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Changes to Windows XP Product Activation in Service Pack 1

By: Arie Slob

Windows XP Microsoft will be making a number of changes to Windows XP's product activation in the soon to be released Service Pack 1 (SP1). For a general overview of Windows XP product activation see my article: More On Windows XP Product Activation.

According to Microsoft, they will make a number of changes to Windows XP's product activation, aimed at ensuring licensed customers receive full benefits and to make it more difficult for those who pirate software to obtain these same benefits. These changes are:

  • Eligibility for Windows XP Service Pack 1 and Windows Update
  • Additional grace periods for hardware out-of-tolerance situations
  • Volume license key (VLK) encryption
  • Product key inclusion in Installation ID for activation
  • Repair of activation circumventions

Eligibility for Windows XP Service Pack 1 and Windows Update

Microsoft has determined through investigations that most pirated installations are made with either of two volume license product keys (keys used by corporate or other volume license customers to install Windows XP).

Windows XP SP1 ships with a list of the two product IDs (a product key produces the product ID found in My Computer > Properties after setup has completed) that are created by the pirated product volume license product keys. To determine eligibility for the update, SP1 compares the Windows XP product ID on the system to this list. The comparison and the list reside locally on the users PC and no information is sent to Microsoft as part of this process. SP1 for Windows XP will fail to install on installations of Windows with one of the following product IDs:

  • XXXXX-640-0000356-23XXX
  • XXXXX-640-2001765-23XXX

When such a product ID is found during installation of SP1, the installation will fail with a message similar to this:

Service Pack 1 Setup Error
The product key used to install Windows is invalid. Please contact your system administrator or retailer immediately to obtain a valid product key. You may also contact Microsoft Corporation's Anti-Piracy Team by emailing if you think you have purchased pirated Microsoft software. Please be assured that any personal information you send to the Microsoft Anti-Piracy team will be kept in strict confidence.

Access to Windows Update will also be restricted for licensed users. Eligibility for access to Windows update will be determined by checking that the product key used to install Windows XP is valid and was manufactured by Microsoft. Two pieces of information will be sent to Windows Update when accessing the Windows Update web site:

  1. A hash (one-way mathematical transformation) of the product key used to install Windows XP
  2. The Product ID

Windows Update will compare the product key hash and Product ID to a list created from valid, Microsoft-manufactured product keys. The check must be done on the Microsoft side because the list the information is validated against is very large (approximately one billion values). Once the product key hash and Product Id are verified, they are both discarded. Neither the product key hash nor the product ID are stored by Windows Update.

Additional grace periods for hardware out-of-tolerance situations

Microsoft will add a three-day grace period for users who are asked to re-activate due to changes in their hardware configuration. Before SP1, a user was required to reactivate immediately upon boot if significant hardware changes had occurred. With SP1, users will have three days to complete this re-activation. According to Microsoft, there are a total of twelve (12) of these 3-day grace periods built into an installation of Windows XP SP1. A re-install of the operating system will reset this counter. Volume License Key (VLK) Encryption An encryption feature is added to unattended setups of Windows XP SP1. This feature is only for customers with volume licensing agreements with Microsoft such as Microsoft Select, Microsoft Enterprise Agreement, and Microsoft Open License. Customers who place their VLK in an unattended setup file (unattend.txt) will be able to encrypt the VLK such that it will be time limited (in day increments from 5 to 60 days) and not visible as plain text. For more info, see the Microsoft Licensing Web site.

Product key inclusion in Installation ID for activation

To protect against product key cracks by software pirates, the product key used to install Windows XP will be included in the Installation ID for all activations completed after SP1 has been installed. The product ID is already part of the Installation ID created for activation. Internet activations will send the entire product key while telephone activations will send a hash value of the product key in order to limit the increase in size of the telephone Installation ID. The telephone Installation ID will grow from 50 digits to 54 digits due to this change.

Microsoft will compare this product key or product key hash sent during activation to a list of valid, Microsoft-manufactured product keys. If the key used to install Windows XP and subsequently attempt to activate is not valid and manufactured by Microsoft, the activation attempt will fail.

Repair of Activation Circumventions

SP1 for Windows XP will also contain fixes to cracks used by software pirates to circumvent activation. Installations of Windows XP patched by one of these pirate cracks will require activation after SP1 has been installed. Windows XP installations that remain un-activated past the 30-day grace period can still be accessed for interactive use by booting to non-networked safe-mode.

Additional Windows XP license discounts

Another feature added to SP1 is that when you attempt to activate a Windows XP SP1 installation with a product key that had been used on another PC you will get an error message asking if you want to buy an additional Windows XP license. In certain countries Microsoft will offer additional licenses with a 15-30% discount.

Microsoft's so called "discount" doesn't amount to much though, and I'd like to see them offering a deal similar to Apple with their new Mac OS X, who are offering a 5 license Family Pack for $199.00, which amounts to a discount of close to 70% on 5 Single User licenses (at $129.00).