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In an unprecedented move only John Ashcroft could love, Office v.X enforces the rule using a little UDP (User Datagram Protocol) magic. Whenever you start up any Office application, it throws out a UDP packet, which includes your license code to Port 2222 on your local network. If another machine responds from that port with the same code, your local application will terminate with a polite notification that you've exceeded your license. The idea is that both you and your Office suite can exist in only one place at one time.

The good news is that Office doesn't seem to be notifying Microsoft of any accidental or purposeful piracy attempts. The UDP traffic simply bounces around your LAN. The bad news, however, is threefold: First, users can't split Office applications across two machines, so you can't run Entourage on machine A and Excel on machine B simultaneously. Second, there's no such thing as an incremental license. If a home user wants to run two different Office applications on two different machines, he or she has to fork over an additional $499. Third, by using standard IP technologies (such as UDP), Microsoft has opened up your machine to a host of denial-of-service attacks. All a miscreant needs to do is run a malformed header against Port 2222 and, presto, Office v.X will crash.

For now, I'm certain many users will risk conducting a bit of UDP-port-blocking magic of their own to efficiently exercise their own Office v.X licenses--or simply to secure their own desktops. My hope is that Microsoft, in turn, will look a little more closely at its licensing options before enacting draconian measures. Here's a hint: An incremental $50 license extension per seat would meet many users' budgets.