According to CRN, Microsoft is planning to require Vista and Longhorn customers with volume licenses to register and report their license key usage, ostensibly through some kind of licensing server running on Longhorn, and possibly a hosted server run by Microsoft. Although the article does not explicity state that product activation will be required, it seems pretty clear that de-activation will occur if there is a problem with the supplied license key, which is likely to have the same basic results (ie, calling Microsoft and having them turn your PCs back on).Currently, Microsoft uses an explicit product activation process for the OEM and retail versions of Windows XP, but volume licenses are exempted from this process. If some kind of activation or de-activation becomes automated, expect to go through the same kind of hassles sooner or later.

Activation under XP is tedious and error-prone when it is used frequently (trust me on this--Microsoft gives product testers retail license keys, and I have to go through this process all the time). First you have to enter the key, then the registration wizard automatically detects that the key has already been used, and the system starts counting down to automatic deactivation. Then you have to dial a phone number and provide the key to a computerized system all over again, only to be told that the key has already been used (again). At that point you are handed to a call center in India, where you finally get to talk to a human, who may or may not believe your reason for reactivating under the same key. If things go badly, you may have to repeate the entire process just to get a different human who will choose to cooperate. At best, it takes about half an hour to complete this process. If something similar happens under Vista volume licenses, I see no reason to expect that it would take less time.

Indeed, product activation is such a pain that Microsoft exempted large-scale buyers from the process entirely, and if you have a volume license key there is no activation required. Of course, software pirates have long since figured this out too, and volume licensing keys are often posted to various file-sharing systems for people to use with unlicensed copies of XP (why try to hack the activation process if you can just steal a license key that essentially does the job for you?).

From all outward signs, Microsoft is looking to bring an end to that practice. On the surface, this shouldn't work out too bad: if you have a valid volume agreement with enough licenses for all your systems, the automatic registration and enrollment should be fairly transparent. But it's what we don't know that frightens me here. Will hardware changes force a reregistration, like under XP now? How will dead activations be purged from the license server? Will there be a grace window for overlapping activations. If I replace my 500 desktops with 500 laptops, what will the licensing server think about it? How much extra time do I need to budget for installation due to this process?

Most important, will my company shutdown when the workers' PCs de-license themselves?

Obviously, these are things that IT management need to be concerned with. I'm sure that Microsoft has already considered most of this stuff and reached what they consider to be customer-appropriate solutions. However, they have different objectives than we do, so IT folks need to start thinking about this issue too, and reaching your own conclusions about acceptable behavior.