Microsoft has announced new controls to reduce piracy with its new operating system, Vista, due out early next year (
link here or
here).
The plan is to make some features inaccessible unless the copy is proved not to be pirated.
I speculate that pirated software has become a significant drain on Microsoft earnings. It was willing to pay that cost as long as its sales were growing rapidly and in order to establish itself as the dominant operating system around the world. But having done so in big markets like China and India where the market size is no longer growing so fast, and facing increasing competition from free operating systems like Linux, its profit maximizing strategy has changed.
I am always struck by the irony of this. In the days when microsoft really did innovate they didn't have a monopoly nor did they make much effort to establish one either through legal means (copyright and/or patent) or technical means (DRM). Now that they are established and bereft of ideas - now when they aren't going to innovate again no matters what - now their thoughts naturally turn to monopoly and how to take advantage of it. I am reminded of Texas Instruments - once an innovative electronics firm, later a useless litigation firm. Or of the legendary phone call "My lawyers say we should sue you for copyright violation. By the way - are you hiring?"
The z4 patent case gives another viewpoint of the new anti-piracy release. The z4 patents relate to antipiracy software, and Microsoft's current process was deemed infringing.
http://www.patentlyo.com/patent/2006/06/ebay_casualty_e.html
As Dennis notes, this is the optimal path of copyright enforcement when network effects are important. Let it slide when it's building your network, but when you've got a fully developed network, you don't want piracy anymore. I've a
working paper on the topic, and it (obviously) uses Microsoft as a driving example/motivation:
I meant to say, as John notes. Just read the wrong author when glancing at the page. My apologies.
