Product Activation is the process through which a piece of software is linked to the hardware upon which it is installed via a technological method.  It is considered a form of Digital Rights Management (DRM) [1], however due to the pervasive and prevelant nature of Product Activation, we feel that it should be placed in a category of its own.

While implementations vary, the most common form of Product Activation works in the following manner:

1) The software combines the Product Key entered during installation with a key that is generated via data regarding the host system's hardware.

2) This combined data forms an Installation ID, which is sent to the manufacturer, who validates it, and uses it to create an Activation Key that is sent back to the host system to complete the activation process.

3) If at any time the host hardware changes (after an upgrade, for example), the Activation Key will no longer be valid, as the data regarding the host system's hardware inside of the Key will no longer match the current hardware.  This will cause the software to require re-activation.

Typically, software that has not been activated will fall back to a "limited use" mode, in which it will not function completely, or will only function for a set period of time.