no exception, are licensed based on what is called a client access license (CAL) . A CAL requires a licence for each individual user. The trick in any large corporation is to keep track of who is using what. Too few licences, and your company can face legal action; too many, and it is throwing money down the drain.

So instead of licensing the user, license the machine. Or more specifically license the actual processors.

“We are moving to per-processor licensing from a traditional CAL licensing,” said Michael Flynn, developer tools marketing manager at Microsoft Canada Co. in Mississauga, Ont.

Customer demand lead Microsoft to restructure the licensing for the Distributed Internet Architecture (DNA) group of products. Included in this line are a number of application servers designed to create e-business solutions, including Microsoft SQL Server 2000, Host Integration Server 2000 and Biz Talk Server 2000.

“When you think about it, when you do per-processor licensing, you basically eliminate the administration of licensing,” Flynn said.

He continued by explaining that using traditional licensing methods is becoming increasingly difficult. With e-business dramatically widening the scope of people who might be accessing a company’s services (for example partners on a project using company tools might have to be licensed), the amount of effort required to track all software use is quickly becoming Herculean.

This new structure will make network administrator’s lives easier, Flynn said. If a company licenses four processors for its SQL Server, that’s it.

“So today I am a company with 500 employees, next month I buy a company, now I have another 500 employees, I don’t need to worry about any licensing (since it is the server that is licensed),” he said. “It completely removes the worry all together.”

easy licensing, no pirating?

Will reducing the hassle of licensing a company reduce the likelihood, intended or not, of software piracy? And how often is worry part of the equation?

“Ya know, I pirate stuff all the time… I’ll be damned if I pay $2,000 for Windows 2000 for my server at home,” stated an Internet posting from Bad Syntax. One can safely assume these actions and feelings are not unique.

Recently released statistics from CAAST (Canadian Alliance Against Software Theft) state that Canada is one of three countries where piracy is on the rise, albeit only slightly. Forty one per cent of business software applications are pirated, according to the fifth annual independent study on global software piracy. This is up from 39 per cent in 1997 and 40 per cent in 1998. Belgium and Portugal are the other two offenders.

Allan Steel, president of Toronto-based CAAST, said though the methodology used in the survey is excellent, whether you agree with the numbers is not the point. The identical survey done in the United States puts its piracy rate at 25 per cent.

Do we pirate because we want to save a few bucks or do we do it because it is easier? Most software companies agree with the latter since to do otherwise would be to admit their products are overpriced in the first place.

Diana Piquette, piracy manager for Microsoft Canada said the solution to piracy rests in awareness and education. She said high piracy rates are most often in countries where intellectual property does not have a strong tradition.

Steel agrees with the intellectual property judgement but is not too sure software companies are right about why software is pirated. “The unfortunate thing is that people don’t understand the value of intellectual properties,” he said.

Steel also made it clear that he disagrees with the notion that people pirate software just because it is easy. After all, little is easier than downloading a legal copy from a corporate Web site or ordering a shrink wrap on-line, he said.

He also added that honest buyers should be more irritated that they are partially subsidizing those who pirate, since he admits software manufactures do increase price to reflect lost revenue due to pirating.

how much does piracy cost?

The is no question substantial revenue is lost to software piracy, but exactly how much is a debate. It becomes a statistical duel where numbers are parried about.

“If we simply move the Canadian piracy rate down to the U.S. it would mean that there would be an economic stimulus of…$2.5 billion,” Steel said. He added that this represents over 22,000 more jobs and over $650 million in tax revenue.

But the contrary argument says many who get pirated software would not purchase the full priced legal version and instead do without. Thus the numbers are much, much lower.

“That is a very valid point,” Steel agreed. Though he went on to say bringing down the price of cars wouldn’t necessarily bring car theft to an end.

No company is going to go on record saying that it pirates software, nor admit that software prices might tempt it to pirate. There is no point in putting a bulls-eye on your corporate headquarters.

Lawrence Weinberg, partner at Toronto-based law firm Cassels, Brock and Blackwell said from a legal perspective, pirating software is a breach of copyright much like copying a CD or video. Not surprisingly, his firm always makes sure it has the right number of licences. “Something like our shop wouldn’t ever take the risk…of the bad publicity or fall-out of using pirated software,” he said.

catching the pirates

So, outside of being blazingly stupid, how do pirates end up getting caught? Well often enough, being blazingly stupid is the key.

“The Internet can be a great publicising of talent but also can be very revealing,” Steel said. He cites the example of a company which claims on its Web site that it can get the job done quickly and efficiently because it has 45 experienced developers. When software manufactures check records they find the company has only two licences.

Another way pirates are grounded is through the use of 1-800-snitch lines. Many companies (Microsoft and CAAST included) have an 800 telephone number employees can call to ease their nagging conscience. “There are a number of people who understand intellectual properties and feel extremely bad having to be put in a situation where they are doing something illegal,” Steel said.

Companies are also becoming more proactive in their methods of software security. Microsoft Office 2000 retail version will have code embedded that will require users to register their copy within the first 50 uses. If it is not done it will no longer launch. If a user tries to register a pirated version the serial number will either be invalid or previously registered, thus denying the pirate the ability to load the program.

Microsoft’s Piquette said a test run on Office 2000 in Australia was successful, with sales increasing 25 per cent. But she agrees it is a game of cat and mouse. Once a new secure method is designed, there is a hacker out there with the code to break it. All for free on the Internet.

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Jim Love, Chief Content Officer, IT World Canada

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