Microsoft has assured its larger customers that their volume purchases will not be affected by its latest licensing changes, but smaller users are concerned that they will suffer.

The software giant's Product Activation for Windows is included in the latest beta version of Whistler, the codename for the next version of Windows. It is designed to eliminate software piracy but, in turn, means that users will be forced to endure a more lengthy installation process.

The software licensing code is tied to both a CD and the machine of initial installation, requiring users to apply for individual codes via the telephone or web on each installation or reinstallation.

Larger corporate organisations voiced their concerns at the scheme, saying that they would have to duplicate the process many times. They also pointed out that the time spent installing and reinstalling software would increase, draining IT resources and budgets.

But Julia Philpot, Microsoft's UK anti-piracy manager, said that such fears are unfounded. "Organisation and network installations will not be impacted at all. All they need is a product key - an unlock key - so they can freely copy it within the organisation," she explained.

Individual users purchasing straight-from-the-box products will still have to activate them via an electronic clearing house or by phone. Philpot claimed that this will flag up any counterfeit goods, allowing Microsoft to trace the source and crack down on software piracy.

"In principle, for the IT industry I think it's a good thing," said Nigel Wilson, technical director at consultancy PoulterNet. "But some people will be slightly concerned that as soon as you install it, you're being monitored."

Microsoft was unable to give details of how the new licensing regime would affect manufacturers worried about the scheme.

Philpot said that the company hopes to make an official announcement soon.

First published in Computing