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Windows Free May Be the Best Way to Get Microsoft Software Pirates to Pay

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Confusing and nebulous describe Microsoft plans to let software pirates upgrade free to Windows 10. In the three days or so since the policy became public knowledge, there are more questions than answers. This is certain: Even hinting at such a liberal policy is a dramatic turnabout for the company under CEO Satya Nadella compared to predecessor Steve Ballmer.

By measure of the Ballmer worldview, letting pirates upgrade robs revenue from the platform’s cradle, hands them sacred possessions at the door, and gives them the house keys—oh, and asks them to lock up after taking the tellie, silver, and jewelry. I contend: The strategy is brilliant and too long coming, assuming nothing changes before Windows 10’s summer release or Microsoft clarifies licensing rules to mean something different. Without even stressing a single synapse I can conjure up more good reasons for the upgrade plan than the fingers on my hands. But I’ll keep the list a bit shorter for this post. 

1. Microsoft is giving away the software anyway. There is little lost revenue, at least from consumers choosing to upgrade during the first year of release—at no cost. Think about it. Which is better for Microsoft? Being the free software’s distributor, or encouraging the grubbing of code from torrent sites? If no-cost is the same, the company should seize control rather than let others bundle God knows what with Windows 10.

2. The generous upgrade policy can convert thieves into paying customers. In many high-pirate regions, many organizations, not just consumers, are what Microsoft unlovingly call “non-Genuine” users. The year-for-free strategy doesn’t apply to businesses, which will pay something. Depending on final Windows as a Service pricing, the company could convert many non-Genuine business users into paying customers. Think about it. They already are loyal users. Note: Based on what Microsoft has disclosed, pirated previous Windows Enterprise editions are excluded from upgrades. But to repeat: The messaging isn’t crystal clear.

3. More Windows 10 machines mean more potential cloud service customers. Microsoft is betting the future on the cloud. Best strategy is to reduce platform fragmentation and to get as many customers on the newest software as possible, with hooks into extended services. Don’t forget that the new Spartan web browser will be one of the most important pieces to the cloud puzzle. Windows 10 is the way to get it. Fragmentation has long inhibited Microsoft platform ambitions, and risks are greater for the long-term services strategy.

4. Widespread Windows 10 availability could greatly curb malware’s spread. It is no coincidence that a correlation exists between countries where software piracy is high and malware-infections are great. According to PandaLabs’ Annual Report 2014, the top-10 most-infected countries are: China, Ecuador, Turkey, Guatemala, Russia, Taiwan, Boliva, Poland, and Brazil. With the exception of Taiwan, piracy rates in all are 50 percent or higher, according to Business Software Alliance. The number exceeds 70 percent for the majority.

In February, BSA published an IDC-commissioned whitepaper that finds a “clear link between unlicensed software and cybersecurity threats”. Excerpt:

In 2013, the unlicensed software rate for the United States was 18 percent and the malware encounter rate averaged 13 percent per quarter. For Indonesia, the unlicensed software rate was 84 percent and the malware encounter rate averaged 44 percent per quarter. Brazil, with an unlicensed software rate of 50 percent, had a malware encounter rate of 31 percent per quarter. Statistical analysis confirms that the two sets of variables have a strong positive correlation, meaning they move up and down together.

This conclusion jives with PandaLabs research. The 10 countries with the lowest malware-infection rates—Belgium, Denmark, Japan, Netherlands, Switzerland, Germany, United Kingdom, Finland, Norway, and Sweden—have some of the lowest-piracy rates. Typically: 25 percent or less, according to BSA.

Presuming that many of the zombie machines used, at the least, for botnets run pirated Windows—or otherwise are infected—Microsoft could do a great service to the larger Internet community and to its paying customers by getting as many users as possible on the newest, securest operating system.

5. In regions where piracy is high and incomes are low, Microsoft is more likely to sell low-cost Lumias as Windows 10 PC companions. The company’s big ambition is a single cloud-connected platform. However, mobile is a weakness. Microsoft already missed the major smartphone sales surge in developed countries. But many emerging markets are still moving from dumb phones. Windows across devices connected to extended web services is a viable strategy, and Lumia looks more attractive matched up to Windows 10 than either 7 or 8/8.1.

Editor’s Note: A version of this story appears on BetaNews.

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