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February 23, 1999


MS versus Jolly Roger: Swashbuckling crusaders from Redmond challenge Long John Silvers of the Indian coast.
Priya Ganapati in Bombay

Email this story to a friend. The thief is the artist. The policeman the critic,' declared Oscar Wilde.

Microsoft's criticism is a double-barrelled volley against software piracy in India.

The first shot's called the 'Honesty Line'. The second's the 'OEM System Builder Programme'.

The Honesty Line is basically phone numbers that an honest citizen in Bombay or Bangalore could dial to squeal on a pirate, eye-patch or not.

But in spite of what the Microsoft mandarins tell you, believe us, the OEM system builder programme's where the real action is.

Before we get to this 'system builder' programme, here's a little digression about that chap whom people outside Microsoft call the 'grey market operator'.

In India, the PC market is very price-sensitive.

PC manufacturers, who worry about brand equity, spend on it. Obviously, their shelf price is a tad fatter than that of our grey marketwallah who buys components in the wholesale market and snaps together a PC on the kitchen table.

In this country, the grey market is big. And a significant number of the assemblers ship PCs that have nothing but illegal software on it, from the operating system down to the tiniest utility.

Not surprisingly, most of this illegal software comes from Microsoft. Surprisingly, most of the chips in the grey market computers come from Intel.

That is because Intel set up the 'Genuine Intel Dealer' network. That ensured it a ride in the thousands of grey market PCs that flood India.

It works both ways. The assembler too gets some brand recognition as he waves his 'Genuine Intel Dealer' status in the face of the customer who is looking for some quality assurance.


What is stopping Microsoft from doing a 'genuine Microsoft dealer' network?

Actually, if you and I can think of this, what makes us believe Microsoft's marketing juggernaut has not thought of it already?

The fact is, it did. It even acted. And called its 'Genuine Intel Dealers' network, yes you know: The 'OEM System Builder Programme'.

But everyday is not Sunday.

Despite Microsoft's claims to the contrary, it is as clear as day that the 'OEM System Builder Programme' is not going anywhere.

Perhaps, what works for robust hardware does not for software that needs constant tending and tweaking after sales.

[Note: Microsoft vociferously counters any analogy between its OEM System Builder Programme and the Genuine Intel Dealer network.]

Microsoft India's Business Development Manager, Genuine Software, V Senthil Kumar explains:

"In Microsoft, we have an OEM System Builder Programme for PC manufacturers. The programme helps us build a concept of branding with the PC assemblers in the unorganised sector.

"We are making our products available to smaller system builders at a price that is quite attractive. We also offer them discounts on prices so that they can have an edge in the price-sensitive PC market."

Kumar insists the OEM System Builder Programme is "very very successful"!

When asked how come in a big city like Bombay, it is still difficult to come across a PC assembler who offers genuine Microsoft software at a competitive price, Kumar admitted that there are a few glitches:

"Not many of the system builders have enrolled directly. Few do it for a while and then because of peer pressure back out. They give us reasons like 'I am losing money because my competitor is not a part of the programme yet and he has no problems.' The OEM idea has not really taken off among the system builder."

Shrugging off all comparisons with Intel's GID network, Kumar defends, "Software is not like hardware. It is very easy to pirate and does not give problems like counterfeit hardware."

His email to Rediff read: "Software is pirated when users do not have a valid end-user license for the product they buy, use or install. This is considered an infringement of copyright and is illegal.

  1. Softloading - purchasing a single user license and loading it onto multiple computers or servers.
  2. Counterfeiting - making distributing and/or selling copies that appears to be from an authorised source.
  3. Renting software without permission from the copyright holder.
  4. Distributing and/or selling software that has been 'unbundled', or separated, from the products with which it was intended to have been 'bundled'.
  5. Downloading copyrighted software from the Internet or bulletin boards without permission from the copyright holder."

Now coming to the first shot. The Honesty Line.

If the OEM System Builder Programme is about persuasion, the Honesty Line is about grabbing by the collar.

Good cop. Bad cop. You know? Always, works.

Microsoft, whose Windows operating system is probably the most pirated software, launched the Microsoft Honesty Line about two months ago in Bombay and Bangalore.

The line was set up to complement the anti-piracy hotline in New Delhi that was set up by the National Association of Software and Service Companies and the Business Software Alliance.

Kumar says that the Honesty Line is a part of Microsoft's efforts to reduce the high software piracy rate of 69 per cent in India as opposed to 27 per cent in the US.

"The Honesty Line has made us more visible among all our partners and among developers who develop products on our platform. They use the numbers to call and report on piracy," Kumar explained.

The Honesty Line, which receives an average of 15 calls a week, is run for Microsoft by an agency called INTEC Training and Eduware Private Limited.

INTEC also runs MS Connect, Microsoft's call centre operation that provides support and information to Microsoft customers on all Microsoft related issues.

Kumar claimed that "One of the things we realised when users came back and gave their feedback to us was that they are ignorant of the fact that PC manufacturers and sellers have put pirated copies of software on their hard disks."

"By providing Honesty Lines to users who are affected or concerned about high piracy rates in the country, Microsoft is ensuring that consumer dissatisfaction translates into action," Kumar said over the phone.

But he refused to give any information on either the nature of the calls or the action taken on the calls received.

All he is willing to reveal is that the response to the line has been "phenomenal".

"I have no idea about the calls. I don't think anybody in this organisation does. After all the calls are completely confidential," he claims.

But an afterthought slips in... "We will be probably getting a report at the end of three or six months on what percentage of calls were end-user related and what has been the nature of the calls. Once action is completed, we will consider publicising such information."

Microsoft had commissioned a study by the Indian Market Research Bureau in 1988. It revealed some startling realities of the Indian PC market. Twenty-five per cent of the people who bought a PC in the last six months did not know the activities that constituted software piracy. Fifty per cent of those planning to buy a PC in the next six months did not know about software piracy.

The Honesty Line aims to change all this. With heavy publicity and a strong law department, Microsoft is determined to bring down the piracy rate.

Curious about what really happens when you ring the Honesty Line? Read on...

An Honesty Line officer picks the receiver, flips open his pad and listens patiently with pen in hand.

The caller is asked a series of questions and a report is prepared. The report is passed on to the legal cell for investigation and action.

Though callers can remain anonymous an Honesty Line officer revealed but that does not mean every attempt is not made to ascertain the caller's identity.

Kumar revealed that callers are also asked to produce "supporting evidence" like proof of purchase or sometimes the PC itself!

Ignorance. It is the one word that according to Microsoft explains why pirated software is loaded on to thousands of PCs sold across the country through the grey market network.

"The statistics indicate that we have a huge amount of education to do to ensure consumers are purchasing a product that allows them to receive warranties, manuals and virus free software as opposed to purchasing counterfeit software that provides no guarantees," Kumar points out.

His top three reasons for why software is pirated in the country are:

  • Users are not aware of intellectual property issues and do not appreciate that a software programme is a product of creative effort, has value and needs to be protected.
  • Users do not appreciate that piracy has a direct effect on loss of government revenue and potential jobs in India and around the world.
  • Software pirates are prepared to exploit the public's lack of awareness of copyright issues and make money at their expense.

Kumar refuses to even consider price as an issue. "Piracy is not a price issue. We have found that our cheapest and most readily available software programs are pirated as much as the most expensive programs we develop," he points out.

But all this still doesn't explain how an end-user could be compelled to stay away from pirated software.

Kumar is matter of fact. "It is illegal!"

But if you are appealing to the conscience of Mr Fast Buck, you should be doing better than pointing out illegalities.

Kumar is now trying really hard...

  • It is illegal and punishable by law.
  • It is risky. Unless you are certain that your software is from an authorised source you could be getting a program infected with viruses.
  • You may be hurting yourself or your organisation by failing to take advantage of the economic benefits of newer software licences.
  • There won't be another version of your favourite software if there is no revenue to put back into research and development.
  • It isn't the right thing to do.

But guess, it will take more than simply asking people to do the "right thing".

Seminars, litigation, marketing programmes, legislative work and persuasion... you name it, and Microsoft is doing it.

"Unless you get the right message to the users, that when you are using a pirated piece of software you are doing something illegal, it is not possible to ramp up efforts to curb piracy in the country," Kumar warns.

The Honesty Lines are:

Bombay (022) 8203534

Bangalore (080) 5535224

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