After being rather flippant in my opinion about piracy, why is Microsoft raiding the penny jars of small business now? Could it be they are not doing as well as they claim and they need the cash?

There will be a few readers (like myself) who have been around a while.  We remember when arcades were 10p a go, we marveled at the ZX81 and its computing prowess and unlike many of the Microsoft Faithful (who’s first memory of computing was the Playstation) we also remember a very important comment Bill Gates said quite a while ago:

Although about 3 million computers get sold every year in China, but people don’t pay for the software,” he said. “Someday they will, though. As long as they are going to steal it, we want them to steal ours. They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.

To me, the reasoning behind that was obvious, let people have it for free and once it saturates the market (and people can no longer envisage a computing life without it) cash in on the pirates.

Its being reported that Microsoft is now doing some cashing in over on the UK’s green and pleasant land.  Hitting vendors who allegedly have been selling unlicensed copies of Windows.

Included in this list are the following computer shops (and this list can be found here):

Computer Services Repair, Birmingham
Marsh Computers High Tech Trading Ltd, Kent
B’N’I Computers Ltd, Birmingham
Morely Computers, Leeds
Discovery Computers, Birmingham
South Liverpool PC Repair, Leeds
Gemini Computers, Birmingham
Smithdown Computers, Liverpool
Bytesize Solutions Ltd, Birmingham
TC Links, Liverpool
Discount Computer Warehouse, Birmingham
SXC Industries Ltd t/a Stockxchange, Liverpool
Computer Resale, Chesterfield
Avesta UK Ltd, Manchester
Quest Computers, Gosport
KBR Computers, Merseyside
Surf-IT Computers Ltd, Hampshire
Jupiter IT, Merseyside
Exel Computers, Sheffield
Clarion Computers, Swansea
MCS Computers, Teesside

and Microsoft didn’t stop there, since they also tackled ebay too:

Little Laptop Shop eBay aka recovery_dvds
Custom PC Shop
Fizz Time aka Electricbuy
Snowdon Computers Ltd

Michala Wardell the head of Microsoft’s piracy department, had this to say:

Most of those caught in the operation either claimed the illegal activities were carried out by rogue employees or that they were not aware that what they were doing was illegal

Now these vendors are apparently “working with Microsoft” [1] and everything is ok?  Well no, not in my opinion.  For years after the original comment Bill Gates made, it seemed that Microsoft was not particularly bothered with piracy.  Sales were good and even recently Steve Ballmer made the remark (in reference to unlicensed Windows):

….that’s a competitor that’s tough to beat, they’ve got a good price and a heck of a product, but we’re working on it.

which suggests to me that Microsoft was rather happy that the market was saturated with their products, legal or not.  (You can read that quote in context here)

The prophecy that Bill Gates made though now seems to be coming to pass and one has to wonder, if Windows 7 and their associated wares are selling as well as Microsoft claims they are, why are they going after these vendors now and not years ago? – I’ll let you work that one out, but going after a few vendors in the UK hardly gives credibility to the successes in sales that Microsoft has touted recently.

Lets also consider that here you have vendors “named and shamed”, without trial by Microsoft.  I am sure they all volunteered to be named by Microsoft, but I wonder what if they hadn’t?  I wonder what sort of “agreement” Microsoft offered them, or indeed what they said they would do, if they didn’t agree.  I would like to think that Im not the only one who is a little uncomfortable about a firm handling these matters itself, what would you do if you owned a small business when Microsoft employee’s came knocking? Refuse to co-operate?  I think for a small business being eyed up by Microsoft, its not trading standards they would worry about.

Michala Wardell  has a beaming smile and a rather disturbing (imo) way of putting Microsoft’s actions against alleged piracy:

At Microsoft, we recognise the impact the sales of pirated or unlawful software have on the channel. To continue the fight against those who sell unlawfully, we will continue our efforts to invest heavily in education, engineering and enforcement initiatives to combat software piracy to cleanse the channel of illegal software trade.

The highlighted text is mine, this quotes source is here.

Of course that seems to be in stark contrast to the flippant way Ballmer dismissed piracy, or indeed Bill Gates own words which to me seemed to encourage it.  Lets look though at an allegation against Microsoft of “theft of IP” (of sorts) and consider what our anti-MICROSOFT-piracy crusader would say to the allegations against Microsoft when the creators of Juku accused Microsoft of stealing code from their project and using it themselves for the Plurk project? The following was reported on ars technica on 15th December 2009:

a Twitter-like social networking site that has gotten quite popular in China, accused Microsoft China of not only stealing the service’s design, but 80 percent of the service’s code too. In response, Microsoft has pulled its microblogging site, which goes by the name of Juku

and whilst Microsoft appeared to blame a third-party, it is also claimed in the allegations against the small businesses that some offered the defense of “rogue employee’s”  – of course Microsoft has a war chest of cash to both defend and attack…so that’s ok then.

If your Falcon has an unlicensed copy of Windows can you expect Microsoft to come running?....Is Microsoft really chasing the pennies now?


As regular readers know, I have a strong anti-piracy viewpoint, the problem I have in this instance is that I would put money on the “working with Microsoft” by the above named businesses very similar to the “behind closed-door deals” that Microsoft has engaged in recently with regards to patent violations.  Theres a reason why Microsoft don’t want you knowing, I wonder why?

In addition I think the way that Bill Gates seemed to dismiss (or even encourage) piracy, only for Microsoft to collect later is rather underhanded.  If the plan was to let people get “hooked” and then cash in once they had saturated the market, then I’d say they have succeeded.  What Microsoft didn’t plan for all those years ago when Billy Gates made his statement was that people would be switching to alternatives and we need to ask ourselves, why now? Could it be that after so many failed projects/products that Microsoft is needing money now more than ever? certainly Dr Schestowitz has written articles on failing products and cash cows here and could it be that Microsoft has now seen the drifting away of its customers and trying its best to recoup losses just to continue its existence?

I would also like to know why Microsoft didn’t involve Trading Standards immediately? Why do they want to deal with it in-house? What sort of deal/agreement have these small businesses actually made in order to “work with” [1] Microsoft?

I will be contacting some of the businesses on that list for a comment, Ive got money on them not being allowed to respond.


[1] In my view, working with Microsoft is more like working for Microsoft.  You do it their way or not at all.

Goblin –

If you are new to this blog (or have not yet read it) please take time to view the OpenBytes statement, here.