Microsoft offers 'family' discount for Windows XP

From...

By Matt Berger

(IDG) -- Microsoft is upping the discounts it will offer on its Windows XP operating system to customers who want to install the software on more than one home computer.

The company says it will give home users who purchase one copy of either Windows XP Home Edition or Windows XP Professional at full price a discount of $10 to $30 on additional licenses. Earlier in September, when announcing the new Additional Family License program, Microsoft had said the discount would range from $8 to $12.

The company is adding the new licensing option to mollify home users who will no longer be able to buy one copy of the OS and install it on multiple PCs -- something many home users do with previous versions of Windows, in violation of Microsoft's license terms. The company's new Product Activation technology makes this impossible to do without authorization from Microsoft.

When Windows XP is activated on a user's PC, it "locks" that copy of the software to the hardware configuration of the computer and issues a 25-digit activation number, which Microsoft then stores in a database. By scanning that database for matching activation numbers, Microsoft can identify when a piece of software is installed on two different PCs.

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Users can run Windows XP for 30 days before activating the software. If it is not activated in that time frame the user is not able to start the operating system.

Enforcing license

The software license protecting Windows has always stated that packaged versions of the operating system can only be installed on a single computer, Microsoft said. Product Activation is the technology that Microsoft developed to enforce that policy.

"Throughout the beta process, definitely one of the big areas of feedback was centered around product activation, and families who wanted to install Windows on more than one PC," says Rob Gruening, a Microsoft spokesperson. "Microsoft wanted to do something for those families."

Since it widely announced Product Activation in April, Microsoft has continually eased up on enforcement of the technology after testers complained that it hindered them from making significant hardware changes on a PC. For instance, when a hard drive is replaced, the software thinks it is being reinstalled on a new PC and requires the user to reactivate the software. Users can now call Microsoft for a free reactivation in that case.

Answering complaints

In July, Microsoft altered its earlier plans and announced that it would allow users to reactivate software in cases in which new hardware is installed on a PC. More recently, the company announced that 120 days after activation, Product Activation resets itself and considers whatever hardware configuration it finds to be the baseline for identification. This effectively allows a user to install the software on one PC, wait four months, and then install it on a second PC without having to obtain authorization from Microsoft. The process can be repeated 120 days after each baseline reactivation.

Customers will be able to take advantage of the family discount through retailers that sell packaged versions of the software and through Microsoft's Web store. When customers purchase Windows XP, they can also purchase additional Product Activation keys, which will allow them to use the CD they purchase for additional installations.

Retailers will make the operating system widely available on October 25, Microsoft has said. Some PC makers have already started making computers available with the operating system in their direct sales channels, such as on Web sites and through phone sales.

Microsoft announced in August that it will sell Windows XP Home Edition for $199, and $99 for an upgrade from an earlier version of Windows dating back to Windows 98. Windows XP Professional Edition will cost $299, and $199 for an upgrade.

Yardena Arar of PCWorld.com contributed to this report.