Microsoft won't rely on its usual antipiracy software to block counterfeit copies of the just-announced $3 bundle of Windows XP, Office Home and Student 2007, but it will build a new system based on scratch cards, the company said.

Rather than using its Windows Genuine Advantage (WGA) validation and notification tools, as well as software-based product activation - both of them often disparaged by users - the Student Innovation Suite will be protected by a scratch-off card process based on the same technology Microsoft now uses for pay-as-you-go computing in several foreign markets.

"Microsoft is building a new card-based activation process for countries that order PCs with Microsoft Student Innovation Suite [MSIS], and it will be administered by Microsoft," said a company spokeswoman. "Microsoft is leveraging the FlexGo technology to include with MSIS to help governments ensure that the solution is going to and stays with the intended audience. This involves the 'scratch-off card' separate from the PC."

First announced in May 2006, FlexGo is a pay-as-you-go initiative that lets users acquire a PC for about a third of its normal cost. They then buy usage hours to actually run the machine. Among the distribution channels for the hours are scratch cards, similar to the long-distance calling cards sold at convenience stores and other retail outlets in the US. Microsoft currently operates FlexGo in Brazil, India, Mexico, Russia and China.

Microsoft will deliver inactivated installation media to resellers or local systems builders preselected by the governments. The company will separately also deliver activation cards to the governments, which will then distribute them along with the PCs.

"When students receive their PC, they will also receive a separate 'scratch-off' activation card they will use to activate their software," the spokeswoman said. Students will go to a website to enter the licence number they see on the card. "The licence is then uniquely tied to the software on that machine," she added.

"On the surface, that sounds reasonable," said Michael Cherry, an analyst at research firm Directions on Microsoft. "I suspect that [the activation difference with MSIS] is a way for Microsoft to keep costs down by eliminating calls to support."

MSIS includes Windows XP Starter Edition, Microsoft Office Home and Student 2007, Microsoft Math 3.0, Learning Essentials 2.0 for Microsoft Office, and Windows Live Mail desktop. By the end of the year, MSIS will be offered to some qualifying governments that supply PCs direct to students; all countries with economies defined as low- or middle-income by the World Bank will be eligible in 2008.