Microsoft U.K. changes tactics with license dodgers

IDG News Service - LONDON -- Microsoft Corp. will take a new approach toward midsize companies it suspects of using unlicensed software, sending a series of letters culminating in a threat of legal action from the Business Software Alliance (BSA), a company official said Monday.

By involving the BSA, which is an advocate for copyright and intellectual property issues, Microsoft is hoping to "spark off the engagement" with its customers, said Ram Dhaliwal, Microsoft's licensing programs manager in the U.K.

"If they are using our software, we are simply going to ask them to pay for it," said Dhaliwal, whose group runs the company's Software Asset Management (SAM) program.

In the past, Microsoft contacted companies by phone or e-mail and asked to send people to audit their software. Microsoft contends that companies have an incentive to license software legally, and its audit and asset management teams can also look for ways the company can save money, he said.

Most companies comply, but up to 3% don't. Under the new program, if Microsoft doesn't receive a response after 14 days, the company will send a succession of three "escalation" letters over three weeks. The last two letters warn that the case could be turned over the BSA, which could pursue legal action, Dhaliwal said.

So far, Microsoft will use the new approach only in the U.K., Dhaliwal said. Microsoft is targeting companies with around 250 PCs in the initiative. Companies that size often have problems with using incorrectly licensed and counterfeit software, he said.

Microsoft keeps purchase records for volume-license customers, and those lists can reveal usage inconsistencies, Dhaliwal said.

For example, a company with 250 PCs may be flagged if it bought several server licenses but only two client-access licenses, which are required to connect desktops to an Exchange e-mail server, he said.

"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," Dhaliwal said.

The BSA said last month that it has 100 piracy investigations ongoing against U.K. businesses. Some 27% of the software used by U.K. businesses is illegal, the BSA said, citing statistics from market research firm IDC.