Illegal Microsoft Software?

[sajunky]

I wish Microsoft would do more about it before they decide to scrap giving bulk keys with msdn subscriptions. Abuse of the system is the primary reason we cant have nice things.

For a record I consider Royalty OEM licensing as a dumping cheap licenses as well. So they should scrap OEM licensing or bring a price to the level of retail copies (if OEM still wishes to preload Windows on their machines). It is difficult to buy PC or a notebook without Windoze and dumping cheap licenses by Microsoft is a main reason. Nothing new, it should be illegal, but it was like that from the beginning...

 

[CataclysmZA]

Msft certainly don't turn a blind eye. I know this first-hand. It was part of my job as Sales and Marketing Director at Microsoft to actively pursue illegal and unauthorised channels and shut them down. In South Africa I personally founded and launched the local chapter of the BSA in 1992, along with Autodesk. We worked assiduously to go after and close illegal and unauthorized channels to a) protect IP and copyright, and b) support authorised distributors and their dealers.

Back then it was a lot easier to go after the people selling these keys directly. Maybe you remember the takedown of PE Technologies back in 2011? That's a much easier target than people who were selling illegal copies of Windows XP/Vista/7 on the streetside in the townships.

I liased with a local software and marketing rep for Microsoft in PE as well when I was there, and there was a lot of emphasis on not only selling licenses correctly, but also sourcing licenses properly (not through Sahara like my ex-boss, which I've always suspected used grey imports to undercut the other distributors).

Microsoft makes its money selling software and related services through the authorised channels. It would be utterly idiotic for Msft to turn a blind eye to illegal and unauthorised resellers who undermine its channel-centric business model. Every single IHV, OEM, aggregator, distributor and VAD on the planet knows that.

And today that's something that no longer works. Microsoft picks its battles with sellers that they know they can target. For MSDN/Brightspark/whatever resellers, they blacklist the activation keys. For people who are just using Windows loader to get a new copy of Windows 10, they accept that it's part of the market they're in and won't be a simple thing to police, so they accept the users who may turn into legitimate purchasers from the store or Microsoft's other services one day.

When I say they largely turn a blind eye to these things, I'm not joking (and, given your history, you're probably familiar with this as well). They never prosecuted even one percent of people running pirated copies of XP and 7 in China because they knew the approach to try get everyone on a legitimate license through legislation won't work. They'll target the dealers and resellers, but not private individuals. Different strategies need to be used in regions like China and Russia. They even partnered with the Chinese government to customise Windows 10 for their region and spying needs.

I suspect that Nadella was behind the switch to generating revenue through software sales and advertising all along, knowing how many sales the Office group lost to pirates each year, and seeing that the Windows division had the same general problem, but to a lesser extent. Office 365 was his baby.

Pretty sure they wouldn’t invalidate the license as that would affect their end user customers.

They would go after the sellers which I’ve seen happen aplenty because they never stick around for very long.

Actually, license blacklists happen in waves quite often. That's why resellers typically have some line that if you have a problem with a key, get back to them and they'll give you a new one. As Microsoft figures out which accounts are being used for reselling purposes (activations get an IP address assigned to them as well as geographic location), so they slowly blacklist those accounts.

Microsoft even knows exactly how many Windows 7 installations that have cracked keys are out there, because each and every one of them pings the mothership occasionally.

It's still an uphill battle for them. They couldn't target users in the r/hardwareswap subreddit, so they had the mods shut it down and install proper rules for software sales. As that happened, more popped up offering the same thing under a different name. Policing this properly is almost impossible without tying a Windows license to an active Microsoft account - and even then there are surely going to be ways around this.

 

[Arthur]

CataclysmZA, I have no quibble with you whatsoever. I was really just adding to your good point, not arguing with you.

"Turning a blind eye": It's a tough thing to balance. Any software vendor wants to ensure legal sales, protect the authorised channel by preventing pirate resellers from undercutting the very great majority of dealers who do legitimate business ... without alienating end-users, who often are not aware that their licences are not legitimate. If a large end-user has many pirate licences, usually a friendly non-confrontational and polite chat with execs resolves the issue. Where it doesn't, and piracy continues with mgt sanction, an Anton Piller quickly gets mgt attention (as happened to a large broadcaster, for example). It is not worth the effort and expense to go after individual end-users, unless there's an identifiable community that systematically distributes and uses pirate software (such as a computer club, university residence, etc) and the revenue haemorrhage is significant. In any case, for some time now online activation mitigates (but by no means zeroes) piracy rates.

Microsoft is extremely reluctant to tackle its end-users, for very obvious and understandable reasons. In any case, unlike the film and music industry, in the volume software business that Microsoft is in the piracy problems are usually in the channel and not the end-user. Far better to look higher up the food chain than go after individual users. Especially when there are 1.5 billion end-users.

On a completely separate note, sajunky says that Msft should only have one price, ie retail price. That idiotic comment reveals a lot about his ignorance ~ either he knows nothing about business and channels, or he is being obtuse, or both. Priced into the MSRP are reseller margins, distributor margins, replicator margins (aeons ago Msft stopped making FPP in its own plant), all volume-related -- as one would expect in any business: the more you buy, the better your discount; the more of future cost (eg support) you carry, the lower your price. He doesn't seem to understand that differential pricing is required when there is a differential in development and support costs, viz large OEMS/IHVs are responsible for driver- and subsystem-support development, technical support, warranty support, etc, etc. One cannot expect them to pay retail. Their volume commits are huge, and the relationships long-standing and intimate. DSPs also carry first-tier support and are licensed only to sell with defined hardware. They have to buy off distis anway, so DSP, disti and manufacturer/replicator margins have to be built in, not to speak of rebates, short-term promos and volume commits. It's not rocket science, but it's a lot more complex than sajunky seems to think.

 

[sajunky]

On a completely separate note, sajunky says that Msft should only have one price, ie retail price. That idiotic comment reveals a lot about his ignorance ~ either he knows nothing about business and channels, or he is being obtuse, or both.

Nope, I said "they should scrap OEM licensing or bring a price to the level of retail copies". For now Royalty OEM prices are a fraction between 20 and 100 times of the retail prices (depends on the OEM). This is a hudge dumping of prices, killing any chance for competition. I wonder why competition commissions around the world never looked at.

 

[sajunky]

For people who are just using Windows loader to get a new copy of Windows 10, they accept that it's part of the market they're in and won't be a simple thing to police, so they accept the users who may turn into legitimate purchasers from the store or Microsoft's other services one day.

Yes, essentially the same what I wrote in the past that Microsoft is using piracy to gain momentum. With Windows 10 they have extra reason to tolerate piracy, as they are mining bitcoins on all user machines.

 

[Arthur]

Nope, I said "they should scrap OEM licensing or bring a price to the level of retail copies". For now Royalty OEM prices are a fraction between 20 and 100 times of the retail prices (depends on the OEM). This is a hudge dumping of prices, killing any chance for competition. I wonder why competition commission around the world never looked at.

You make a distinction without a difference.

It's absurd to bring OEM prices "to the level of retail copies", as you suggest. For many reasons, including (but not only):

* Retail licences can survive the life of the machine and be transferred. OEM licences not, so they are cheaper because their licence restrictions are tighter.

* From a IHV hardware vendor) perspective - for their own contracts and warranty to their channel - the software is part of the hardware as a single bundle and cannot be contractually unbundled without making the hardware vendor's own business very much more complicated. The hardware vendors don't want the software unbundled or contractually distinguished because many US and European laws make it very difficult if not impossible for them. A differential pricing to retail is not only sensible, it is just and proper and fitting.

* Because of the OS-hw tie, opsys support for hw-based firmware, chipsets, etc is quite complex. The burden is largely borne by the IHVs because it's their hw that needs to supported and Msft cannot remotely develop for dozens of IHVs with specs, subsystem firmware and chipsets that are constantly changing. Msft recognises that and discounts further off retail to accommodate that - it's part of good partnership and sound business relationships, which are long-term.

If Msft tried to do what you suggest it would unjust and unfair for the IHVs and for all the different types of channel involved. Their value-add, their support loads, their volumes all differ, and so the differential pricing recognises reality and works fairly.

The bottom line: Retail/FPP SKUs are in any case a miniscule part of the business. Msft makes a significantly smaller revenue per system than many people think, because (at least historically) Msft relies on OEM and channel partners for a very large slice of its business. Those relationships are of paramount importance, which is why it spends so much time and money maintaining and developing them.

(I'm trying to avoid jargon here, so others can understand. Don't think sajunky ever can as his mind was made up years ago.)

 

[itareanlnotani]

You make a distinction without a difference.

It's absurd to bring OEM prices "to the level of retail copies", as you suggest. For many reasons, including (but not only):

* Retail licences can survive the life of the machine and be transferred. OEM licences not, so they are cheaper because their licence restrictions are tighter.

* From a IHV hardware vendor) perspective - for their own contracts and warranty to their channel - the software is part of the hardware as a single bundle and cannot be contractually unbundled without making the hardware vendor's own business very much more complicated. The hardware vendors don't want the software unbundled or contractually distinguished because many US and European laws make it very difficult if not impossible for them. A differential pricing to retail is not only sensible, it is just and proper and fitting.

* Because of the OS-hw tie, opsys support for hw-based firmware, chipsets, etc is quite complex. The burden is largely borne by the IHVs because it's their hw that needs to supported and Msft cannot remotely develop for dozens of IHVs with specs, subsystem firmware and chipsets that are constantly changing. Msft recognises that and discounts further off retail to accommodate that - it's part of good partnership and sound business relationships, which are long-term.

If Msft tried to do what you suggest it would unjust and unfair for the IHVs and for all the different types of channel involved. Their value-add, their support loads, their volumes all differ, and so the differential pricing recognises reality and works fairly.

The bottom line: Retail/FPP SKUs are in any case a miniscule part of the business. Msft makes a significantly smaller revenue per system than many people think, because (at least historically) Msft relies on OEM and channel partners for a very large slice of its business. Those relationships are of paramount importance, which is why it spends so much time and money maintaining and developing them.

(I'm trying to avoid jargon here, so others can understand. Don't think sajunky ever can as his mind was made up years ago.)

Historically, you're correct.

These days, they're trying heavily to turn things into a subscription model, guaranteed (or predictable) yearly income.
They're in an almost monopoly position to achieve this - much like Adobe.

 

[Arthur]

Historically, you're correct.

These days, they're trying heavily to turn things into a subscription model, guaranteed (or predictable) yearly income.
They're in an almost monopoly position to achieve this - much like Adobe.

Indeed. That's why I qualified it by adding "adding least historically" in parentheses in the last para.

I'm impressed by your insight and understanding that the main impetus behind subscription models is revenue-smoothing, not margin. In several cases, subscription margins are considerably lower anyway, but subs do bring a greater predictability - provided you remain competitive and nurture relationships, which is why Win and Office release cadence has actually increased when compared to olden times. Msft has since forever been keen to find ways to get away from the Big Bang versioning that plays havoc with massively undulating revenue flow, which Wall St, analysts and shareholders also revile.

Even with subscription models, Msft tries hard to involve the channel where it can. At least when I was there, the last thing we wanted to get into was managing a billion accounts receivable. It's just too large, and partners do it better anyway. The traditional channel is changing in the cloudy world. OEM business on a different trajectory of course.

 

[CataclysmZA]

With Windows 10 they have extra reason to tolerate piracy, as they are mining bitcoins on all user machines.

Please tell me you don't actually think that Microsoft is mining Bitcoin on Windows 10 machines all around the world.

 

[ToxicBunny]

Please tell me you don't actually think that Microsoft is mining Bitcoin on Windows 10 machines all around the world.

Yeah he does.... partly why I find his M$ hate so absolutely hilarious

 

[sajunky]

Please tell me you don't actually think that Microsoft is mining Bitcoin on Windows 10 machines all around the world.

Microsfot call it a 'Telemetry'. It is constantly trashing users hard drives esp. when comuter is idle. If 'Telemetry were for what is specified, it wouldn't need constantly accessing hard drive, but remotely controlled botnets running distributed processing do (especially when running such jobs like cryptocurrency mining). And remember previous job of hacking sha1 certificate as well.

 

[Trompie67]

Tinfoil on special at Makro Woodmead today.

 

[ToxicBunny]

Tinfoil on special at Makro Woodmead today.

Even tinfoil doesn't help with that level of idiocy really....

 

[sajunky]

Even tinfoil doesn't help with that level of idiocy really....

Number of Microsoft boyfans urinating on the messenger doesn't change a fact that Windows is constantly is trashing hard drives and it never stops. Microsoft explanation is completely not acceptable for people who have little bit of brain and computer experience. So what Windows is really doing on your computers?

 

[Trompie67]

Number of Microsoft boyfans urinating on the messenger doesn't change a fact that Windows is constantly is trashing hard drives and it never stops. Microsoft explanation is completely not acceptable for people who have little bit of brain and computer experience. So what Windows is really doing on your computers?

Define "constantly trashing hard drives"

Drive 1: power on 9073 hours (that's 378 days).
Drive 2: power on 5621 hours (that's 234 days).
Drive 3: power on 25377 hours (that's 1057 days) - C drive that windows is installed on.

 

[ToxicBunny]

Define "constantly trashing hard drives"

Drive 1: power on 9073 hours (that's 378 days).
Drive 2: power on 5621 hours (that's 234 days).
Drive 3: power on 25377 hours (that's 1057 days) - C drive that windows is installed on.

Oh noes... you brought facts.

 

[CataclysmZA]

Microsfot call it a 'Telemetry'. It is constantly trashing users hard drives esp. when comuter is idle. If 'Telemetry were for what is specified, it wouldn't need constantly accessing hard drive, but remotely controlled botnets running distributed processing do (especially when running such jobs like cryptocurrency mining). And remember previous job of hacking sha1 certificate as well.

Windows 10 and hard drives, in my experience, get along just fine. Spinning rust in my own PC doesn't get thrashed, and the same goes for numerous laptops running Windows 10 in the house (including a netbook on the fast ring). My only experience with constantly thrashing drives comes from early versions of W10 on older devices, as well as old drives that need to have a lot of defragging done to them to move data from faulting sectors constantly (which is especially an issue for data pertaining to Windows itself).

The only other hardware fault I've come across is a faulting SATA port, or buggy chipset drivers.

If it was responding and participating in a botnet, we'd have discovered that by now. If it was doing distributed processing, white hats and security researchers in lab conditions would have caught that. If Eugene Kaspersky hasn't discovered something off by now, I think it's safe to say that the "problem" doesn't exist.

Number of Microsoft boyfans urinating on the messenger doesn't change a fact that Windows is constantly is trashing hard drives and it never stops. Microsoft explanation is completely not acceptable for people who have little bit of brain and computer experience. So what Windows is really doing on your computers?

I can give you disk access logs captured over 24 hours, but I'm not sure that would satisfy your paranoia. This is literally not a problem anymore on new computers with new drives.

 

[Trompie67]

Well, our conspiracy theorist was online earlier on, but I see he's studiously avoided this thread. :crylaugh:

 

[ToxicBunny]

Well, our conspiracy theorist was online earlier on, but I see he's studiously avoided this thread. :crylaugh:

Its cos we're ganging up on his tinfoilcrackery.... and he doesn't like that.