They have entered the video game console market with their xBox, and in this market technical copy control is a firm requirement.
Microsoft is active in foundation technology for DRM (as exemplified by this patent for DRM at the O/S level).
Microsoft is part-owner of ContentGuard, a company created in conjunction with Xerox, which developed the XrML standard which Microsoft also promotes. ContentGuard is turning further XrML development over to standards bodies and its main remaining value to Microsoft is bringing a large body of Xerox-originated DRM patents into the Microsoft fold.
Even mighty Microsoft wisely does not claim that they can make uncrackable DRM; they published an insightful paper which implies as much. Just being Microsoft makes them a huge target for black hats and thereby increases the probabiity that their security technologies will be cracked. The fact that they are deploying DRM anyway shows that Microsoft understands DRM is a good risk management tool in an imperfect world.
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..and now they're got the bases covered:
Windows Media Player DRM
Today the most visible DRM from Microsoft is the media-protection technology in
Windows Media Player. From a technology point of view, WMP and its DRM are quite capable, within the limits of the inherent wrapper architecture. With WMP 10, they have raised the bar in some areas, such as having DRM rules survive content transfer between various devices. But whether WMP dominates in the long run depends largely on factors other than DRM. Clearly they have realized this too, as they have developed high-quality codec technology and brilliantly lobbied to get it supported in consumer electronics such as digital audio players and the next-generation DVD standard. They have also helped foster a multivendor content ecosystem in response to Itunes, under the playsforsure logo program.
Windows Rights Management Services
In early 2003, Microsoft announced Windows Rights Management Services (WRMS) , which for the first time is to support third party development of DRM-based applications. (More on this here.) The focus is Web-based; neither WRMS nor any other Microsoft product appears to be directed at providing DRM for native third-party software such as PC games. Microsoft is using WRMS to add DRM to Microsoft Office. (Actually, they call it IRM (Information RIghts Management). This is causing some concern in the everybody-but-Microsoft camp that Microsoft's DRM will be proprietary, making it not only difficult, but arguably illegal under the DMCA to make non-Microsoft products interoperable. However there are third parties such as Authentica building products on the WRMS foundation already.
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Next Generation Secure Computing BaseMicrosoft's controversial vision of the "secure PC' and "secure OS" formerly known as Palladium , has has an interesting history. While it may be desirable for enterprise applications, for individual consumers with PCs it has yet to tell a convincing story. The technology has potential for misuse, and perhaps fearful of a backlash similar to what Intel experienced with its CPU Serial Number Fiasco, Microsoft soft-pedalled Palladium in 2002, and in 2003 offered an olive branch to other PC industry players by forming the relatively inclusive Trusted Computing Group. For a while eveyone expected the Longhorn (now "Vista") release of windows to support NGSCB, but Microsoft has backed off on that - probably due to a combination of complexity, poor public perception, and lack of deployed hardware.
An early in-house DRM technology, before WRMS. Product Activation is designed to force users to perform an on-line registration of software such as Operating Systems or Office after a certain period of use. Such server-based registration can prevent common pirate tactics such as the sharing of product serial numbers. It also causes concern about privacy, rightly or wrongly, since it's not clear to the average user exactly what information Microsoft is getting during the on-line interactions.
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The xBox deserves a mention even though this site doesn't emphasize game consoles, because impressive security technology efforts were reserved for the xBox. Even so, most of the security has been exposed by determined and intelligent hackers. Very little of this technology is applicable in the broader e.g. Windows PC arena. For more on this see our DRM Dictionary entry on the xBox.
The Bottom Line
Microsoft's potential to develop and deploy DRM technology is unmatched. For a pure DRM technology developer to compete directly with Microsoft is foolish. In the long run, Microsoft may do with DRM what it did with Web browsers - give away high-quality software so that competitors who have to charge for it cannot survive independently. They are arguably doing that already.
However, there are opportunities for third parties. One sort of opportunity is due to gaps in their strategy - for example, the lack of a PC game-oriented DRM technology. The other sort of opportunity is deliberate - Microsoft knows it need third-party allies to make its Windows Media ecosystem dominate over Apple.
Microsoft's DRM capability set is impressive, and they may have what some content providers need out of the box, for free. But for now, both content owners and DRM vendors should keep exploring third-party DRM technology as well.
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