The Computer Blog

Sunday, October 12, 2003

Product Activation, Software Licensing, and Lost Markets

We’ve all seen the article in the news detailing Intuit’s apologies for the problems introduced last year by their inclusion of product activation technology. I was one of the people who had to deal with it. Until that point, I had been a loyal Turbo-Tax user. And really liked the program. But I wound up not being able to get the program to consistently run on the same PC even after a trip to Intuit’s tech support. I have enough hassle in my life, much of it introduced by computers, without dealing with stuff like this. Even with Intuit’s apology, I probably will not return to Turbo-Tax this year. I got good results using H&R Block’s software, and they’re not interested in playing the activation game, at least for now. I’m going to support those who don’t support this intrusive technology.

Product activation has worked for Microsoft because they have a monopoly. But has it really been effective? Users who really want to crack the technology have done so; and Microsoft’s own uneven enforcement of it—by leaving it out of some corporate versions—did nothing to make their own argument for including it. It was a technology clearly aimed at the home user. Without the monopoly to prop it up, most home users would have bolted from MS by now. Indeed, while it wasn’t the only reason I switched to Macs, it was one more straw in an ever growing Microsoft pile. I was in the business then of building and tearing down PC’s. I didn’t want to worry about whether the operating system I paid for and was using within the limits of the software agreement (one copy on one PC) could be loaded on another machine when the original one was torn down. And I did. That was enough for me. It became the deciding vote when other factors were already leaning me toward abandoning Windows.

The software industry is one of the few industries in the world that have so far gotten away with antagonizing and even abusing their customers. The institution of onerous software agreements which the customer cannot view before the sale are a great example of the kind of excess we have all let them get away with. (Product activation is another.) I was heartened by the lawsuit from Cathy Baker in California who is going after both Symantec and Microsoft and a few of the bigger software retailers. It’s standard that software doesn’t allow consumers to view the terms of the software agreement before it’s loaded on their machines and then doesn’t allow refunds after consumers view the agreement and don’t’ agree to it because the software has been opened. This is an unfair business practice; and, finally, Ms. Baker decided to do something about it. I salute her and hope she gets somewhere with that suit, even if the direct result will apply only in California. It’s the kind of customer abuse that has been blindly accepted by people sometimes unknowingly and sometimes because one feels he/she doesn’t have a choice. You simply can’t afford the money bleed some software companies would like to see.

I’m always very skeptical whenever I see projected estimates for how much money is lost each year by software piracy. Underlying those figures seems to be the assumption that all those illegal copies are taking up places in the market that paying customers would fill, and that’s simply not true. Piracy is a bad deal, that’s for sure. But I can’t escape the feeling that some of those figures are vaporware intended to legitimize the companies’ own little sidesteps of both the law and courtesy in the name of profits. Reducing prices is another way to combat piracy, but that is a tactic I’ve never seen any software alliance advocate; and it will probably be a cold day in hell before I do.

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