Since the introduction of Office 2000 SR1, Microsoft has been employing an anti-piracy tool known as "Product Activation." First, let me say, having used it, I've run into no problems. As a beta tester, I have to reformat my hard drive or partitions on my drive quite often; hence, a reinstall of Office 2000 SR1 under those circumstances results in my having to reactivate the product. By the way, if you have Office 2000 and the separate SR1 update, this doesn't apply to you. Activation for Office 2000 only applies to the fully integrated Office 2000 SR1 product.

Sometimes, I've had to do it several times in the same day. There is no limitation in that regard and if you happen to be connected to the internet, you can just select product activation in any of the Office modules and you receive authentication without ever having to make a separate phone call or talking to an operator.

In Office 2000 SR1, this procedure does require you to fill out some information but in Windows XP, registration and activation are separate and the procedure is identical. If you are connected to the Internet, you can select "Activate" and it's done or you can elect to activate during Windows XP setup.

That part is easy and seamless. For most users, it won't be an issue. If you change some hardware component, you might be prompted to reactivate Windows XP, possibly the same for Office but assuming this was simply a component, there's nothing more to it than the above.

However, I dual boot my system. I have Windows Millennium on one partition and a separate operating system on another partition. When I first installed Office 2000 SR1 to the other partition, I couldn't get reactivated without making a phone call at which point I had to explain to an operator that I was a beta tester and I had just installed Office on a separate partition for that purpose.

Microsoft claims, they want to discourage "casual piracy;" that is, piracy wherein the home consumer installs a product on more than one machine in the home. I can certainly understand why Microsoft would want to do this but consider the following. Suppose you are planning to purchase a new machine in another year but this year, Microsoft introduces a new version of their office suite.

Ordinarily, you wouldn't give such a scenario a second thought. However, now that your software is "mated" to your system, it becomes a consideration. Microsoft Office isn't a nominal software purchase. Depending upon version and whether or not it is an upgrade, MS Office can cost anywhere from $300 to $750.

Given that price, I would think a user considering or planning the purchase of a new PC a year down the road might defer buying a new version rather than having to deal with the hassle of moving Office to a new machine and then having to make a personal phone call to Microsoft who, at their option, can decide whether or not to activate. This may not be an issue early on but as users become more aware of "Product Activation" this could cause retail sales of Microsoft products using this scheme to decline. In other words, OEM (Original Equipment Manufacturer) sales up at the expense of Microsoft's retail business.

For many Microsoft products in the past, the EULA (End User License Agreement) usually allowed the user to install the product on a new machine with the understanding it would be removed from the other machine. Now, however, assuming Microsoft doesn't change the EULA, you would also have to make a call to Microsoft and get permission. How do they even verify the product has been removed from the other system?

Of course, they might just change the EULA to prohibit that action and that only exacerbates this mess. Under the original scenario that I defined above, at least the user had the option under specific circumstances to move the software to a new machine. However, if the EULA were changed to prohibit such action, why would anybody buy a new product at retail? If it were my decision, I'd wait for my next computer and have the OEM include it.

The only circumstance under which that wouldn't apply, at least for me would be if I had only just purchased a new system that I planned on using for the next three or four years. That's the dilemma for the user and if it takes root, it becomes a dilemma for Microsoft.

On the plus side, it might open the door for competition. Even though most license agreements specify the software is only to be installed on one machine at a time, the user of some other office suit wouldn't be faced with any dilemma should they buy a new system. When you consider that most users don't even need most of the modules in Office, it makes the choice much easier and many other office suites offer the option of saving a word processing document in a format that can be read by a user of Microsoft Word.

This dilemma extends itself to Microsoft's "Dot Net" strategy as well. Microsoft's "Dot Net" strategy is built around offering services to which a user can subscribe that would augment and work with various software components on the user's system. From my own perspective, I'd want as many users subscribing as possible.

However, suppose you have three computer users in your home, each with separate computers. If a user is wrestling with the product activation scheme, Microsoft might end up with one subscriber to a service in the home but all users in the home making use of that subscription. This would seem to be self-defeating.

Cell phone services practically give away cell phones in order to lure subscribers. Nonetheless, Microsoft seems bent on charging a huge sum for entry into what one would assume would be a pantheon of services they plan to use to compliment their office suite. Obviously, if this idea works, no problem. The question is whether or not consumers will resist.

Microsoft had announced offering Office XP on a subscription basis as well as the ability to purchase it outright. However, there was a lot of opposition, at least from corporate customers and they are, for the moment, rethinking that strategy. That doesn't mean it won't eventually happen. In fact, many software companies are looking at the subscription model.

Unfortunately, for the consumer, it's not only a service model but also a model in which the software you use is by subscription only. Office suites use their own proprietary format and that makes it very difficult for a user to move to a competing suite. Now, if you subscribe for the use of that suite as well as services tied into that suite you are virtually locked in because of the functionality of the files on your hard drive and the services to which they are mated.

Obviously, a lot of this is speculation. We don't know the nature of the services that might be offered and how they will integrate with our products. Also, if the services are tied to a specific vendor's software, this may limit the appeal of their service.

The services are still evolving but everyone is looking at this model, including the possibility of selling software on a subscription basis. It's up to you to consider the implications of these new purchasing and piracy protection schemes to see what works best for you and your needs.

Currently, Microsoft seems to be leading the charge. Success will certainly breed more of the same. Failure will most assuredly lead to the biggest corporate about face since "New Coke."