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Microsoft admits prize program was 'stupid'
Thursday, May 24, 2001
By DAN RICHMAN
SEATTLE POST-INTELLIGENCER REPORTER
Microsoft Corp. gave watches and barbecue grills to computer makers that notified it when corporate customers ordered PCs without its Windows operating system.
The notification program -- which has been discontinued, the company said -- raised suspicions among computer makers and corporate users that the company was reporting customers to the FBI or to software watchdogs as possible license violators. And the prize program seemed to some computer makers to be a continuation of Microsoft's heavy-handed business practices.
But Microsoft spokesman Matt Pilla said the program was "a super-brief pilot program that was admittedly stupid but absolutely didn't share information" with law enforcers. "It was just an opportunity to contact customers to explain the limits of their site licenses."
Under Microsoft site licenses for operating systems, customers can upgrade their operating system, but they aren't allowed to install the operating system on new machines, Pilla said. This principle isn't well-understood by corporate customers because of "our very, very confusing set of agreements," he said.
Computers shipped without operating systems can cost hundreds of dollars less than those with the operating system preinstalled.
So Microsoft enlisted the help of system makers to supply it with lists of misinformed corporate customers, offering them prizes.
What was not a prize, he concedes, is the flak that arose from the program.
"We did it once, briefly, and ended it several weeks ago. We won't do it again," he said.
The company has since simplified its licensing procedures, he added.
P-I reporter Dan Richman can be reached at 206-448-8032 or danrichman@seattlepi.com
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