Code for Microsoft System Is Leaked

An authorization code that allows users to install Microsoft Corp.’s new operating system for computer servers has leaked onto the Internet, raising the specter of widespread piracy even before the software is released.

The key for Windows Server 2003, scheduled for distribution this month, may be traded in chat rooms and elsewhere along with the software itself. The software will retail for $999 to $7,999 depending on the size of the system and the number of features it includes; corporate customers will get better deals.

“Microsoft is currently investigating the details of the leak,” Microsoft spokeswoman Michelle Hinrichs said Tuesday. “As well, as part of our normal course of business we scour the Internet for pirated software and keys.”

Microsoft doesn’t estimate its lost sales, but piracy is a huge problem for the Redmond, Wash.-based giant and others in the software industry. At least 90% of the pirated versions of the Windows XP operating system for desktop computers in use today are traceable to two stolen keys, the company said.

In 2001, 40% of the world’s software was pirated, according to the Business Software Alliance’s latest annual study. That figure was up from a low of 36% in 1999 and accounts for $11 billion in lost revenue, the group said.

Microsoft began a two-step authorization process last year that requires many users to call the company and confirm what hardware they are using with Microsoft operating systems. But volume purchasers can skip the second step, and the code that leaked was of that variety. The company still is trying to trace the source of the leak.

Users of purloined code won’t get security patches and other updates that are distributed automatically to legitimate buyers, Microsoft said.

Some piracy is inevitable, and the new leak “isn’t super-shocking,” Hinrichs said. “There is no single silver bullet to curbing all forms of piracy.”

Microsoft sometimes audits big customers, and those efforts might expose pirated copies.

The company’s shares rose 41 cents to $25.58 on Nasdaq.