I’ve previously said that Microsoft could be doing themselves harm if they were ever really successful in fighting piracy because Windows and Office could lose their position as the standard if everybody that didn’t want to put down several hundred dollars had to go with a competitor instead. I think that’s true of Microsoft Office, though less so for Windows. Even back when I was saying that, the case for Windows was precarious. I was living in a computing ecosystem wherein most people I knew built their own computers. To the extent that I thought about it, I figured that homebrew computers would become more rather than less popular. Not only hasn’t that been true, but the trending has been in the other direction because people that used to build their own computers are increasingly turning to laptops.

So as Microsoft turns up the heat to stop Windows 7 piracy, it’s probably a good business move. Particularly since they’re doing so in a way that is leaving laptops unthreatened. At least, for my ThinkPad machines, I don’t have to mess so much with the activation hassle even if I am installing from an independent CD rather than anything given to me by Lenovo. ThinkPads could be unique in that regard, though I doubt it.

ZDNet’s Ed Bott has been exploring the world of Windows 7 piracy and the pack and forth between Microsoft and those that want to use its software without authorization. For Windows XP and before it was the case that once you got through, you were golden. Increasingly, Microsoft will keep throwing things out there and so would-be pirates will have to keep downloading and implementing new workarounds. Given the shady, often virus-infested world of software hacks, that can be kind of risky.

But will it induce people to go out and purchase legitimate copies and thus increase sales? I really don’t know that it will. It won’t lead to widespread defection to Linux or Apple, but people going out and buying shrinkwrapped copies of their software is not really where their market is. Their market is with people that buy Dells and HPs and Gateways and so on. And in those cases, they get paid by the manufacturer. I also don’t see a huge market for people upgrading their existing laptops. First off, for most people it’s not worth the trouble. Second, you have to pay $100-200 for the inconvenience. Third, successive versions of Windows typically require new hardware (though Win7 is an exception in this regard). Fourth, the people that are going to be most excited about the latest copies of Windows are either not going to be put-off by spending the money or they’re going to accept the inconveniences of regular authorization requirement sidesteps.

There are a few exceptions and places where it could be worth their while and lead to increased revenues. A minor example is the laptop I am typing on. It has a copy of Windows Vista on it. I am using Vista because Windows XP and Linux won’t work on this machine. Windows Vista and Windows 7 do. Since I had a spare license for the former, I went that route. Otherwise, I probably would have paid for Windows 7. Of course, I only know that Win7 works due to a temporary illegitimate installation. If they were to prevent that from happening, I wouldn’t buy Win7 because I wouldn’t know if it would work. A slightly more common example is if somebody needs to run a particular software application that requires the latest version of Windows. There was a stronger argument for that before people bucked Microsoft on Vista in favor of XP. I think that sent a message to developers not to assume everyone is going to upgrade (if such a message was ever needed).

The biggest and most credible area of increased profit, though, is that it does force people to buy into their price-discrimination scheme. If they put up absolutely no barriers, people would just buy the cheapest version of Win7 on their laptop and then install Windows 7 Ultimate, depriving Microsoft of money. Given the increase weight Microsoft is giving to price discrimination, I suspect that this is where they are coming from with their increased attempts at beefing up piracy-blocking mechanisms. I really don’t think it’s because of increased piracy because I think that, thanks to the domination of the laptop, piracy rates have actually gone down somewhat.

Of course, none of this applies to Microsoft Office. Office does not come with most PCs unless specifically ordered. The temptation to obtain an illegitimate copy is therefore greater. MS Office also widely discriminates on price, to boot. Office also sports a significant barrier to exit insofar as they control the file types most frequently used in businesses across the country. I had previously hoped that the one-two punch of Microsoft uprooting its file format and the emergence of OpenDocument Formatting would change this, but it hasn’t.

This whole business makes me want to find an alternative to Windows. Unfortunately, Apple just isn’t for me and Linux isn’t ready yet (if it ever will be). Or perhaps I just haven’t invested enough in the latter. While Microsoft has thus far done a reasonable job of gatekeeping, I fear that at some point they’re going to start a serious crackdown wherein the inconvenience and expense of some legitimate users will be considered acceptable collateral damage. When I switched from Microsoft Office to OpenOffice a couple years ago, my motivation was not money but rather was simply not having to worry about licensing at all. That’s one of the big draws of Linux. But since most of my computers these days are laptops and most laptops already come with Windows, it is thus far not really worth the effort. We’ll see if that changes.