As first reported in WinInfo Daily UPDATE, Microsoft will institute an anti-piracy measure in Whistler, the next version of Windows 2000, that will tie the Product Key to the machine ID of the first PC on which its installed. Dubbed "product activation" by the company, the feature is designed to reduce casual copying by requiring the Internet- or phone-based registration, or activation, of Whistler before it can be used. This process will create a unique identification code for that particular installation based on the Product Key that was entered and certain criteria from the hardware configuration. If the user attempts to install that copy of Whistler on a different machine with the same Product Key, the activation will fail. Whistler's product activation feature is similar to that used by Office 10, which will debut a few months before the Whistler desktop versions.
Microsoft says that product activation does not scan a user's hard drive or register the make and model of the PC with the company. Instead, a random installation ID is generated using unnamed parts of the hardware configuration, and the Product ID, and that number is registered along with the Product ID at Microsoft. Users concerned about changing their system's configuration have nothing to fear: Microsoft understands that people upgrade components in their systems and their product activation scheme takes this into account. If a user completely recreates a system from scratch, say replacing the motherboard and other main components simultaneously, they will need to call Microsoft to activate the product when it is re-registered. This process will make it impossible to reinstall the OS on the old system.
Product activation is designed almost solely for consumers, and it won't affect most corporations, which typically purchase Microsoft products with volume licenses. Microsoft says that product activation will only be included in versions of Whistler that are sold at retail or acquired by consumers through PC makers and other OEMs