Pirates prefer Windows XP over Vista, says Microsoft

It's planning a PR campaign for early '09 to fight piracy as XP is retired

Software counterfeiters pass on Windows Vista and instead prefer to pirate Windows XP, a Microsoft Corp. attorney said today, outlining a practice that tracks with the leanings of many of the company's customers.

While explaining the "Global Anti-Piracy Day" educational and enforcement effort Microsoft launched today, Bonnie MacNaughton, a senior attorney with the company, acknowledged that pirates prefer Windows XP over Vista.

"Historically, counterfeiters tend to focus on the 'n-1' version of software," MacNaughton said. "Because of the more robust antipiracy and security features in Vista, most sophisticated piracy rings still continue to focus on XP. But that's changing over time."

That pirates have stuck with XP -- which retains the bulk of the Windows operating system's market share -- is "very consistent with what we've seen in counterfeiting in the past," said MacNaughton. "There's usually a lag of between one and two years [before they can] figure out how to replicate those antipiracy and security features."

Counterfeiters currently copy Office 2003 rather than the newer Office 2007 for the same reasons, she said.

MacNaughton also touted the day's announcements of new initiatives and lawsuit filings scheduled to take place in 49 countries, ranging from Argentina to the U.S. "As counterfeiters have gotten more sophisticated, we have realized that this is not a situation that we can address alone," she said. "And we want to stress [today] the collaboration with Microsoft's partners and customers, and governments."

In the U.S., Microsoft filed 20 new lawsuits in federal court against software resellers that, according to the company's allegations, either sold pirated copies of Microsoft Windows XP Professional and Office or installed the counterfeit software on new PCs. Nine of the lawsuits were filed in California; two each were filed in Ohio, Oregon and Texas; and others were filed in Connecticut, Florida, Louisiana, Minnesota and New York.

MacNaughton also said that Microsoft is planning on another antipiracy educational effort early next year to make sure that customers know Windows XP's lifespan is coming to an end. "We're expecting that counterfeiters will attempt to fill the void at XP's end of sales," she said.

Microsoft will halt Windows XP Professional sales to small mom-and-pop computer sellers after Jan. 31, 2009. Larger computer manufacturers, such as Dell Inc. and Hewlett-Packard Co., however, will be able to obtain XP media for "downgrades" from Vista Business and Vista Ultimate licenses through the end of July 2009. Microsoft only recently said that it would extend shipments of XP to OEMs; previously, it had said it would stop the practice in January.

According to MacNaughton, Microsoft will roll out a campaign in early 2009 that will remind people of XP's demise and warn them that copies they obtain after those end-of-sale dates could be counterfeit. "We're planning [a campaign] in January or February to make sure our customers know what our rules and policies are about Windows XP," she said, "to make sure they understand what may be illegitimate and what may be legitimate. We want to make sure that the XP they might be getting is genuine."

Data compiled in August by a Florida developer of Windows performance metrics software showed that more than one-third of all new PCs are still downgraded to Windows XP from Vista, either by the user after purchase or by the computer maker at the factory.

Sun is a software company, new top shareholder says

The investment company that announced Wednesday it has taken a 21 percent stake in Sun Microsystems believes the market doesn't get one important thing about the workstation and server vendor: It's a software company.

At least, that's what Staley Cates, president of Southeastern Asset Management, told investors last June, after his company acquired 10 percent of Sun's stock.

"Sun Microsystems is kind of interesting because it's progressively less of a server company and more of a software company; it's more about Solaris and Java," Cates said at a shareholder meeting for the Longleaf Partner Funds that his company manages. "And that's kind of a change that we don’t think the market's on to at all."

Although Sun still generates the vast majority of its revenue from server and workstation sales, CEO Jonathan Schwartz may now be paying special attention to Cates' message.

Southeastern has been increasing its stake in Sun this year, and on Wednesday it said it had changed its ownership status in the company in a way that allows it to take a more active hand in its management, according to a filing with the U.S. Securities and Exchange Commission. It also said it has been meeting with Sun's management to talk about ways to "maximize the value of the company."

"We welcome feedback from our shareholders and welcome their insight," a Sun spokeswoman said Wednesday. Neither Sun nor Southeastern Asset Management would elaborate on what was discussed at the meetings. Southeastern Asset Management, based in Memphis, Tennessee, does not focus exclusively on technology stocks, but it has also invested in Dell, Symantec and Level 3 Communications.

In recent years Sun has emphasized the strategic role software plays for the company, switching its stock symbol from SUNW to JAVA last year, and placing more marketing dollars in its Solaris operating system. "We are no longer simply a workstation company," Schwartz wrote in a blog post explaining the ticker symbol change.

Earlier this year Sun spent US$1 billion to pick up open-source database vendor MySQL; however, moves like the acquisition haven't helped Sun's stock price. It has plunged from nearly $25 per share a year ago to a close of $4.72 on Wednesday. Schwartz, who ascended to CEO from the ranks of Sun's software division, has said he sees the company as a "systems" vendor that sells both hardware and software.

Asked recently if Sun would consider selling the company's hardware business to focus exclusively on software, Schwartz said it made more sense to continue as a systems vendor, but he did appear open to this possibility. “We are always thinking about being more creative on behalf of our shareholders,” Schwartz told the New York Times. “We want to drive maximum value for them.”

Clues hint at Windows 7 debut in 2009

Microsoft says next month's annual WinHEC will be last before launch

Microsoft Corp. may release Windows 7 as early as next November, bloggers speculated today, pointing to postings on the company's own Web site and comments made by the CEO of Asustek Computer Inc., the company that makes the popular Eee PC line of netbooks.

According to Long Zheng, who writes the Istartedsomething.com blog, and Ed Bott, a well-known Windows blogger, clues point to a 2009 release of Windows 7, the successor to Windows Vista.

Long noted that Microsoft's site for its upcoming Windows Hardware Engineering Conference (WinHEC), which opens Nov. 5 in Los Angeles, warns developers that this year's event will be the last before Windows 7's launch. "Be one of the first to see what's new in Windows 7 and be among a select few to receive a prebeta build of Windows 7," the Microsoft site reads. "WinHEC is the only chance for you to engage with the team at this level -- there is not another WinHEC planned before Windows 7 is released."

WinHEC has been an annual affair since 1991 and has typically been held in April or May. Microsoft delayed the conference this year, however, pushing it back from that usual window to November.

Microsoft has not set a ship date for Windows 7, although executives have said their goal is to launch the operating system three years after the debut of Vista, which was released to businesses in November 2006 and to consumers and PC makers in January 2007. Analysts have typically interpreted Microsoft's broad timetable to mean that Windows 7 will ship in the second half of 2009 or in early 2010.

If Microsoft didn't unveil Windows 7 until 2010, that would mean it would be skipping a WinHEC event during 2009, a first.

Bott also pointed to a story in Laptop magazine that quoted Jerry Shen, the CEO of Asustek, also known as Asus, who said his company would move from Windows XP straight to Windows 7 as a choice for the Eee PC netbook line. Shen pegged Windows 7's release date as the second half of next year.

"We don't plan on putting Vista on any of the Eee PCs," Shen told the publication. "I think in the future, in the second half of next year, we will put Windows 7 on Eee PCs."

Mike Elgan has also said that Asus plans to unveil touch-screen laptops early in 2009 that would take advantage of Windows 7's support for a multi-touch user interface when the operating system is released.

Last month, after Microsoft announced that it would hand out alpha versions of Windows 7 at both WinHEC and its Professional Developers Conference (PDC), scheduled for next week, Michael Cherry, an analyst at Directions on Microsoft, said that it was a good, though not sure, bet that the company is on track for a late 2009 or early 2010 launch. "We now know they're making progress," Cherry said then. "They at least have something they're confident enough in to share. But the next question is, how far along is it? And we won't know that until people load it up."

At the time, he also noted that although Microsoft slates PDC based on software releases -- which means the events aren't on a set schedule -- WinHEC is an annual affair.