Microsoft's piracy problem may grow in future

Microsoft has been counting on gains against unlicensed software to boost revenue from the Windows unit, which accounts for a huge chunk of overall profits and sales. However, one of the company's own decisions could make its anti piracy battle more difficult.

With Windows Vista, Microsoft took an extremely tough stand on piracy. Computers that were not properly activated within a short period of time went into a virtually unusable state known as reduced functionality mode. In the newly released Service Pack 1, however, Microsoft is softening its stance somewhat. The reduced functionality mode is gone, and in its place, a series of warnings and visual indications that a computer is not running a genuine copy of Windows.