Microsoft continues UK crackdown on illegal traders: urges channel to benefit from converting customers to genuine Windows and Office

Press release

Reading, UK - 11^th August 2009 - Microsoft today announced settlements with 11 traders caught selling illegal software across the UK, as part of its ongoing commitment to ensure a level playing field for its partners.

Settlements have successfully been reached with the following 11 resellers, who all admitted to hard disk loading¹ and selling software illegally:

These cases bring the total number of hard disk loaders Microsoft has taken action against since January 2008 to 103. Add to this the flat UK piracy rate over the last several years - currently 27%² - and it is clear that illegal software is a persistent problem that will not disappear overnight. Microsoft will always make concerted efforts to educate hard disk loaders to help them "get legal", and to highlight the risks of counterfeit and illegal software to customers, but the channel has a role to play too, and it can be a profitable one.

Simon Aldous, SMB & Distribution Director, Microsoft UK, comments: "The imminent launch of Windows 7 makes this the perfect time to step up the fight against piracy. Not just from the defensive standpoint of being undercut by unfair competition, but because the prevalence of illegal and counterfeit software in the UK presents a huge opportunity to convert customers to genuine products. Taking a proactive approach to piracy helps reduce the threat and make the most of the opportunity - the best of both worlds."

The scale of the opportunity in the UK is significant, according to Graham Arthur, anti-piracy attorney at Microsoft UK. "Every day, over a million people activate and validate their PCs to check if their copy of Windows is genuine. In the UK, the Windows Genuine Advantage (WGA) failure rate is 13%. With Windows 7, we are bolstering the operating system's anti-piracy capabilities with Windows Activation Technologies³ ." Arthur continues, "The failure rate for UK validations of Microsoft Office is much higher at 45%. We also see 45 leads a week coming into our UK reporting piracy alias - a clear indication that our customers are dissatisfied when they don't get what they paid for: quality, genuine software. The high demand we're seeing for Windows 7 isn't for counterfeit or illegal software, but for a reliable product that comes without unwanted extras that could put customers' data or identity at risk."

David Evans from Matrix Computers said, "We recognise that we weren't installing Microsoft software correctly, and that's something we take seriously. We'll be working with Microsoft over the next few weeks to make sure what we do falls within their software rules from now on. It's good to see Microsoft working with small computer traders like us to ensure we're up to speed on the right way to use and sell their software. Getting it right is important to us and to our customers - the lifeblood of a business like ours."

Arthur adds, "Many of our partners are surprised to learn that we discover counterfeit software in 1 in 3 corporate UK customers⁴ when we carry out software licensing reviews - this is not just a problem confined to the consumer and SoHo marketplace. The channel has a pivotal role in differentiating the benefits of fully supported genuine software from the very real risks of unlicensed or fake products. The pay-off for educating customers in this way is the potential to win new business by preventing piracy - through initiatives such as Office Ready PC⁵ - or through legalisation programmes, like the Get Genuine Windows Agreement⁶."

Aldous concludes, "There is a real opportunity here for everyone in the channel to pull revenue lost to pirates back into the authorised channel. We will continue to support honest resellers by taking action against illegal traders, but it's in our partners' interest to proactively prevent piracy. Given the scale of the problem and the corresponding opportunity, I doubt there are many resellers out there who can afford to ignore piracy altogether. I would encourage anyone who would like to establish new revenue streams to integrate customer education and legalisation initiatives into their strategic business plans."