The following describes Microsoft Product Activation (MPA). MPA is an umbrella term for technology such as Windows Product Activation (WPA) in Microsoft Windows XP and Office Activation Wizard (OAW) in Microsoft Office XP.
MPA is designed to reduce software piracy. For Original Equipment Manufacturer (OEM) licenses, MPA reinforces the End User License Agreement (EULA). Each pre-installation is a single unit license that is not transferable to another computer. Products that include MPA technology must be activated with the Microsoft License Clearinghouse. To track individual licenses, standard installations of MPA-enabled products require a unique product key.

MPA is designed to stop a form of piracy that is known as casual copying. Casual copying is the sharing of a single license for a product across multiple, unlicensed installations.
For example, a customer purchases a copy of Windows XP and installs it on a computer. Then, this customer loans the media to a neighbour, who installs it on a different computer. The second installation is not legitimate and MPA is designed to prevent that unlicensed use.

MPA works by activating a product in accordance with the EULA that is included with the purchase of a genuine Microsoft product. Product activation is different from product registration (even though they share user interface space in Office XP). Activation is designed to authenticate and activate the software package. Activation does not require that the user provides any personally identifiable information.

Users can register the product and supply personal information if they want to. With the registration, customers are automatically notified of updates and changes. MPA is software-based and requires no hardware keys (dongles), floppy disks, or other external tools. MPA is intrinsic to the software.

Note Some users may have to reactivate MPA if they upgrade a significant number of components in their computer, for example motherboards. During Internet activation, digital certificates are exchanged between the user and Microsoft. Manual telephone activation provides the user with a 42-digit Confirmation ID. The activation data that is exchanged is used only for the purpose of activation. Activation can be anonymous and requires no personally identifiable information from the end user.

• Product software
  The product software runs on the user's computer and contains the product activation executable code. It generates the Installation Identifier, contacts the Microsoft License Clearinghouse upon user request, and processes the Confirmation Identifier/License that the clearinghouse returns.
• Installation identifier
  The Installation identifier (ID) represents the user's software installation and is made up of a Product ID (PID) and a Hardware Identifier (HWID). The PID is generated from the product key that is used during installation. Typically, the PID is located on the CD case or on the Certificate of Authenticity (COA). A unique PID is created with every genuine Microsoft product. MPA uses this PID as the basis for making sure that the product installation that is being activated meets the terms of the EULA.
• The Hardware ID is generated from various general components of the computer. These components do not contain any personally identifiable information, and the Hardware ID is used only for activation.
• Confirmation identifier
  The Confirmation Identifier (ID) contains the signed license number that is used to activate the software. The Confirmation ID is based upon the Installation ID and works only for the computer that is requesting it. Microsoft License Clearinghouse
  The Microsoft License Clearinghouse (CH) is managed by Microsoft. The CH processes the activation requests and issues the Confirmation ID. The CH is built upon Microsoft server products including Microsoft Windows 2000 Advanced Server, Microsoft Internet Information Server, Microsoft SQL Server and Microsoft Certificate Server.

MPA is included in the Retail and OEM versions of Office XP and in Windows XP. To complete the activation of these products, users can use any one of the following methods:

• The MPA-enabled product authenticates over the Internet.
• Regional and localised call centres (Microsoft Licensing Clearing Houses) will handle direct contact with customers.

A user can run Office programs a total of fifty times without having to activate Office. During this time, Office reminds the user at the start of any Office program to activate in the manner that is described during startup. If the user does not activate within fifty starts of any combination of Office programs, the user's license rights are limited under the terms of the EULA and Office switches to a reduced functionality mode. The user cannot reset this value by reinstalling Office.

Activation can be anonymous with no personally identifiable information required. One major difference between WPA and OAW is the way that the grace period is handled. You can start Office 50 times before the functionality of the installation is reduced by the disabling of the New and Save options. This behaviour starts with the fifty-first start of an Office program. To obtain full use of the Office installation, the user must complete the activation.

Users can run Windows for 30 days before they must activate the product. In Windows, users are reminded with increasing frequency as they near the end of the 30-day grace period to activate in the manner that is described while the Setup program runs. If users do not activate by the end of the grace period, they must activate upon the next logon. Users cannot use the full Windows functionality until they successfully complete activation.