Microsoft to Get Tough on License Dodgers

An anonymous reader writes "PC Advisor reports that Microsoft is going to start getting tough with certain small business customers. They are going to examine their small customer license database — any discrepancies and it will call you for an audit. If you refuse it will send in the BSA and the legal heavies. "

So basically, like every other business..

[QuantumG]

which sells software. Yawn.

Back in my day...

[Bonker]

... we prosecuted extortion under organized crime statutes.

Gets Tough?

[Adambomb]

Initial notice, followed by three written notices prior to any intrusive action? I'm sorry but this does not seem unreasonable nor tough to me. Anyone in the small business league at present SHOULD be adhering to any and all licensing necessary for the software they are using TO PRODUCE A PROFIT. If they aren't, well they best not try to expand beyond the term small business at any time in the future...

Flames as follows:

In other news...

[UbuntuDupe]

Sports Crasher Monthly reports that stadiums are going to start getting tough with certain spectators. They are going to examine their person and check for a ticket -- any lack of one and they will check for proof of purchase. If you refuse, they will kick you out and call in the legal heavies.

So true

[KingSkippus]

You know, not to be a troll, but I really don't see what the big deal is. Regardless of whatever ethical problems one may have with Microsoft, if a business is using illegal copies of software, that company should be sued. Buying the appropriate licenses for software is one of the costs of doing business. If I wrote a piece of software the businesses wanted and I found out that it was being rampantly pirated, I'd be wanting to stick the BSA on them, too. I don't see why Microsoft should be held to a different standard.

If you're a business using Windows, budget for it and pay, for crying out loud. If you don't want to spend the money on Microsoft products, then use open source products instead, which have become very economically attractive and corporately viable replacements. But trying to have your cake and eat it too is just stupid.

Oh, and as a side note, not that this won't start happening in the US by any stretch of the imagination, but from TFA:

So far, Microsoft will use the new approach only in the UK, [UK Lincensing Programs Manager Ram] Dhaliwal said.

Go Microsoft!!!

[burnin1965]

This is great news.

The more Microsoft squeezes their own customers and makes it difficult and expensive to do business using Microsoft products the more these same businesses will finally open up to the idea of using open source solutions instead of consuming the spoon fed FUD from Microsoft's marketing machine.

This will result in more competition in the market where some of us can jump in and compete with the heavies in providing added value to businesses in the form of IT related services.

Go Microsoft!

Re:Threaten them with Linux

[Anonymous Coward]

Threaten my company? Ha
It would go like this.
We want to audit your Licenses
(click) hangs up the phone

A few days later
(Knock Knock)
Yes
Hi we are from the BSA
(SLAM)
I love open source

Obligation?

[Luthair]

Seems a rather odd tactic, can they really persue legal action because they 'think' you 'might' not be following their licensing? Do companies really have any obligation to allow MS to examine their hardware.

Obligatory Star Wars Quote

[Thanatopsis]

The tighter you squeeze, the more star systems that will slip from your grasp."

CAL:s is a swamp

[KokorHekkus]

Client Access Licenses (CAL) can be hard to figure out. Basically they say: you want to know the cost we will tell you since it's to complex to figure it out yourself. Microsoft themselves say:

If your company's workstations are networked, you will utilize a network server and the workstations on the network will access that server(s) software to perform certain functions such as file and print sharing. In order to legally access this server software, a client access license or CAL may be required. A CAL is not a software product; rather it is a license that gives a user the right to access the services of the server.....This guide is for reference purposes only and should not be used for purchasing decisions. Before purchasing you should visit the "How to Buy" section for each product and consult your local reseller.[1]

As I read it... without a third party (reseller who asked the "right questions" from Microsofts view) to blame for lacking CAL:s you're up the creek and the only paddle is as much money as Microsoft wants.

[1] http://www.microsoft.com/resources/sam/lic_cal.msp x [microsoft.com]

Re:So true

[Richard Steiner]

My problem isn't with prosecuting folks who pirate software, it's more with the draconian measures that the BSA is willing to take, and the apparently difficult rpocess that a company has to go through to prove that their software is legitimate. Having disks, license keys, and boxes on site apparently isn't enough.

It's so easy..

[jvagner]

..to be MS-free 2-3 years down the road for any given company. Certainly for a start-up. Linux and OS X can easily take care of much of the market. MS should consider swaying customers to continue to be customers through positive reinforcement.

I literally haven't been in a tech/management meeting where there wasn't ouright begrudgement at the mention of MS and MS-technologies.

Re:Summary is incorrect.

[DittoBox]

Summary is way off base...

From the end of the article:

So far, Microsoft will use the new approach only in the UK, Dhaliwal said.

So, MS is only targeting medium-ish businesses in the UK, after multiple letters and some data-mining techniques on their own data? What order of scare-mongering BS is this? Way to go article summary writer, you've just blown this article out of proportion. Have a gold star, courtesy Microsoft.

Does BSA give refunds for overlicenced software?

[Anonymous Coward]

I work at a company that primarily uses Linux for all development.
But all boxes even those that have only Linux installed still have Windows license stickers on them.
Will the BSA give a refund? Perhaps the refund can go to a charity, like EFF?

Re:Gets Tough?

[DM9290]

"Anyone in the small business league at present SHOULD be adhering to any and all licensing necessary for the software they are using TO PRODUCE A PROFIT. If they aren't, well they best not try to expand beyond the term small business at any time in the future..."

And if they ARE adhering to any and all licensing necessary for the software they are using, should they still consent to an audit just to put Microsoft's mind at ease?

You are very presumptuous to assume that anyone who is complying with the law would not be offended at needing to PROVE it. If I am expected to trust you to examine my physical private property with nothing other than your word of honour that you aren't going to screw around with it, then you should be willing to accept my word of honour that I am not screwing around with your intellectual property.

And if you aren't willing to accept my word. then too bloody bad. Because my actual private property rights on the physical computer system TRUMP your speculative theory that it is illegal for me to buy 100 computers without buying 100 client licenses of microsoft windows. Obviously I'm using the computers for something OTHER than your software. Until such a time as the law says a person is required to buy quantities and ratios of software as decreed by microsoft, microsoft has no power to compell anyone to comply with such an audit. And threatening that a person will suffer some kind of negative consequence if they don't wave their rights to privacy is extortion, plain and simple.

Re:So true

[suckmysav]

If you eat your cake, do you still have it?

Good grief you must be stupid.

Microsoft to Get Tough on License Dodgers

[vertinox]

Hrm... I think the editor made a mistake.

It should be "Microsoft to Get Tough on Paying Customers"

Seriously, with all the Windows Verification in force we are lucky to be able to swap a network card without having to call Microsoft to get re-authorized.

Re:Cringely

[Richard Steiner]

What about music? :-(

Re:So basically, like every other business..

[JimDaGeek]

Like "any other business"? Are you on crack? Name the last time you went to a restaurant and had the restaurant company come to your house to "validate" what you are eating? How about the last time you bought a car and Ford, GM, Toyota, etc. came to "validate" your car and how many drivers you have in it or what gas you use? Oh, what about your auto insurance company? When what the last time they came out to "validate" how many miles you drive to work (which does determine your rate)?

Nope. Most companies do not get away with what MS does. Only a monopoly could. I guess you are too young to remember when you couldn't _buy_ a phone? I am not. I remember having to lease phones! Just like we have to "lease" MS Windows.

If you only want to stay in the software world, well, tell me the last time Apple sent out cronies to "police" their install base? Or how about Red Hat? The only companies that can get away with abuse like MS are monopolies.

Too bad MS got off with only a smack on the wrist for their last monopoly conviction.

Please stop making up excuses for the crap that MS does. They are a really nasty company that needs to go down hard.

Re:Go Microsoft!!!

[burnin1965]

"Customers" who don't pay are not customers that any business wants.

There is no reason to put customers in quotes, if you RTFA you would know that they are going after customers.

"Microsoft is hoping to 'spark off the engagement' with its customers",

"Microsoft keeps purchase records for volume-licence customers, and those lists can reveal usage inconsistencies",

"At that point, if the customer point blank is refusing and or telling us he doesn't want to talk with us and we are seeing this large discrepancy, that's when we will engage the BSA"

If you pirate 100% of your Microsoft software then you probably don't have to worry because you will not be a registered customer of Microsoft AND it gives the BSA less legal strength to audit you because you haven't signed up to the EULA which gives them the right to shake down your business.

Don't get me wrong, I agree that customers who pirate your software can be a bad thing and shouldn't be tolerated, but what Microsoft does truely is a shake down. When they sent the BSA into my area they didn't even bother going through a list of customers. They acquired a list of ALL businesses in the area and carpet bombed the place with threatening letters to scare up some business. I know this because one of the businesses was a small Vietnamese restaraunt that didn't even have a computer let alone any Microsoft software.

Who says that "customers" who don't pay for their software from Microsoft are going to be any more likely to pay for OSS?

Who said anything about making people pay for OSS? One of the primary means of making money off OSS is by providing a service. Its a bit harder to pirate services, I guess you could try to enslave the people providing the service.

it certainly says something about the state of OSS when people have the choice of using MS software illegally without paying, will choose that over using OSS legally without paying. What this says to me is that many companies would rather risk a lawsuit than use OSS software.

Well, I'm certain it says a whole lot more about marketing and illegal monopolistic business tactics than it does about choice. The sad part is that many of the companies that Microsoft shakes down aren't big hardcore pirates who intentionally steal from Microsoft, it has more to do with poor management of a confusing licensing system and maintaining long term records to prove you did pay for what your using.

I'm just curious if all those paid for TCO studies that show how cheap it is to use Microsoft software in your business take into consideration the cost of 1) maintaining perfect records in case your audited, and 2) the cost of going through an audit of your software while your trying to run your business, or 3) having to just pay Microsoft for the number of licenses which they "suspect" you need just to get them off your back.

Re:Cringely

[shark72]

"BTW, why is it that software is the only product where supply and demand and mass production rules don't apply? Everything else that is mass produced comes down in price, software stays the same or gets more expensive."

Lots of people don't understand the "...and demand" part. Sure, lots of us would like Adobe or Microsoft to sell software for five bucks, and perhaps many of us would only pay five bucks for the latest wares from Adobe or Microsoft. But if there is sufficient demand at a higher price, that's the price at which they will sell it.

Many folks (at least here on Slashdot) think that the ideal point on the supply/demand curve is the point where the product has the most customers. The reality is that it's at the point where the company makes the most profit. Finding this point on the curve that works for your business means understanding the market size, knowing who you want as your customer, and who you don't want as your customer.

More to the point: PhotoShop is $650. Enough people want to buy it at that price to allow Adobe to have a really nice building -- you should see their lobby! Sure, The Gimp is free. But even at free, it's not good enough for a critical mass of users. Lots of Slashdot armchair economics experts don't get this; they parrot the "supply is infinite thus value should be driven to zero" nonsense. Meanwhile, Adobe continues to do quite well selling a few bucks' worth of CDs at $650 a set, while you will have to look far and wide to find any serious designer who's foregone PhotoShop in favor of The Gimp.

Re:So true

[porkface]

"Has the EULA ever been tested as a binding contract? Is it set in stone that an EULA is legally binding?"

Are you prepared to test it?

Re:Gets Tough?

[Adambomb]

You are very presumptuous to assume that anyone who is complying with the law would not be offended at needing to PROVE it. If I am expected to trust you to examine my physical private property with nothing other than your word of honour that you aren't going to screw around with it, then you should be willing to accept my word of honour that I am not screwing around with your intellectual property.

Something I do not understand is this feeling of entitlement with regards to not being offended. If its offensive, do not give them your business, if you're looking to convince people they SHOULD be offended, do so. I see nothing here that isnt "its too much of a hassle" type argument. If its too much of a hassle, use different software.

I hate to break this to you, but honour and ethics do not go very far in court. If you're a business of any size, you best be ready to handle the risks associated with the software you choose. Opportunity costs exist.

Re:So true

[Itninja]

EULA logic:

1: Retail stores are not required to (and usually do not) accept open-box software returns
2: In order to actually read the EULA, you must open the software box
3: You must accept the EULA to use the software
4: If you do not agree to the EULA, you are instructed to promptly return the software to the store
5: See 1

Re:So true

[TimTucker]

Remember that, at least in the US, the evidence must prove guilt beyond a reasonable doubt. If you have original media, CD-cases and CD-Keys -- all the mechanisms of Microsoft's license enforcement -- it is unlikely that a jury will find in the BSA's favor for lack of purchase records.

Reasonable doubt only applies for criminal cases, though, not civil. I'm sure that Microsoft has more than enough lawyers to file a few civil suites.

BSA audits are argument against EULA enforcibility

[Sloppy]

There's a clause in the EULA where you give Microsoft or it's agents the right to come in and audit you at any time, at your expense.

I feel like a fool, because as I mention here [slashdot.org], I don't see that clause in here. [slashdot.org]

But let's assume that I didn't read it carefully, and the EULA really is how Microsoft obtains that right from their customer. If an audit requirement is in the EULA, then that's a strong argument against EULAs being enforcible. I'll explain...

One of the problems with EULAs, is that there's never any proof (or even evidence) of the contract. Microsoft doesn't have your signature on file. EULA proponents say that the agreement is implied by the presence of the software. Ok, but even if we accept that, where's the externally-visible evidence?

Two users buy a bunch of computer components and put together their computers. User 1 then buys a copy of MS Windows and installs it, thereby agreeing to the contract (according to EULA proponents). User 2 installs Linux; he never bought a copy of Windows, never had one, and never even implicitly agreed to any EULA.

From the outside, these users appear identical. Supposedly, Microsoft has a contract with one of them and not the other, but they don't even know. You can't even determine who agreed to the EULA and who didn't without an audit! But the Linux user, even according to the most rabid Microsoft apologist, never agreed to a Microsoft EULA or a BSA audit.

How can you invoke one of the terms of a license, before it is known whether or not there ever was a license?

Using licenses to support BSA audits, begs the question [wikipedia.org] as to whether or not the user consented to an audit.

Re:So true

[guaigean]

They're not the only GUI toolkit developer in town ya know...

"any discrepancies" -- so, everyone then?

[Kris_J]

Software that won't register on-line. False positives that turn on nagware saying that the copy of Windows that came with your Dell is counterfeit. Software that de-registers when you take your laptop out of its docking station. You just know that every company with a Windows PC, and probably quite a number without, will be considered by MS to have some sort of "discrepancy".

Re:So true

[Bitsy Boffin]

BSA is willing to take, and the apparently difficult rpocess that a company has to go through to prove that their software is legitimate

Here is how you deal with the BSA if they ever come knocking...

BSA Guy: "Hello, I'm with the BSA, we would like to come in and do an audit to ensure that you are not running any pirate software. It's a good thing. Really."
You: "No. Please leave this premesis now."

That's it. The BSA is a private organisation. If they want to go snooping through your computers then they can bring a police officer and a search warrant like everybody else.

Missing point

[HPNpilot]

You are completely missing the point. The BSA is looking to make money by getting a "settlement." If you refuse to do this they will sue and it will cost you a small furtune to even GET to a jury. It could cost hundreds of thousands of dollars in legal fees, not to mention lost productivity. This is what they hold over your head! Either give us $30,000 or we sue you and even if you win you lose far more than that.

As they collect these settlements they use that to force other companies into settling.

Re:So true

[mollymoo]

Bailifs have some faily wide-ranging powers, but they can only operate with a court order. The BSA would need to win its court case first, which isn't likely to happen unless they have some actual evidence.

Re:Missing point

[HPNpilot]

Every company has legal representation but that is not the point. Most companies are not in the legal business and to take on a fight in that realm costs a lot more than legal fees, it takes the company away from their focus and gets them stuck fighting a stupid lawsuit. If you have never been involved in a corporate lawsuit there is just no way I can fully explain it but the time it takes away from key personnel is simply enormous. At one company they were pretty clear that each developer and project manager was expected to bring in ten times their salary in gross income. This was in NYC where a lot of the crew made $80-100k. So the company expects one of them to be bringing in $800k-1M a year in revenue... now that may give you an idea of how expensive a lawsuit can be if they tie up a lot of people reviewing unending paperwork. They can kill you on the opportunity cost alone. This is why the lawyers you are so quick to have come to your defense will tell you that you are better off settling. And if that is the advice of your experts, you may even have a fiduciary duty to your shareholders to follow it.

Re:So true

[thePowerOfGrayskull]

When M$ tries to pull this lark on them, you can pretty well guarantee that 9 out of 10 will switch to open source, whether they had to pay or not.

What dream world do you live in? You have your stats backwards -- 9 out of 10 will do whatever is required to end it quickly and quietly, since they are not in business to Fight for a Cause; nor do they want to undertake the risk/expense of switching operating systems.

Re:Gets Tough?

[argStyopa]

No, that part of the process isn't onerous.

However, if you're a small business owner that consents to an audit (because you do have licenses for everythin) and then finds out that merely having the original media, license, and certificate of authenticity is INSUFFICIENT and you have to essentially re-buy everything to comply? Would you agree that's somewhat burdensome and/or unfair?

Re:So true

[rtb61]

I live in a world where I have worked with small/medium business people, they are in a small business because they are an independent lot and they do not like working for others.

M$ has made this identical announcement a few years after the B$A started and targeted a few small computer/software businesses for marketing purposes before quietly backing off (long before actually targeting no computer/software orientated businesses, they even offered rewards for employees to inform on their employers).

I'll give you a hint, I tell my suppliers what to do, the supplier does not tell me what to do, else, they will not be my supplier for much longer. When your nothing but an overhead, you mind your manners otherwise regardless of the inconvenience you will be replaced.

Besides I want M$ to do it, the more aggressively the better, go ahead kick down those doors and start issuing commands to your customers, I dare you ;).

Re:So true

[Anonymous Coward]

>Not Considered Valid Proof
> -Certificates of Authenticity

If a MS Cert is not valid proof, then what the fsck good is it?

Re:Missing point

[cayenne8]

"Any company that cannot afford lawyers in a situation like this should just close their doors now and save themselves the trouble. "

The majority of companies in the US are small businesses....and I'd dare say many of them operate on a fairly strict budget that doesn't have room for lawyers. I doubt that many businesses would be suspecting to get housed by MS and the BSA...they usually expect the computer they work with comes with the legal software they are entitled to run...along with software they purchased (at least the honest companies). They certainly don't expect to get hassled or sued for buying and using a computer and software.

Budgeting a lawyer fee as overhead for commodities needed to run a business (computers, etc), isn't something that is in the business plan of a small company, nor should it be.