Microsoft Doesn’t Do More About Piracy: Why?

Here’s why Microsoft doesn’t do anything more about the piracy of its products:

Microsoft really doesn’t have to do more to fight piracy.

Even in the face of widespread piracy, Microsoft is one of the most successful tech companies of all time and makes billions of dollars every year.

On top of that, the modern SaaS business model has more or less turned piracy into a profit maker for the company.

So if you want to learn all about why Microsoft doesn’t fight piracy as much anymore, then this article is for you.

Let’s jump right in!

Microsoft Doesn't Do More About Piracy: Why? (All the Info)

Does Microsoft Do Anything About Piracy? (5 Measures)

The first thing to note is that Microsoft does have anti-piracy measures, and the company has had many of them in place for decades.

None of these measures are perfect, and it’s fair to say that Microsoft could realistically do a whole lot more.

But, it’s important to cover the measures that are in place before we get into the reasons why Microsoft has such a lackadaisical mindset when it comes to piracy.

#1 Product Keys

Product keys were one of the earliest systems deployed by Microsoft to combat piracy.

The technology is pretty simple to understand at a basic level.

You get your hands on the software itself.

Once upon a time, you might have used an installation CD or DVD.

These days, you probably just found a download somewhere.

Regardless, you have your hands on the software.

So, you install it. That’s where you hit the roadblock.

The installation software won’t run unless you can enter a valid product key.

These keys are issued by Microsoft, and they use a complex coding system to make them hard to fake. 

You’ll never crack the software key by punching in random characters on your keyboard.

It’s too complicated.

This single mechanism fought piracy for years, and Microsoft still uses product keys.

As I go through everything, you’ll see why product keys are less important, but their downfall really came from one place.

Hackers figured out how to counterfeit software keys, so they failed to truly prevent piracy.

They offered a useful deterrent for a while, and Microsoft still uses them, but product keys alone aren’t enough to win the war on piracy.

#2 Watermark

When you use modern versions of Windows, you might run into the idea of the watermark.

Generally speaking, a watermark is a unique visual marker that helps to identify intellectual property.

In digital terms, a watermark can come in many forms.

With modern Windows, there’s a simple, small message that pops up on your screen if your copy of Windows is not activated with a Microsoft account.

It’s a simple thing, and it identifies unlicensed software.

Before I get into how this works, let me address an issue.

There are plenty of cases where this watermark shows up even though you legally purchased and licensed your copy of Windows.

It has a pretty notorious track record for showing up when it shouldn’t.

We’re going to ignore that part of the story.

I’m really trying to focus on how this is supposed to combat piracy.

This watermark doesn’t physically or digitally prevent piracy.

Instead, it just identifies unlicensed copies (when it actually works).

This does two things.

First, it makes some people feel uncomfortable enough that they won’t use software with the watermark.

That certainly doesn’t impact everyone, but it discourages at least some piracy.

The second thing is that the watermark is easily visible for any publicly used software.

If someone streams their desktop, uses the computer in a public workspace, or otherwise has a visible watermark, then the mark stigmatizes that machine.

Basically, the watermark aims to use social pressure to prevent piracy.

#3 Distribution Control

Another powerful tool in Microsoft’s arsenal is the control of distribution.

Their control over software has never been perfect, and it never will be.

But, limiting distribution does make it a little harder for people to steal the software.

Back in the days when you needed a physical disk to install the software, Microsoft would only ship the disks to authorized retailers or resellers.

That made it harder for pirates to get a copy.

In the modern incarnation, Microsoft has their own download servers.

They can implement piracy restrictions on these servers to discourage software theft and keep things under control.

Any effort to limit unauthorized distribution helps Microsoft at least mitigate some aspects of piracy.

You might have noticed by now that none of the methods are perfect.

But, together, they do reduce piracy and probably help Microsoft make more money in the end.

#4 Lawsuits

It’s also important to note that Microsoft has gone after known pirates many times.

Whether through lawsuits or outright prosecution, the company has used the law to enforce intellectual property rights.

There are too many examples to cite them all, so I’ll stick with a few high-profile cases that are worth noting.

There was a time that Microsoft actually conducted raids against Mexican cartels to try to stop piracy.

That’s probably the most extreme example I could find, but it shows that Microsoft really does care about piracy and has gone to lengths to combat it.

In less extreme examples, Microsoft has pursued lawsuits against parties that the company has identified as widespread distribution of pirated software.

One of the most recent high-profile cases started back in 2017, but it’s still a strong example that Microsoft has gone after pirates for many years.

#5 Software as a Service

Most of the things I’ve listed so far are older mechanisms.

Microsoft still sometimes uses the legal system to stop pirates.

There are still product keys, and the watermark still exists.

But, that’s not really at the heart of it all.

Instead, the updated business model took care of most of Microsoft’s piracy concerns.

Piracy still happens, but the company doesn’t feel nearly as strong a need to fight it as before.

The software as a service (SaaS) model is both the most powerful anti-piracy tool Microsoft has and the most compelling reason why the company doesn’t seem to care about piracy anymore.

Here’s the idea.

Microsoft actually makes it easy to get a copy of the software now.

You can download many of their tools for free, including Windows and Office (by far the biggest sellers for the company).

When you install, the software will still ask for a product key, but if you don’t have one, it doesn’t stop the installation.

Instead, your software is linked to a Microsoft account.

Through your Microsoft account, the company attaches a bunch of services to the software.

For instance, you can get cloud storage for Windows, collaboration tools for Office, and a whole lot of other service-related features.

Since all of those features run through your account, you have to pay a subscription fee to maintain them.

This is the SaaS model.

You’re no longer charged for the software itself.

Instead, you’re charged for the account that is tied to all of the most powerful and convenient tools.

There are now free versions of Office that you can get directly from Microsoft.

But, if you want the good stuff, you have to pay.

And, since everything is locked to an account, there is no software key to crack.

There is no secret installer that gets around the software.

Microsoft automatically links everything to your account when you pay, and if you stop paying, the services stop too.

The subscription model makes the older concepts of piracy obsolete.

Why Doesn’t Microsoft Do More Anti-Piracy Measures? (4 Things)

The SaaS business model is a pretty good answer to all of this, and if you’re satisfied, you can stop there.

But, it’s not the total picture.

There’s a lot more going on, and as you keep reading, you’re going to see that Microsoft really found a brilliant and innovative way to deal with piracy.

They don’t fight piracy much anymore because they basically monetized it.

I’ll explain in the next section, and then I’ll cover a few more key reasons why any additional crackdowns on piracy wouldn’t be a smart move for the company.

#1 Cost Efficiency

This is the true crux of it all.

The SaaS model means that Microsoft can more or less give away the actual software for free.

By attaching everything to accounts with subscription fees, the code is no longer the most important part.

Because of that, piracy is actually now part of the distribution model.

Microsoft doesn’t care if you download your copy of Office from a pirate because you still need a subscription account to really use it.

Basically, the pirated download just served as a free distribution center for Microsoft.

Every time someone grabs a pirated copy of any of Microsoft’s software, they don’t have to pay to distribute it.

They don’t have to pay for the servers, bandwidth, or anything else.

The pirates are actively doing Microsoft a favor at this point.

Now, it’s possible that there are some forms of piracy that can forge an active, paid Microsoft account.

That could be a problem, but it’s much harder to overcome than dealing with the old product keys or distribution restrictions.

At this point, fighting piracy would actually cause Microsoft to lose subscriptions.

#2 Public Opinion

Alright. We’ve established that Microsoft has found a way to more or less profit from piracy.

The pirates distribute the software and get people to like it.

Then, people end up paying for the SaaS when they want more or better tools.

Even if that wasn’t the case, Microsoft probably still wouldn’t be fighting pirates too hard these days, and that’s because of public opinion.

There’s a thing that tends to happen.

When you’re the biggest in your industry for a long time, people tend to turn on you.

Many times it’s warranted.

Sometimes it’s not, and neither really matters.

As Microsoft continued to dominate operations systems and productivity software, people reached a point where they felt like they were forced to use Microsoft products.

That soured public opinion, and when the super multi-billion-dollar tech giant went after a bunch of small-time pirates, it made the company look like a bully.

That bad press was actually more damaging than the piracy itself, so Microsoft backed off.

You can try to look up the old piracy policies.

Microsoft has abandoned all of them.

The company would rather work on public opinion than stop any form of piracy in its tracks.

Combine that with the wildly successful SaaS model, and you see that piracy prevention just isn’t something the company needs to care about.

#3 Practicality

Still, we can scrap everything covered so far, and Microsoft still doesn’t need to go after pirates anymore.

Forget the SaaS model.

Pretend that people would be happy with Microsoft despite anti-piracy measures.

The simple fact is that going after all of the pirates isn’t practical.

It would take a massive investment to try to take down every pirate in the world, and many of them are shielded by international laws that prevent multinational prosecution and extradition.

The only way Microsoft could really clamp down on piracy would be to make its software less accessible, and that would destroy the business model.

Microsoft took over the tech industry by making universal software that could be used by pretty much everyone.

If you make it harder for pirates to get their hands on the software, you inevitably make it harder for paying customers to get their hands on the software.

It’s just not a practical way to go about business.

Especially since the proliferation of the internet, software companies really haven’t been able to put the genie back in the bottle.

Pirates will find a way to get your software.

You can waste a lot of energy fighting it, or you can do what Microsoft did and find a way to steer into the curve.

#4 Bottom Line

There’s one last reason why Microsoft doesn’t really have to care about pirates.

Before the SaaS model really took over, Microsoft was the largest software company in the world, and by a lot.

Sure, they had some anti-piracy measures, but those measures didn’t really stem the tide.

Microsoft was estimated to have lost billions of dollars in sales revenue due to pirates.

Despite that, they were still the biggest and most valuable company in the world.

They still made countless billions of dollars, and piracy really didn’t slow the company down at all.

Why didn’t they do more?

They looked at the scoreboard.

As much as it’s easy to think that major corporations will do anything for the next buck, that’s not quite right.

If things are going well despite a problem, then it might be ok to ignore the problem, and that’s something we can more or less see throughout Microsoft’s history.


  • Theresa McDonough

    Tech entrepreneur and founder of Tech Medic, who has become a prominent advocate for the Right to Repair movement. She has testified before the US Federal Trade Commission and been featured on CBS Sunday Morning, helping influence change within the tech industry.