Why Microsoft Is Letting You Pirate Their Software

Richard Fang


For decades, the tech giant fought against pirated copies of its software.

Microsoft is one of the few enterprise companies that began decades ago and still remains one of the largest tech giants to this very day. Even with its many tech wars, it has survived the test of time where many of its peers have faltered.

However, one of its earliest tech wars that it still faces to this very day is against pirates. These software pirates have sold counterfeit copies of Microsoft products in the millions or uploaded the product on torrent sites.

How much has piracy cost Microsoft?

There isn’t an official number of how much piracy has cost Microsoft, but it is very safe to say it’s in the billions of dollars.

Instead of touting their own numbers (which would be a PR killer), Microsoft has adopted to educating the cost that pirated copies of software can cause to businesses and consumers. According to some older research done in 2014, Microsoft released a study done alongside research firm IDC and the National University of Singapore.

This report uncovered that consumers worldwide would spend $25 billion and waste around 1.2 billion hours (fixing issues) in 2014 on pirated software.

On the other side, companies will spend half a trillion dollars fixing their own issues with downloading pirated software. These issues range from maintenance to malware and viruses.

Microsoft’s policies against piracy

Microsoft has historically been on the offensive in its war against piracy. It has even done raids in Mexico to take down cartels selling its software to the masses.

Recently, however, it has become much more relaxed on its policies against piracy. When TechRadar reached out for a PR statement around the issue in 2019, what they found was a generic passive response, as shown below:

“We encourage customers to purchase genuine Windows and Office 365 from Microsoft or from one of our trusted partners. According to industry experts, use of pirated software, including non-genuine Windows and Office 365, results in a higher risk of malware, fraud public exposure of personal information, and a higher risk for poor performance or feature malfunctions.” — Source

Funny enough, if you go to their page (this is the APAC version) to report pirated copies, what you are given looks like a page out of a Windows XP manual.

There is no way to submit anything, and you’re forced to give a call if you genuinely want to reach out to someone to report a case of piracy.

https://img.particlenews.com/image.php?url=1FrKhj_0XvmBO2400Source: Microsoft Singapore Validation

Additionally, if you dig deeper into the website for piracy policies that Microsoft concocted in the early 2010s, they have now all disappeared or remained not updated. For example, in 2013, Microsoft released its program called “play it safe,” which was a global initiative to bring awareness to software piracy.

If you go to the website now, it’s no longer there, and instead, only a placeholder image remains (you can still read about the original blog post here).

So this begs the question, why has Microsoft stopped caring as much about piracy as it used to?

The Rise of SaaS

If you remember the old version of any software, most of these were CD-based or hardware that went onto your computer. This basically meant if you got yourself a copy, you were able to pirate the product.

All you needed beyond that was usually a ‘crack’ key, which was basically a counterfeit key generated to bypass Microsoft’s registration, and voila, you have a fully working product for ‘free.’

Over time, however, with SaaS's rise, it was getting increasingly difficult to counterfeit copies of Microsoft products, especially those that went onto a SaaS model.

It became more obvious, you can’t crack SaaS.

With the subscription business growing, more products turned to SaaS, and as seen in the Google Trends graph below, fewer people were looking for cracked software because you simply couldn’t get a counterfeit copy of it.

https://img.particlenews.com/image.php?url=3IFP9N_0XvmBO2400Source: If you type in Google Trends “Microsoft windows crack” or Microsoft crack” this is what you see

If you imagine products today like Slack or Salesforce, it’s nearly impossible to find a ‘cracked’ version of the product with how this software is built.

What about older copies of their software?

With the statements above, you could argue that people could use its older versions of the software. This would especially be the case for developing countries that are still building their technology infrastructure.

Even if you do get a physical copy of the software, you still have to go through official Microsoft servers to authenticate it.

However, Microsoft realized early that although piracy has cost millions to billions of dollars to the company, it has also been a marketing strategy for the business.

Historically, for the hardware to go from computer to computer, you would have to stock millions of CDs and worked with hundreds of partners to get its products in the hands of consumers worldwide. This would have cost Microsoft a whole heap of money in the first place, especially on top of marketing costs that would have been a fortune.

Instead, with piracy, the software has spread across the world as people passed it illegally to each other. This was especially important in the early days when Microsoft had much stiffer competition.

This isn’t the only case for Microsoft.

Companies like Adobe have also allowed piracy to continue, and like Microsoft, this illegal activity has cemented both companies as leaders in their space.

Even Bill Gates acknowledged that piracy actually helped Microsoft expand into China.

“It’s easier for our software to compete with Linux when there’s piracy than when there’s not. Are you kidding? You can get the real thing, and you get the same price.” — Bill Gates on Microsoft In China

Ironically, piracy became the ‘freemium’ version of the product that most software has today. With competitors like Google coming out with their own competing products, Microsoft is keen to get its product in everyone's hands and cement its OS and Office software.

Microsoft now spends more time educating and trying to avoid negative PR

Although Microsoft still likes to go after the occasional reseller that sells its products, it doesn’t do so aggressively against consumers or smaller businesses as much.

Microsoft knows that if they are too aggressive, it will have to handle more negative PR, which competitors can utilize. It will also make them look like the ‘bully tech giant’ going after smaller businesses or consumers.

Instead, Microsoft has taken a more passive approach.

In 2015, a hacker named Jakub from the Czech Republic was convicted of pirating copies of Windows and other software. He was handed a 3-year suspended sentence as well as a hefty fine of around $223 200 (converted from koruna), which he couldn’t afford to pay back.

Instead of pursuing the fine, however, Microsoft decided to do something else. If Jakub was to partake in an anti-piracy video and got over 200 000 views, he would only have to pay a smaller fine.

Today the video has over 1 million views, and although there was still some backlash, imagine how much additional negative PR Microsoft would have received if they pursued the issue more aggressively.

Microsoft is also expanding into Africa.

Instead of establishing an aggressive piracy force for its expansion into Africa, Microsoft launched its “Windows PC Affordability in Africa Initiative.”

By working with their partners, this policy hopes to improve its software's uptake and affordability within the continent. Reading the post Microsoft released, it’s obvious that the initiative is focused more on educating the problems of using piracy software rather than cracking down on it.

In one of the potentially biggest growth markets that Microsoft is looking to penetrate in the next decade, it is taking a passive approach to the whole piracy situation.

Microsoft has realized that if it takes too hard of a stance on piracy, it will face too much backlash, so for now, it looks like Microsoft has ceased its war against the software pirates.

Comments / 0

Published by

Editor at CornerTech and Marketing @richardfliu on Twitter


More from Richard Fang

Comments / 0