Don't pass this along

Gulbransen acknowledges that some customers may be forced to reactivate, but he believes most will understand the necessity. "In doing this, we're just trying to make sure the product is used in compliance with our license agreement, which has always said you should use it on a single computer," he says. "What it really does is prevent unauthorized pass-along of the CD, and one of the good things about the technology we're using is you can still give the CD to a friend and they can try it out on a trial basis. When they're ready to file their return, they just have to buy their own activation code. It's not that we consider pass-alongs to be piracy -- we know most people do so with good intentions."

Do you notice Intuit has a somewhat ambivalent attitude toward pass-alongs here, as if they want to both encourage it and discourage it at the same time? Why not just have a Microsoft-like product activation scheme that can't be used on another computer at all?

The answer of course is that Intuit is trying to have its cake and eat it too. The nature of tax software is that the customer who uses a program he borrows from a friend this year is a likely prospect to buy that same program next year, and Intuit doesn't want to lose that marketing opportunity. But now, rather having to wait a year to cash in, Intuit hopes to make that friend pay up as April 15 looms. Very neat.

Perhaps the TurboTax product activation scheme isn't spyware, but does that mean customers have no right to be upset with it? Absolutely not. Whether Intuit is choosing to collect personal information with it or not, it's still registerware in my book. Customers are still being limited in their usage of the product for reasons that have a lot to do with marketing and little to do with piracy. In my humble opinion, no software publisher should have the right to do that, any more than a book or video publisher has the right to keep you from passing its product on to a friend when you're finished with it.

It will be interesting to watch this situation during the next year, because I think it will provide us with the best test yet of whether or not software publishers can indeed force registerware down customers' throats. Microsoft's product activation was reluctantly accepted because most felt they had no alternative. And although Intuit has a dominant share of the tax software market, it has clearly opened the door to competitors with this move.

This year's TurboTax customers should recognize that they wouldn't be doing their friends any favors by passing along Intuit's booby-trapped CD. And next year let's hope they can find a tax program that will allow them fair use of the product they buy.