MS partners stung by piracy letter
Angry channel reaction to software giant's aggressive new anti-counterfeit campaign.
Microsoft has angered some of its resellers by sending them letters that could imply they are selling and installing counterfeit software.
The software giant, which posted healthy financial results last week, informed resellers in a letter that it had noticed they "have been buying fewer copies of Microsoft Office Professional from authorised Microsoft OEM distributors".
The letter, seen by CRN, went on to point out that, as a reaction to the tough economic climate, some system builders are pre-loading counterfeit software onto machines to undercut resellers that sell licensed products.
The letter concluded by warning resellers of the dangers and financial penalties of selling illegal and counterfeit software.
Mike Lawrence, managing director of reseller Bentpenny, said he was left fuming after receiving Microsoft's letter.
"We have never sold any illegal software," he said. "This implies that a reduction in orders is the result of illegal copies being sold, when it is actually because the market is saturated."
Caroline Smith, marketing programmes manager for the UK Compliance Group at Microsoft, said there was never any intention to make accusations.
She said it was an important 'buyer beware' message, intended to raise awareness of the problem of high-quality counterfeits in the channel. However, she added that the company would review the letter's tone.
But Gordon Davies, commercial director at reseller Compusys, said Microsoft's approach was correct. "Softly, softly approaches have failed in the past," he said.
"Perhaps it could have been more subtle, but we don't mind getting our toes trodden on if it solves a serious problem."
He added that he supports Microsoft's campaign because resellers that buy legitimately are suffering. "We know the costs of these products, and if you break down some of the PC deals available, they are too cheap. You have to ask questions," he said.
Separately, Microsoft is hoping to recoup what is believed to be millions in lost revenue from users running non-compliant software.
Alongside its anti-piracy efforts, Microsoft is believed to be looking to increase its emphasis on compliance and is looking to the channel to help.
Shaun Frohlich, executive chairman of reseller Teksys, which has set up a compliance arm to help end-users, told CRN: "(Microsoft is) trying to find the middle ground."
Frohlich said Microsoft wants to make sure that users are using compliant software - for example, that an OEM licence matches the hardware it is running on. But on the other hand, he added, the software vendor doesn't want to create negative PR.
The problem surrounding non-compliant software is that, in many cases, users are unaware that undeclared or under-reported licences are an infringement of the product usage rights.
Currently, the only way that Microsoft can ensure companies are compliant is to rely on firms' own integrity, or leave it to the diligence of one of its Large Account Resellers.
But Frohlich claimed there is a great opportunity for the channel in this space. Because not all external auditors fully understand IT licensing, resellers can fill this gap in the market and ensure end-users are compliant. This in turn can generate revenue for channel partners and Microsoft.
"Everyone's a winner," said Frohlich.