What is  Windows Product Activation (WPA)  and How It Works?
Windows Product Activation or WPA is a license validation procedure introduced by Microsoft Corporation in all versions of it’s Windows operating system. WPA was first introduced in Windows XP and continues to exist in Windows Server 2003, Windows Vista, Windows Server 2008 and Windows 7 as well. WPA enforces each end user to activate their copy of Windows so as to prevent unauthorized usage beyond the specific period of time until it is verified as genuine by Microsoft. How WPA really works was a closely guarded secret until GmbH analyzed WPA using a copy of Windows XP RC1 and published a paper on their findings.
In this post you will find answers to some of the most frequently asked questions about Windows Product Activation.
Why activation?
Microsoft’s intention behind the  activation is to limit the usage of it’s Windows operating system to  only one machine for which the retail license is issued. Any other  computer which runs on the same license must be disallowed from using  the software. Thus WPA demands for activation of the product within 30  days of it’s installation so as to ensure that it is genuine. 
What does “Genuine Windows” means?
The copy of Windows is said to be  genuine only if the product key used during the installation is genuine.  It means that a given product key (retail license) must be used to  install Windows only on one computer for which the license was  purchased. Thus if the same key is used for the installation on another  computer, then it is said to be a pirated copy. 
Exactly what information is transmitted during the activation?
When you activate your copy of Windows you are transmitting an Installation ID  code to the Microsoft either by phone or Internet depending on the  method you choose to activate. Based on this, the Microsoft’s licensing  system can determine whether or not the installed OS is genuine. If it  is said to be genuine, then the system will receive the Activation ID which  completes the activation process. If the activation is done via  telephone then the Activation ID needs to be entered manually to  complete the activation process.
What information does the Installation ID contain?
This Installation ID is a 50-digit number which is derived from the following two data.
1. Product ID – It is  actually derived from the 25-digit product key (the alphanumeric value  that is printed on the sticker over the Windows CD/DVD case) that is  entered during the installation of the operating system. The Product  ID is used to uniquely identify your copy of Windows.
2. Hardware ID – This value is derived based on the hardware configuration of your computer. 
The WPA system checks the following 10 categories of the computer hardware to derive the Hardware ID:
- Display Adapter
- SCSI Adapter
- IDE Adapter (effectively the motherboard)
- Network Adapter (NIC) and its MAC Address
- RAM Amount Range (i.e., 0-64mb, 64-128mb, etc.)
- Processor Type
- Processor Serial Number
- Hard Drive Device
- Hard Drive Volume Serial Number (VSN)
- CD-ROM / CD-RW / DVD-ROM
How is the Installation ID validated?
The Installation ID needs to be  validated to confirm the authenticity of the installed copy of  Windows. So after the Installation ID is received by Microsoft, it is  decoded back so as to obtain the actual product key and the hardware  details of the computer involved in the activation process.
The Microsoft’s system will now look to  see if this is the first time the product key is being used for the  activation. This happens when the user is trying to activate his Windows  for the first time after purchase. If this is the case then  the Installation ID is validated and the corresponding Activation ID  is issued which completes the activation process.
However Microsoft system will  now associate this product key with the hardware ID of the computer  and stores this information on their servers. In simple words, during  the first use of the product key, it is paired together with  the Hardware ID and this information is stored up on the Microsoft  servers.
What if a computer running a pirated copy of Windows attempts to activate?
 The activation fails whenever the copy  of Windows installed is not said to be genuine. This usually  happens when the product key used for the installation is said to have  been used earlier on a different computer. This is determined during the  activation process as follows:
During the validation of the  Installation ID, the Microsoft’s system checks to see if the same  product key was used in any of the previous activation processes. If yes  then it looks to see the Hardware ID associated with it. The computer  running a pirated copy of Windows will obviously have a  different hardware configuration and hence the Hardware ID will  mismatch. In this case the activation process will fail.
Thus for a successful activation, either of the following two cases must be satisfied:
- The product key must have been used for the first time. ie: The product key should not have been used for earlier activations on any other computer.
- If the product key is said to have been used earlier, then the Hardware ID should match. This happens only if the same computer for which the license was genuinely purchased is attempting for subsequent activation.
What about formatting the hard disk?
Each time the hard disk is reformatted  and Windows is re-installed, it needs to be re-activated. However the  activation process will be completed smoothly since the same computer is  attempting for subsequent activation. In this case both the product key  and the Hardware ID will match and hence the activation becomes  successful.
What is I upgrade or make changes to my hardware?
In the above mentioned 10 categories of  hardware, at least 7 should be the same. Thus you are allowed to make  changes to not more than 3 categories of hardware. If you make too many  changes then your activation will fail. In this case, it is necessary to  contact the customer service representative via phone and explain about  your problem. If he is convinced he may re-issue a new product key for  your computer using which you can re-activate your Windows.
Some things WPA does not do
- WPA does not send any personal information at all about you to Microsoft. There is still an option to register the product with Microsoft, but that is separate and entirely voluntary.
- If you prefer to activate via phone, you are not required to give any personal information to Microsoft.
- WPA does not provide a means for Microsoft to turn off your machine or damage your data/hardware. (Nor do they even have access to your data). This is a common myth that many people have about Microsoft products.
- WPA is not a “lease” system requiring more payments after two years or any other period. You may use the product as licensed in perpetuity.
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