The feature could present the biggest headache to people that frequently upgrade or change components on their PCs.
Already, the activation technology, introduced to thwart piracy and promote software subscriptions, is controversial with some users of the new Office software package.
"I have been completely against Windows Product Activation from the second Microsoft announced they would implement it in Windows XP and Office XP," said Bryan Jagielski, an Office user and software engineer from Dallas. "Microsoft has every right to combat piracy, but they should do so without invading my privacy."
Microsoft introduced product-activation technology with an update to Office 2000 but made it standard fare with Office XP, released in late May. It will also be standard with Windows XP, the new version of the operating system set to launch October 25.
In the case of Office XP, people can open the software programs 50 times before activating the product by phone or over the Internet. The process "locks" the software to the user's specific PC configuration.
In testing versions of Windows XP, the product must be activated within 14 days by using an included activation wizard to connect to Microsoft online, "locking" Windows XP to the existing hardware configuration.
If Windows XP is not activated within 14 days, it stops working and directs users to the Internet to automatically activate the software. To reactivate the software in the case of reinstallation or due to too many hardware configuration changes, a 44-key code must be obtained from Microsoft by telephone.
The deactivation feature works similarly in countries such as Australia and New Zealand, where Microsoft offers Office XP for sale on an annual subscription basis. The activation technology turns off the software unless the subscriber pays for another year's use.
Don't go changing
Office XP and Windows XP are capable of deactivating if the user makes radical changes to a computer's hardware configuration, which could trick the software into thinking it has been moved to another system.
"When you activate, what it does is lock the software to the hardware--takes the signature of the hardware," explained Guernsey Research analyst Chris LeTocq. "The technology is designed to detect changes in the configuration. Should the hardware fingerprint change, the activation technology may think you're running the software on another machine."
The potential for problems is greatest on desktops whenever consumers or businesses upgrade components, but it can also affect notebooks, where software could be rendered virtually useless on the road if the owner made substantial hardware changes.
Tom Bailey, Microsoft's lead product for Office, acknowledged this scenario can happen.
"In order for the activation to take, it identifies a wide variety of components in your system," he explained. "If a certain number of components change over time--for example, you get a new video card, add memory, this, that or the other thing to that PC--it will ask you to reactivate."
But Bailey emphasized: "The number of things required to have to go through that process we think is very small--certainly a small subset of your readers."
Once the software detects a hardware discrepancy it can't reconcile, the consumer or business must reactivate the software using the original installation CD. This requires calling Microsoft to get a one-time, 44-key code reactivating the software. In the case of Office XP, the software enters a reduced functionality mode where people cannot create or save files until reactivation.
Gartner analyst Michael Silver faulted the reactivation procedure for being too sudden. Unlike initial activation, where the user has a fair number of warnings before beginning the process, the reactivation procedure can come suddenly. For someone on the road with a notebook, software could be rendered useless until that person returns to the office.
"It shouldn't just deactivate and slip away," Silver said. "It should deactivate the way it activates, with a certain number of changes. It's like driving in your car and a fuel gauge light that goes on after you're empty." Microsoft's activation technology is, in many ways, largely misunderstood. While people must activate Office XP and Windows XP, contrary to popular belief, Microsoft does not force them to disclose personal information.
Product registration is not compulsory with activation.
But problems with RealNetworks' RealPlayer and other software products collecting personal information, coupled with Microsoft's strong-arm tactics revealed during its antitrust trial, have made some people leery of providing information to software makers.
"Would my computers contact Microsoft and alert them to the fact that I was doing something that was perfectly legal in the previous version?" asked Brian Norton, an Office user from Arlington, Va. "Would they try to do anything about it? This concerns me greatly."
"My concern with this type of activation technology is that what I do with software that I purchase from Microsoft is none of their business," Norton said. "Microsoft has a grand vision of software as a service. To achieve this, consumer confidence in authentication services has to come around. Right now, it has not, and with good reason."
In the case of Office XP, people can install the software on two computers, such as a desktop PC and a laptop. But the second installation requires a phone call to obtain the 44-key unlock code. The process is similar to that used in other countries where Office XP is offered, optionally, on a subscription basis. Microsoft earlier this year put on hold its Office XP subscription program for the United States.
But Dallas Office user Jagielski is concerned that Microsoft could use the activation technology to police subscriptions. The company is increasingly pushing subscription plans as part of the Microsoft.Net software-as-a-service strategy and other initiatives.
"If Microsoft moves Windows XP to a subscription-based platform for consumers, this, combined with (product activation), can give Microsoft the capability of remotely shutting down your computer as easy as the electric company can shut off your electricity," Jagielski said. "If you don't pay your bill, you can't use your computer."
Filon Agathagelidis, a medical student from Thessaloniki, Greece, believes Microsoft has legitimate reason for using activation technology.
"The way I see this is that Microsoft is trying to establish a balance between piracy and legitimately purchased copies of Microsoft software," he said. "It's common sense that piracy is something that they don't want because they simply lose money."
Paul Kunino Lynch, an Office user and journalist from Sydney, Australia, said he has lived with the activation technology since Office 2000, even transferring the program to a new machine without serious reactivation hardship. But he believes the technology and other issues will create problems for Microsoft as the Windows XP launch approaches.
"I am entirely confident that in the months up to XP's release and for some time thereafter, we will see a great campaign of gossip and lies about harm users will suffer from the new product," he said.