The Vista license "loophole" that isn't

The Vista license "loophole" that isn't

Summary: Software licensing is often hard to understand. But that's no excuse for so-called Windows experts to deliberately publish sensational stories that turn the facts upside-down. The editors of one popular Windows newsletter are telling their readers that it's perfectly OK to violate the terms of the Windows license agreement. They're wrong.


Software licensing is often hard to understand. But that's no excuse for so-called Windows experts to deliberately publish sensational stories that turn the facts upside-down.

I'm talking about the fuss that Scott Dunn and Brian Livingston kicked up in yesterday's version of the Windows Secrets newsletter, in which Dunn breathlessly proclaimed the existence of an "upgrade hack" in Windows Vista that "allows end users to purchase the 'upgrade edition' and install it on any PC — with no need to purchase the more expensive 'full edition.'"

The story sucked in Computerworld's Eric Lai as well, who parroted the newsletter's argument that Microsoft is "[giving] its tacit blessing for consumers to exploit a technical loophole that allows them to upgrade to Vista with Service Pack 1, even if they don't own the necessary prior editions of Windows."

Uh, no, they're not. I wrote about this way back in February 2007, when the same sources issued the same breathless reports. Nothing has changed since then. If you qualify for an upgrade license, this technique allows you to do a clean install, legally. If you don't qualify for an upgrade license, then doing a clean install with this technique is technically possible but violates the terms of the license agreement. Tha distinction seems to be lost on the folks who are dredging up this old story. So allow me to explain, again.

Microsoft, like much of the rest of the software industry, sells its products to retail customers in three distinct packages:

  • Full packaged product (FPP) is intended for installation on computers that have not previously had a licensed copy of the software. It's typically the most expensive way to purchase a product.
  • Upgrade packages offer a discount to owners of a previous edition of a given product. In virtually all cases, the license terms require that you stop using the previous edition.
  • OEM products offer the steepest discounts of all and are intended to be installed on new or refurbished computers.

In every case, the terms of sale are included in a license agreement, and that agreement is what ultimately matters, not the technical details of installation. Dunn's article even quotes from the Vista license agreement, which says "To use upgrade software, you must first be licensed for the software that is eligible for the upgrade."

In previous Windows editions, customers were required to supply media (a CD or floppy disk) from a "previous qualifying edition" before they could install an upgrade version of Windows. That added a silly hassle factor to the installation process and did nothing to ensure that the installer was following the license terms. If you couldn't find a Windows 98 or Windows 2000 CD, you couldn't complete the installation. But if you did present the correct media, there was no way to verify that it actually represented a license for the machine in question.

With Vista, Microsoft replaced that hassle with a different one. Each copy of Vista comes with a product key. FPP versions can be used for clean installs; upgrade editions can only be installed over an existing copy of Windows. But here, too, there's no attempt to check whether the copy is properly licensed.

Windows Secrets publisher Brian Livingston is quoted in Dunn's story and in Computerworld as saying:

The fact that the upgrade edition will still upgrade over itself in Vista SP1 proves that Microsoft executives knowingly support the upgrade trick. I think the feature was deliberately included to make it unnecessary for more advanced and price-sensitive users to ever buy the full version. There is no ethical dilemma with people using a feature that Microsoft has specifically programmed into Vista.

No, it doesn't prove any such thing, and yes, there is an ethical problem with that strategy. The fact that you can work around a technical limitation doesn't automatically make the practice legal. If Livingston's logic were true, then other "loopholes" would also be perfectly acceptable. For instance, I could go to Dell and buy 50 computers tomorrow, ordering one with Vista Ultimate edition (for a $150 upgrade fee) and getting the other 49 with Vista Home Basic. I could then take the OEM media that came with the first PC and use it to perform clean installs of Vista Ultimate on the other 49 PCs. No activation would be required, and I would "save" $150 per machine, because the Dell OEM media works on any machine that matches the specs of the ones I bought. In Livingston's world, because Microsoft hasn't blocked this tactic, it must be OK.

I could also take an existing retail copy of Windows Vista, already used on one computer in my organization, and install it on a second PC. When the machine fails online activation, all I have to do is call the telephone activation line and tell them I've uninstalled the original copy from the first machine and reinstalled on a second machine. Microsoft has no way of checking to make sure I'm telling the truth, and their activation represetatives are trained to give the customer the benefit of the doubt in these circumstances, so they'll approve the activation. By Livingston's logic, this is perfectly legal. I call it a scam.

Look, you can argue that Microsoft's prices are inconsistent and illogical, but that has nothing to do with the issue at hand here. An upgrade license is intended to replace a previous license, period. Advising readers to violate the terms of a license agreement is pure sensationalism, and it’s wrong.

Topics: Windows, Microsoft, Operating Systems, Software

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  • MS is doing everything they can...

    to get people to move to Vista.

    I think you are naive or upset that you didn't break with a blog on the subject.
    • I wrote about this 14 months ago

      I wrote about this on February 15, 2007, and nothing has changed since then:

      I'll add that link to the post.
      Ed Bott
    • /facepalm

      i was part of the vista tech support staff that was trained for months before launch by MS.

      they did purposefully put this in, they CAN disable it at any time. the reason it is in there, is because it gives people the option of doing the upgrade install like normal (ie pop the dvd in and upgrade from xp) and authenticate it for that machine. now, from that point on, the user has a legitimate copy as far as MS is concerned.

      now if the customer ever wants to wipe and reinstall, they do not have to go through the hassle of installing xp, and then upgrading it. they only need the one vista dvd.

      you can also upgrade from an illegal copy of xp. this is also intended because they know a lot of people get suckered when they buy computers. they assume its got a legit copy of windows, but they dont. this too can be disabled by MS at their whim.

      so go ahead, and encourage people to abuse it, you know what that will do? thats right, MS will disable it. that was what was explained to us, that if it became hugely exploited, they might disable it.

      this isnt news, and it was known well before launch. grow up already.
  • RE: The Vista license

    FFP confusion has never gone this long I believe? Today is the day to bring this full-version into life and out of the dark;I can only hope. I want to go back to XP but having trouble...
  • Hardware vendors suffering because of license issues

    Our CIO had a long meeting with an HP exec last year, where he explained that we were NOT refreshing our desktops and laptops because of Vista and MS licensing BS. We also told him that we had converted most of our servers from Windows to Redhat Linux, and that we weren't buying any more servers in 2007 because the shift to Linux gave us a lot of extra performance on our existing server base. Other than a few blades for testing purposes, the hardware guys left empty-handed last year, mainly because of Microsoft.

    HP payed a little attention: we've gotten a lot of good Linux support and look to expand our Linux system capabilities a lot this year. But when we asked if they had given our feedback to Microsoft, the implicit message was that they hadn't, because it wouldn't do anybody (us or HP) any good.

    Our experience with Dell (before we threw them out) was similar; we were left with a Microsoft licensing quagmire that got our previous CIO thrown out as well. At the peak of the problem, we had 3 full-time staffers working on sorting out license issues, meaning it cost us more than $180K which drove the CFO almost to apoplexy. We are not a huge company, so that kind of needless cost really hurts.

    The upshot: licensing of commercial software products is needlessly complex, and you need to consider the TOTAL COST OF OWNERSHIP not just on license and maintenance costs, but also on administrative costs which are almost always hidden or understated. If your business has any capability to use open-source products, you will find it worth your while.
    terry flores
    • "licensing of commercial software products is needlessly complex"

      You got that right! I want to use Office 2003 on a dual boot machine but I couldn't find it, full install or upgrade FPP, anywhere for sale new. I thought maybe I could buy Office 2007 FPP and downgrade as who needs Office 2007 anyway. The printed page will look exactly the same and be easier [i]for me[/i] to produce in 2003. After researching for hours,I learned that the Office 2007 FPP is NOT eligible for down grade and only the volume license is.

      What a load of BS. I am not going to buy a minimum of 5 licenses of Office 2007 to get one license for Office 2003. Why would it matter to MS if I did downgrade anyway? I even have the installation media for Office 2003 - just no valid license.

      Well, it's important to me as a professional to be extremely diligent regarding licensing and ethics so I could not illegally downgrade. Nor can I use Office 2000 which I do have licenses for since I need to work with people using Office 2003 and don't need the formatting and other issues you get by trying to collaborate with different Office versions.

      Finally I found a used version of Office Standard 2003 FPP on Amazon. I snapped it up for over $300, checked it for authenticity, installed, activated, updated and am now using that. Too bad for MS as they would have sold yet another Office 2007 license but instead my money went to a reseller.

      No new revenue for MS in that transaction... How stupid can the MS corporation get anyway?
      • I would believe you, except...

        "After researching for hours"?

        In about 30 seconds of searching I found more than 20 online merchants that will gladly sell you a new, legal, shrinkwrapped copy of Office 2003.

        As for "too bad for Microsoft," they only sell through resellers anyway, so I'm not sure what your point is.

        And as for: "I need to work with people using Office 2003 and don't need the formatting and other issues you get by trying to collaborate with different Office versions."

        The first time you run Office 2007 and save a file, you're asked if you want to use Office 2003 formats. Click the check box, click OK, and you're done. All of your documents are in native Office 2003 formats.
        Ed Bott
        • Office 2007 interface is less usable

          The office 2007 user interface is so different from prior interfaces that it is a real pain for a power user such as myself to use it. That, not the file format, is to me the best reason to stick with an earlier version.
          • You do know...

            That all (with a very few minor exceptions) of the menu shortcuts from Office 2003 work in Office 2000? So, Alt+F, O (File, Open) from Office 2003 has the same effect in Office 2007?

            Have you actually tried the Office 2007 Ribbon? Yes, there's a learning curve, but I find it's much better for many tasks.
            Ed Bott
          • You do know that we can choose

            what applications we like and most of us don't use keyboard shortcuts. I don't want or need Office 2007.

            My choice, not yours...
          • Where did I say it was my choice?

            I offered a suggestion and a piece of information that the previous poster might not have known. I certainly didn't order anyone to switch to anything. Don't worry, I won't bother with any more suggestions.
            Ed Bott
          • lack of knowledge

            For home use, I do not want to spend the money to upgrade. For office use, we have a site license but I have avoided upgrading because Office 2003 works fine and I am quite proficient in it. It ain't broke, so I see no need to fix it.
          • Agreed

            If it's working for you, no need to change.
            Ed Bott
          • You do know...

            I just want to turn off that damned ribbon and get my Office 2003 interface back. EVERY single update in the Office product MS seems to go out of it's way to change the look and feel of the product enough to annoy every power user on earth. I couldn't give a damn about bringing noobs into Office - they don't need it anyway.
          • The Ribbon of Wasted Time

            I work for AT&T in their Data Center. A few of us got the ribbon of pain. I wasted 20-30 minutes trying to print out a spread sheet when I did not have the time to waste. Since then I have wasted, unecessarily mind you, many more minutes trying to do things I could have done in seconds using this piece of work.

            Everyone in our organization has begged to be downgraded to 2003 that has received the new 2007. Not a one of them to this day would not jump at being downgraded after six months or better of use.

            I now bring my laptop in and do my docs on Open Office and convert.

            License that Microsoft.
          • I don't agree, but

            You don't have to use the ribbon if you don't want to. In the options, you can select the view to be the classic menus.

            I'm really not sure what the problem is. The keyboard shortcuts are the same (for the most part, there is a funky one or two, mostly obscure for most).

            You really should give the ribbon a chance though. After about 10 minutes, it was like I had been using it forever. It is much more intuitive than the old menus, and more convenient. More options right in front of you, scroll through the menus, an arrangement that makes more sense for the task at goes on and on.

            But, like I said, if you don't like it, you can always switch to classic menus.
          • Where is this option you speak of?

            I've not found any such option in the native install of Office 2007. I've seen 3rd party add-ons that will provide a classic UI, but my research has indicated that out-of-the-box, the ribbon bar is the only UI Microsoft provides...
          • It's on my main menu

            I don't think I have downloaded any add-ons, but it is possible, I suppose. You may be correct about the out-of-the-box thing...but if I have an add-on for it, I didn't download it myself. I wouldn't have, as I prefer the ribbon. The only add-on I have is Solver for Excel.

            When you click on the windows icon, and it brings up the main menu, at the bottom I think it is (I have 2003 at work, 2007 at home, and I'm at work at the moment), there is a menu item that says something to the effect of options, or customize, or something similar. It's listed there. Has been since the first day I downloaded it (I got it as a beta a long time ago). Like I said, though, I like the ribbon, so I've never used it. It may not even be there anymore, it may have been a beta feature that didn't make it to release.

            On a similar point - I haven't ever found any add-ons that will display the ribbon...have you? I ask, because not all the new apps have it. OneNote doesn't. And I really wish it did. It's so incongruous without it.
          • No such option

            I have written two books on Office 2007, and I can assure you there is no such option in the product as shipped by Microsoft. That's why these add-ins exist:


            Ed Bott
          • Classic Menus

            That's great, Laura. How do I get to the options? I don't see it.