The new service may reflect Microsoft's ambition to create a system that protects the software industry's intellectual property rights in China.

Late last year, Microsoft launched a new suite of products called Software Licensing and Protection Services (SLPS). This set of tools was designed to help developers – from ISVs selling software to those working on internal line-of-business applications – protect their intellectual property, easily and flexibly create and license product versions, track product and feature usage, and integrate into back-end business processes.

Microsoft developed SLPS after it acquired Secured Dimensions – a company that had a unique .NET protection technology, licensing server and hosted online service – early last year. According to Microsoft sources, enterprises that adopted SLPS saw their piracy losses fall by five percent.

Then late last year, a Microsoft team led by Joe Peterson, corporate vice president and the executive responsible for copyright protection, began to quietly promote SLPS to Chinese enterprises. In spite of the low-profile promotion, it sparked excitement among Chinese software companies and online software technology users. According to some, SLPS could put an end to piracy and reflected Microsoft's desire to establish a system in China that would protect the software industry's IP rights.

The very positive response to SLPS is not surprising, considering how piracy has adversely affected the development of China's software businesses for many years. An article in ChinaRealNews revealed that the top 20 Chinese software companies only hold a 10 percent market share in China, while the top 20 U.S.software vendors in the United States have an 80 percent market share. According to Peterson, Microsoft hopes its SPLS can help raise Chinese software enterprises from their innovation slump caused mainly by intellectual property problems.

According to Microsoft, the advantages of using SLPS include:

·         Code Protection – SLPS adds a new level of sophistication to traditional code protection solutions by providing a unique transformation algorithm that helps keep sensitive code inaccessible—without affecting the functionality of applications.

·         License Enforcement – SLPS's strong, flexible, and configurable license management is seamlessly integrated into protected application code to help ensure license security and integrity. And its Web-based interface offers a rich set of licensing features, enabling users to easily define licensing attributes that meet their needs.

·         Innovative Business Models – Tailored products can be created from a single code base without rebuilding. Products can be easily defined, licenses generated, and customers activated in minutes. Trial versions can be created and easily tracked—and any application can be turned into a time-limited or try-and-buy version without modifying or recompiling code.

·         Positive Customer Experience – SLPS provides the ability to offer customers the ability to purchase what they want, when they want it, and use it how they want.

·         Application Management - Microsoft SLPS helps bridge the software and the software business. The software lifecycle management can be streamlined by integrating to CRM, ERP, and billing systems. Bottom line: lower TCO and higher ROI.

Mr. Peterson and his team have visited more than 20 major cities and over 2,000 software vendors across China, and a host of software companies there, including eAbax, have shown their strong interest in licensing SLPS. Leading vendors as Neusoft, UFIDA Software Co. Ltd and Kingdee International Software Group Company Limited have expressed their intention to partner with Microsoft in this regard.

Is SLPS the answer to China's software IP woes? A system that prevents piracy while expanding opportunity, manages the entire software lifecycle—from idea to revenue, and enables users to more effectively protect, package, license, sell, and control the use of their software is certainly a good start. It will be interesting to see how the industry and government align themselves as this new tool is integrated into software innovation.