Microsoft Piracy – Live Long and Prosper?

Legal, Microsoft
23 Comments

I wonder how many phone calls this post is going to generate but rest assured: If you call me, I will be asking the questions. Why such a polite post? Well, it appears that our friends from SurplusComputers are back selling Microsoft Windows 2003 Small Business Server Premium NFR for $169 with free shipping. Note the NFR tag which means, ironically enough, not for resale. How does that make sense, how is someone selling software thats not for sale? You already know the answer to that question. Now riddle me this: Why has Microsoft done nothing to stop this? Here is how a fellow Microsoft Certified Partner reacted to the news of this:

How they are able to continue doing this without Microsoft coming down on them with a lawsuit I have no idea – hence my utter frustration with Microsoft. I am making this note not to inspire piracy, but rather to BEG anyone from Microsoft to please stop this. It really impairs our ability as legitimate partners to consult and deploy the product (charging $2k or more for the deployment) when the software itself can easily be obtained for $170!!! Not only that, but unethical computer people go in, sell the illegal product, and then we're called in to fix or deploy and we have to give clients the bad news that they have an illegal copy!!! I'm including the link so that Microsoft can (hopefully) take swift action.

Now what would have certainly sent Rick right over the edge would be the news that I reported this very same company to Microsoft and BSA back in October (as a matter of fact, the blog post on mssmallbiz.com is a direct consequence to us informing the Microsoft small business licensing watchdog about Surplus Computers who at the time was selling the SBS NFR for $169 and Office XP NFR with the GE mouse for $69). So lets face it – Microsoft has done nothing – yet.. I'm sorry, Surplus Direct is a major electronics outlet in United States and believe you me, it does not take months for someone in Microsoft to write a cease and desist letter. So don't deceive yourself with the "well, I am sure its happening, we are just not plugged in to the behind the scenes of Microsoft legal and licensing enforcement." We are not talking about something that started last week, last month… We are talking over three months here. So I'll get to my point: Where is Surplus Direct obtaining Microsoft NFR software? How is it that a major electronics outlet is allowed to illegaly distribute Microsoft software for months, and more importantly, where are they getting such a big stock of NFR media? Microsoft Licensing – please stand up and protect your partners and your customers before you lose both.

23 Responses to Microsoft Piracy – Live Long and Prosper?

  1. Anonymous says:

    Vlad – please send a copy of this blog to steveb@microsoft.com – something MUST be done to protect the consumer and resellers alike from this – it’s just not right.

    sbsguru

  2. CharlesM says:

    Looking at your tin hat I must ask if you’re insinuating some sort of a conspiracy here? If so, I think you are dead on. I remember when you first posted about this, I am SHOCKED AND OUTRAGED this is back.

    As you say, how is this still possible? Big retailer = no action, little guy = lawsuit:
    http://www.microsoft.com/piracy/partners/states/Florida07.htm

    And this is someone down the street from us! Surplus Computer spams me every week and every single OEM out there. Has Microsoft simply given up on old software and just looking at Vista?

  3. Vlad says:

    In terms of fairness, I should tell you that this too has not only been submitted to Microsoft Antipiracy folks but even local Microsoft SMS&P (Gulf Office) has thanked us for bringing it to their attention. However, Microsoft partners are being hurt here, big time. Here is what another responded to the thread with:

    With respect, the proof’s in the pudding. If I read in the news about a “Cease and Desist” letter going out to them in the next 2-3 business days I’ll believe what you’re saying. Otherwise I have to assume that you guys aren’t taking piracy very seriously.

    It’s sort of like the old saying.. **** or get off the pot.

  4. Vlad says:

    And another…


    I’m getting pretty sick and tired of being one of the few guys in our industry playing by the rules, and places like this are where a lot of SMB’s (i.e., OUR POTENTIAL CLIENTS) are buying their software. If Microsoft is serious about getting market share and inspiring their partners in the SMB arena then they’ve got to get off their duffs and start enforcing the rules.

    I’m no lawyer, but can’t MSFT just buy ONE copy, and once the transaction is complete this gives probable cause to get a supoena for all records of NFR MSFT sold, and then sue the company in civil court for the difference? They won’t get the money, but it’ll put them out of business for a while. Alternatively, vendors like this are selling software illegally and worth signficant value accross state lines – that makes it a Federal crime, yes?

  5. Anonymous says:

    Could not have put it any better myself.

    I understand that Microsoft cannot comment once the lawsuit starts.

    I understand that it takes a while to collect evidence, file the lawsuit and hold hearings.

    I understand Microsoft is working hard on it even if for legal reasons I cannot see exactly what they are doing.

    What I cannot understand and cannot see is how a case of piracy reported by so many has been allowed to continue since October? I am a patient man but this site advertises a clear criminal action and they do not even see a C&D?

  6. mikka50 says:

    Just like on the pre-sale support side: You have to move a lot of licensing to get any help with Microsoft.

    Same deal for piracy. You have to move a lot to get sued out of business.

    How Surplus Computer, where I’ve purchased stuff from before, can continue to do this is puzzling. Is this real retail/nfr media or are they just bootlegging it in the basement?

    There must be something behind the scenes here as I find it hard to believe that this is true AND that Microsoft has not bombed them yet.

  7. Anonymous says:

    I was wondering how come so many places were selling all this Windows XP software all over the place.. and in the last year or two too!

    Chicken or egg.. Does Microsoft lack of enforcement create piracy or does prevailing piracy cause depression of Microsoft licensing enforcement?

  8. happyfunboy says:

    there seems to be no problem putting the necessary resources in place to police the microsoft partner program, drop the hammer on misuse of action pack, and variously assume that the majority of microsoft partners are mustache-twirling scumbags just looking to stick it to steve-o every chance they can by loading bootleg copies of live communications server for every one of their clients.

    and then…something like this is allowed to fester, in public, serving as either a hideous example for those in our profession who are more than happy to shaft their clients for a measly $20, or a nice nose-thumbing toward those of us who make damn sure that both we, and our clients, are legal with our software licensing.

    it’s one thing for ms to expect us to be the keystone kops, running around trying to make head or tail of their maze of licensing terms…

    it’s quite another to expect us to do that while letting some massive store next door skip along, tra-la-la, without a care in the world whether the stuff they sell is legit or not.

    am i pissed?

    you betcha!

  9. Tim Barrett says:

    I find the “90 day warranty” cheeky enough. But are they seriously hiding behind the verbiage, “On the CD it states you must legally own a copy of their license to use this CD?” Maybe that’s a loophole that crack dealers can start using. “You must be legally able to smoke this rock to use it, but I’ll sell it to ya anyway”.

    If we did something like this as MCP’s, we’d lose our certifications for life! The same fate, and much much more, should happen to this or any vendor who is stupid enough to carry this out! These jokers don’t even SELL the retail versions of SBS. NFR is their ONLY SBS product!

    I’m sure Microsoft will put a stop to it ‘eventually’, but the damage is already done, and gets greater every day. Instead of waiting to gather evidence for trial, the cease and desist needs to happen NOW to stop the bleeding.

    Where’s Dave Swartzendruber when you need him??

  10. Anonymous says:

    A couple of years ago, when attending a TS2 Event and these were destributed freely, the presenter stated although they are not for resale, you could give it to the client for used and then recoup the cost by gettting the maintenance contract and peforming the installation. That was said at both TS2 events that managed to come to my town.

    Curious.

  11. Anonymous says:

    A couple of years ago, when attending a TS2 Event and these were destributed freely, the presenter stated although they are not for resale, you could give it to the client for used and then recoup the cost by gettting the maintenance contract and peforming the installation. That was said at both TS2 events that managed to come to my town.

    Curious.

  12. Anonymous says:

    I too am disheartened when it comes to Microsoft’s inability or unwillingness to stop piracy.

    What I am even more disappointed in is that while this is allowed to go on and Microsoft gloats about 30 small companies they sued last year I am faced by questions like this from my customers:

    Can we get around it somehow?

    Reputable business people are questioning the cost of Microsoft software because they are bombarded – everywhere – to get it for less.

    Microsoft, please help us.

  13. To me, the damage is 3 fold:

    1. I’m unable to sell the product (not that the margin on this is worth discussing, but it’s principle – I try to be a “solution provider”, and every time a client finds he can profit by “shopping” me it diminishes the relationship).

    2. Unethical partners take advantage of this price, sell it for close to retail, and then do a poor job of installation, leaving a mess for me to clean up. It is as if half the dentists can get junk fillings for less money, so they use them, leaving the patient to have to find another dentist (hopefully reputable) to fix the problem. After a while, the word gets out that ALL dentists are crap, and NONE of them are to be trusted, and the profession takes a hit (both in prestige as well as in billing potential).

    3. If a product is available for $170, the perception is that it’s only WORTH $170. I sell the VALUE of the solution, not the COST of the product. I can’t talk up the wonder of SBS, what it can do, the cost savings to the organization, etc. and then say all these things can be solved by a $170 product with $2,500 in installation – it’s an untenable, illogical statement. Most people believe in their gut that you get what you pay for, and if the product costs $170 then it must not be the right solution for their $5m company.

    ROI and Value Selling is the way to sell SBS, and by Microsoft allowing this to happen it damages our market. Despite what MSFT would have you believe, it’s hard enough to sell a proper solution – I don’t need any more roadblocks in my way.

  14. OT Orlando says:

    I would like to thank people at Microsoft that are concerned with piracy. I have seen posts from Eric Ligmen and Rene Alamo on our list. Thank you for being concerned and protecting our common interest.

    I wish that you could be louder. I know you are working on it behind the curtain but to us it appears as if nothing is being done. Report is filed and thats the end of the road. I have been reporting people for years and not a single one has been reprimanded.

    This process needs more transparency, more task force orientation. Tell us who you are pursuing. Tell us who the illegal operations are. Give me something I can show my customer when they borwse the web and find a $60 office. Right now I do not have the tools to fight piracy and I do not have the tools to fight the perception that there is no penalty for piracy of Microsoft software.

  15. Anonymous says:

    It is not only ironic but a sign of a true problem when these discussions on Yahoo lists append the advertisement for the illegal OEM license, when even Vlad’s very site uses Google ads promoting illegal software.

    This is a big problem and Vlad, thank you for bringing this up. I too have sent criminals to Microsoft over the years and it was ignored. If this is not solved, and soon, this will not be a problem but a norm because as much as I talk about the importance of legitimate software there are more ads, web sites, emails and spam indicating otherwise and Microsoft is strangely silent on the issue.

  16. Just today I recieve an e-mail (spam) with the following link:

    http://llnnsq.electrozero.info/?18596792

    I just can believe this producs are sold for such low price and not be NFR

  17. Hi Vlad,

    I’ve been a stickler for Microsoft’s Licensing rules and regs for years – I don’t necessarily agree with all of their conditions, but I abide by them.

    As a Microsoft Partner and Small Business Specialist, I feel that if we try to dodge around MS Licensing, then we are only hurting ourselves and our industry.

    Companies like these pirates need to made a public point of – they need to be sued until they are bankrupt – they degrade the IT industry, the companys whose products they are pirating and those of us who are playing by the rules are ultimately the ones who get stomped on.

    I’ve reported a number of pirates to Microsoft and others where appropriate – piracy is theft, theft is a crime, and companies promoting this criminal activity need to be closed down.

    The issue I have is that Microsoft seems to take this issue less seriously then their resellers do – report someone to Microsoft and they say (basically) “Thanks, but we can’t tell you what we’re going to do – that’s classified information”. That’s bullshit.

    If we report a criminal to Microsoft, we should be kept informed of the progress of the prosecution of these criminals. That’s fair. As should the public – maybe when the proceedings have finished – but we should all be informed of each and every case that Microsoft (and any other manufacturers) have made against criminals who are stealing their software and our livelihoods.

    Piracy is a crime – and those who commit this crime, as with those who create viruses, spam and phishing scams need to be dealt with accordingly. Public flogging and throwing rotten fruit and vegetables went out over a hundred years ago – after these people are bankrupted, I think that is the next step in their punishment – we ALL get to have a go at them this way.

    – HiltonT

  18. Anonymous says:

    I wonder how big of a part the confusion in licensing leads to (inadvertent) piracy of software. There have been times where the customer just got fed up with the license ordering and went the OEM route just because it was easier.

    I too would like to see something done both to stop the piracy and to help partners do this easier. Sadly, I do not feel very confident in Microsoft’s piracy protection.

  19. Vlad says:

    Little update over what happened today, you are NOT going to believe this:

    Ok now I have seen everything. A follow-up call to client made my jaw drop to the floor.

    Sometime yesterday, client called Microsoft spoke with someone about what he needs. Somehow the rep at Microsoft got this DOCTOR pointed in the direction of the ACTION PACK subscription which would give him SQL. Client says he is all signed up and waiting for it to come.

    This guy is in no means an IT provider. He is a doctor. He runs an urgent care center, and has a second center being constructed a few miles away, and plans to use the ACTION PACK to run everything.

    How the hell did that happen?

    I have a meeting with him at noon on Monday. Who wants to join me?

    Thanks,

    Judd Spence

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  21. randy says:

    you guys need to get a clue, read the law what they do is legal. microsoft could change the rules but dont. you waste your time talking about things because you are not smart enough to compete in the market that microsoft has created. get a life, make your money and dont worry what others are doing that the courts have said can be done

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