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The Empire Strikes Back - in China
jaymzter writes: "Reuters is reporting that Microsoft is dumping $750 million into China over the next three years. According to MS CEO Steve Ballmer, "What's good for the local industry in every country is good for Microsoft", especially when that other country is actually promoting and developing home grown Linux. From the article it looks like MS is willing to overlook China's legendary software 'sharing' as long as the government stays tight with Windows."
With active promotion of Linux in China, Microsoft has to be realizing that it's better to let rampant piracy of their products continue and make some profit from those who do buy than to allow the creating of a large incubator for Linux - something that could potentially threaten their market share in countries with more enforced IP laws.
Why?
Seems that Microsoft finally noticed that not everybody is equal and although Europe and US are already hooked on their drugs, China is still not and so they just need to back up a little, distribute for free a little while longer, before they will collect. And China is a potential market of the size of Europe and US together. So be sure they will collect eventually.
If programs would be read like poetry, most programmers would be Vogons.
Microsoft has huge reserves, don't get me wrong, but it seems like, more and more, they are having to spend a lot of money to fend off their competition. 750 million is only a drop in the bucket, but it does add up eventually.
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Microsoft makes an annoucement that they're "investing" $750 Million somewhere, but what does that really mean?
.NET is this just giving away the razor while charging for the blades (something they want to do anyway and are possibly just piloting in China)? Does the number also include promotion and advertising budgets (beyond any give-aways)? And how much is for "real" apps vs. silly "$700 of free Microsoft Software" packages with programs like Free-Cell having MSRP's of $25 or more?
I mean, where does that figure actually come from? I imagine it's the total retail price of products they're going to give away. Or it could be the total "discount" they're prepared to give off stand alone or bundled packages (50% off each product X expected volumes). With
The bottom line is, this is a pretty silly press release/story. They can pretty well choose an arbitarily high number if they base it on the suggested retail value of product, when in actual fact, their actual net investment (variable costs) might be next to nothing. They're not even giving up opportunity costs if they're just competing against pirated copies.
Linux distros should do the same thing by assigning an arbitrary retail value to every freely distributed copy and calling that the open source "investment" in each implementation/industry/country.
My next sig will be ready soon, but friends can beat the rush!
I don't blame them - Microsoft could easily slip some backdoors into the Chinese-language version of Windows, especially if they were pressured to do by the State Department.
The Chinese won't give up Linux until Microsoft lets them see the code. The question is, can Microsoft trust the Chinese? In the U.S., Microsoft could take you to court for breaking a NDA - they have no such guarantees in China. Portions of Microsoft's treasured Windows source code might end up in Red Flag Linux.
This is what they did as a test run in Mexico. They know these countries are poor and by throwing a few million bills at them, they sucker them into the Microsoft Windows upgrade cycle. Linux can only offer reliable, secure, and inexpensive software while Microsoft just plain pays them to use Windows.
;)
Wasn't it Microsoft who paid $5billion for AT&T to used MS-WinCE on a few hundred thousand set-top boxes? And then they couldn't provide the backend software to run it so AT&T walked away with $5billion.
When you have $40+billion in monopoly money and billions still streaming in, you can start paying people to use your product when you know they will not be able to move off it in the future.
Ask any drug dealer how this works......They'll tell you it a sure thing.
I hope China asked for cash too.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
This is very funny for anybody who knows how the linux china market works.
Before you start, you have to understand that there are a number of Linux Distribution companies in China, most of the started small and rode the tech bubble there, raising capital on the hope of following companies like Redhat etc.
The difference in china is that prior to getting listed, they had to be 'blessed' by the powers that be - The communist goverment. - due to rampant quasi corruption, this usually means that if the cardres that added their blessing usualy buy in personally - and stay in (due to the chinese habit of sticking with the family).
What this means is that all the major Linux companies have very prominant central party members on their board. - imagine George Bush's son on the board of Redhat. - with no accountability stuff..
Basically the top guys are so tightly into the idea they can make money from their connections using linux, that microsoft is fighting a battle that it lost a few years ago...
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Please try and understand. China isn't a communist country. China is a country full of people who are possibly even more capitalistic than we are here in the good ole' US of A - but they just happen to have a corrupt oligarchy of a government whose only goal appears to be staying in power, and are unfortunately not blessed with a strong constitution and separation of powers that we (and other parliamentary democracies) have.
Remember, there's no history of democracy in China. Ever. Most Chinese people I've met would like to have it, but many are skeptical that it would work.
This atmosphere helps nourish Linux and the Open Source movement in China - there are large numbers of talented and engaged software engineers, many of whom have little or no money to spend on expensive (and mostly bullsh*t) software licences and hardware. Open Source fosters innovation, and it's better than piracy because no one can prosecute you for pursuing it, and you get the source, whereas pirated commercial software is rather opaque in that regard.
Personally, having worked at MS in my past, I would hope that China can grow their own OS's. I hope that MS fails there - it would be a huge help to the Open Source cause if they fail.
... can we have your liver, then?