As a support technician for a major PC manufacturer, customers frequently ask me to outline the basics of Microsoft's latest antipiracy effort, Product Activation. They want to know if it will affect the software they can install, if it will prevent future hardware upgrades, and above all else they want to know how it will affect their privacy. As the popularity of Windows XP and Office XP grows, you may have some of these questions posed to you. To help you explain the basics of Product Activation, I've compiled 10 of the questions I am asked most frequently and the answers I give to those questions. How does Product Activation work?
Product Activation is currently required for all OEM and retail versions of Windows XP, Office XP, and several other Microsoft products. Product Activation isn't required on licenses acquired through one of Microsoft's volume licensing agreements. So agreements such as Microsoft Open License, Enterprise Agreement, or Select License, will not require activation. Click here for a complete list of products from Microsoft's Web site. During the installation process, you must enter the product key associated with the particular copy of the software. After you enter this product key and accept the end user license agreement (EULA), you'll be prompted to activate the software (Figure A). You can choose to activate the software now or later. Once you've chosen to activate the software, you must opt to do so over the Internet or via the phone.

Figure A

The Product Activation screen for Windows XP

During the activation process, an algorithm uses the software's product key and information about the machine's hardware to create a 50-digit installation ID. For a very detailed description of how the installation ID is created, check out this paper from Fully Licensed GmbH, a German copy-protection company. The Installation ID is then transmitted to Microsoft via the Internet or by you, over the phone. A confirmation ID will be either sent back to you via the Internet or given to you while you're on the phone. Once you enter the confirmation ID, the activation process is complete. Frequently asked questions Now that you know how Product Activation works, let's take a look at the 10 questions end users ask me most frequently. 1. What data does Microsoft gather during activation? The only information transmitted to Microsoft during activation is the installation ID and, for Office XP and Visio 2002, the name of the country in which the product is being installed. What about the hardware information used to create the installation ID? According to Microsoft, once the installation ID has been created, there is no way to use this ID to determine the computer's hardware configuration.