Microsoft To Invest Heavily In China

abb_road writes "As part of Chinese President Hu Jintao's recent visit to Redmond, Microsoft is announcing plans to invest $900 million dollars directly in software and hardware companies in China. The announced goal of this investment is to reduce software piracy and establish Windows-dominance in the region; what's not clear is if they expect the reduction to come from local business pressure or more direct government intervention." From the article: "To now, Microsoft's investment efforts have made little headway in reducing piracy. The company should be booking about $1 billion on annual sales of some 20 million PCs in China, says Paul DeGroot, an analyst at consultancy Directions on Microsoft. Instead, sales there are about $100 million, he says."

Comments

One question

[Anonymous Coward]

How do you say "Business Software Alliance" in Chinese? Will they get to use tanks?

Re:One question

[Anonymous Coward]

One other question: Does "one" mean "two" in NewSpeak?

Re:One question

[Anonymous Coward]

How hard can it be to count to two?

Re:One question

[punkass]

If it does, you're missing a question.

Re:One question

[Anonymous Coward]

For a /. reader, infinitely.

Combat piracy??

[gasmonso]

Seeing as how China is the piracy capital of the world. I doubt Microsoft can do little to stop it. Having been in China, I can say that the piracy market is impressive. Every market you go to you'll find dvds, software, and everything else on the cheap. I think the going rate for DVDs was about $1 and thats a fully labeled DVD with sleeve. Windows XP was going for a few more $. Good luck Bill, you're gonna need it!

http://religiousfreaks.com/

Re:Combat piracy??

[suv4x4]

Seeing as how China is the piracy capital of the world. I doubt Microsoft can do little to stop it. Having been in China, I can say that the piracy market is impressive. Every market you go to you'll find dvds, software, and everything else on the cheap.

Exactly the case here (Bulgaria) in 1998-2000, the piracy is ripe, and actually Microsoft is indirectly encouraging piracy (do you remember they didn't even require you to enter a serial in Windows 95?) in plenty of political and technological ways.

Then, when the market is hopelessly stuck with Windows (and to a certain degree Office) they come and harvest the crops, by launching a massive anti-piracy scheme, checks in firms for genuine software and so on niceties.

Microsoft was getting ready to go harvest in China for quite some time now, it was a known thing to come. The huge piracy in China is actually a blessing for Microsoft, and they have a well thought plan how to take advantage of it.

As a matter of fact, if every human on the planet was so honest that he'd never pirate Windows, we'd be much less dependent on it in first place, and Microsoft wouldn't sell so much. That's obvious.

Re:Combat piracy??

[$RANDOMLUSER]

I think that when you compare incomes in terms of hours-worked per bags-of-groceries, that the $1 the average Chinese is paying, that it is equivalent to the $18 the average U.S. citizen is paying.

I'm not saying that the piracy is OK, but that the amount paid isn't so cheap as it sounds to us.

Re:Combat piracy??

[gasmonso]

That $1 is cheap to them when compared to the actual cost of the goods. Sure it's not as cheap to them as it is to us, but $1 for a DVD vs $15 is a big difference to them aswell.

http://religiousfreaks.com/

Re:Combat piracy??

[ch-chuck]

That'll likely change when they get enough critial mass from being software and media consumers to producers and then have a financial interest in the development of it, then you want to enforce the law. As someone pointed out, the US was a big book pirating country in the 19th century, publishing Dicken's works withough paying etc, but authors like Mark Twain and others pressured congress to put the brakes on such things. That is, at the time, the US was to Britain like China is to the US today.

Re:Combat piracy??

[Yvanhoe]

According to the big mac index, a 1$ DVD is ~1 chinese big mac. A 15$ DVD is at 4 US big macs. It is not a x15 ratio but still a good x4. A resonnable price for chinese market would then be 4$...

Re:Combat piracy??

[misleb]

On the other hand, China is unique because they are so huge. China has the power to collectively say "Screw you. We're making our own Windows-like OS." (or maybe they'll adopt linux). Microsoft could be in for a rude awakening.

I see your point. I totally agree that, normally, piracy works in favor of Microsoft, but I think China may be an exception. It will be intersting to see what happens.

-matthew

Re:Combat piracy??

[suv4x4]

On the other hand, China is unique because they are so huge. China has the power to collectively say "Screw you. We're making our own Windows-like OS."

The rest of the world is also not small but they can't collectively say anything. The fact that China is one country helps a little in the process. Now if the government of a big totalitarian country decides to get pissed about it, that's totally another question...

Thing is I don't know of the Chinese government showing signs of wanting Windows out of their country.

As a matter of fact Microsoft has suffered far more trouble from US and EU with all those browser / media player antitrust suits (and Windows is still there thriving).

Re:Combat piracy??

[danpsmith]

When you get paid 2,000 dollars a year, a 1 dollar DVD is about all you can afford.

MS should go to hell for dealing with such a fascist POS nation. Google, don't think I don't feel the same way about you. We really need to start regulating the means by which multi-national corporations do business with fascist regimes. Their ability to pump money into the government gives Communism the life support that it died without in the USSR.

Re:Combat piracy??

[misleb]

Thing is I don't know of the Chinese government showing signs of wanting Windows out of their country.

They have, however, shown signs that they are interested in defining their own standards and remain as economically independent as possible. I doubt they're too keen on seeing billions of dollars a year go to Redmond, WA with no tangible product in return. Just phantom "licenses." I'd be interested in learning just how the Chinese people and the government feel about intellectual property. I get the impression that they don't "get it." Hell, I barely "get it."

-matthew

Re:Combat piracy??

[jb.hl.com]

do you remember they didn't even require you to enter a serial in Windows 95?

Yes, they did. My copy did, at least. Maybe you're thinking of Windows 3.1 :)

Re:Combat piracy??

[suv4x4]

They have, however, shown signs that they are interested in defining their own standards and remain as economically independent as possible.

A ridiculous amount of processors, monitors, laptops, computers, consoles, TV-s, DVD players, CD players and mp3 players that we buy in Australia/Europe/America are produced by Chinese factories (frequently under a western brand).

If China cuts the rest of the world, and the rest of the world cuts China & starts producing their own electronics, China would have a huge revenue source cut off, so that counts as economic dependence in my book moreso than having your own standards for a few multimedia formats.

Yea, they try to save on DVD licenses by making their own DVD for home use. That's like a drop in the river.

Re:Combat piracy??

[misleb]

A ridiculous amount of processors, monitors, laptops, computers, consoles, TV-s, DVD players, CD players and mp3 players that we buy in Australia/Europe/America are produced by Chinese factories (frequently under a western brand).

Right, they are exporting it, not importing. With all that manufacturing power, they could easily just start making slightly different and incompatable equipment for themselves.

If China cuts the rest of the world, and the rest of the world cuts China & starts producing their own electronics, China would have a huge revenue source cut off,

Why would htey have to cut the rest of the world off to make their own electronics?

so that counts as economic dependence in my book moreso than having your own standards for a few multimedia formats.

Perhaps independance was the wrong word. Perhaps "self sufficiency."

Yea, they try to save on DVD licenses by making their own DVD for home use. That's like a drop in the river.

Perhaps, but the point is they seem to be interested in defining their own standards rather than just accepting whatever the West (and Japan) has to offer. Also, keep in mind that software is not like tangible goods. The chinese as a whole may not be too keen on paying another country for licenses which have no inherent value. They're nothing more than legal constructs.

-matthew

Re:Combat piracy??

[Vicissidude]

I seriously doubt that a for-profit business like Microsoft actively encourages the piracy of their products. There was never a replacement for Microsoft's OS products on the Intel platform until Linux matured just a few years ago. Before then, if the average person wanted to use a cheap Intel machine, then they had to use Microsoft's OS. (Some would argue that there's still no choice for the average user.) That is part of the reason why monopoly charges were brought against Microsoft in the first place.

It just doesn't make any sense that they would want Windows and DOS illegally copied when they were the only practical OS for Intel-based machines.

Re:Combat piracy??

[$RANDOMLUSER]

Err, no. The Big Mac index compares currencies. My question was "how many hours do you have to work (similar job) to get a Big Mac.

Re:Combat piracy??

[thunrida]

Funny, I thought you guys (USA people) were fond of free trade and capitalism.

Re:Combat piracy??

[Anonymous Coward]

Let me guess. You're not in one of the countries where Microsoft did indeed have a strategy to increase their userbase through piracy (as the parent poster said he was).

Re:Combat piracy??

[Bob_Robertson]

We really need to start regulating the means by which multi-national corporations do business...

Just another socialist. Socialists always hate how other socialists do things, then try to explain how socialism would work better if only it was this new set of socialists in charge.

The problem being socialism itself. Coercion always causes problems which are used to call for more coercion, ad infinitum. The above is a perfect example. Objecting to a problem caused by government intervention, the socialists calls for yet more government intervention.

Re:Combat piracy??

[danpsmith]

How is democratic control over corporations socialism?

It's just not laissez-faire solve everything libertarianism.

I don't like the government that much, but at least I have some measure of control over their asses. I'm certainly not going to give up all my rights to a swindler in a suit because I think the government is bloated.

Re:Combat piracy??

[Anonymous Coward]

Indeed, copyright and patent monopolies, which give microsoft its power, are fundamentally socialist in nature.

Re:Combat piracy??

[Anonymous Coward]

The article mentions this money will be invested "directly in software and hardware companies in China." NOT consumers.

But what you say about average salary to the price of Microsoft software is true.

Interestingly, a few weeks back I found myself talking to the CIO of Microsoft Australia, who mentioned the main reason in Microsoft's shift to web applications of software like Office is actually to combat consumer privacy in China.

Microsoft knows they can't force the populace to buy there software, so they will earn their money through advertising. Just imagine if Microsoft got even a fraction of China's consumer populace, this is big advertising bucks.
Web advertising is a big business and Microsoft wants more of that pie, especially in a market like China.

He also mentioned that Microsoft will combat privacy by making more of its applications features online exclusive. So that even if you have the pirated version you only get half of the legal equivalent.

All this seems quite logical and if Microsoft does this right with enough incentives I could see a shift. But knowing Microsoft, big flashing banners and simple web only features could just go against them. I guess time will tell.

Re:Combat piracy??

[Yvanhoe]

The big mac index was originally an humorous attempt at creating an index that would work like an international currencies. The main argument being that the price of the burger is constantly readjusted in order that people can buy it at a reasonnable price.

I attempted at being moderated "funny" but if you think about it, it may be a better indicator than the number of hours worked. A chinese and an american may not value the same their hours of work or free time. But a burger is a burger (this quantity of bread, meat, salad) and is closer to a neutral "value unit".

But, well, it is also true that comparisons between American, European, Japanese, Chinese markets require much more complex factors than price or a humorous big mac index. One could also argue that they bought comparatively more expensive DVD readers and that it compensates for the cheaper DVDs, or that those that can buy a DVD reader are the richer 10% of the population and that they could afford a 15$ DVD, etc...

Re:Combat piracy??

[jb.hl.com]

I'm in the UK.

Re:Combat piracy??

[Bob_Robertson]

How is democratic control over corporations socialism?

Main Entry: socialism
  Pronunciation: 'sO-sh&-"li-z&m
  Function: noun
  1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

Just because the politicians are elected doesn't make it any less "socialism". Either I retain the power to dispose of my property as I see fit, and face the consequences for my actions, or I do not truly own my property, my production, my labor, my life.

It's just not laissez-faire.

Exactly. The opposite of "laissez-faire" is "socialism".

I'm certainly not going to give up all my rights to a swindler in a suit because I think the government is bloated.

You've already given up all your rights to a swindler in a suit, the politicians themselves.

Abusive corporations have always depended upon government coercion for their positions to abuse. The myth that big government opposes big business is one of the most successful "Big Lies" in America, likely in the entire world.

If you're interested in how big business and big government work together to fleece you, I can suggest you wander through the articles on http://www.fff.org/ and http://www.mises.org/ , LewRockewll.com, or just for one example notice that Enron had based their entire business model on leveraging government "energy credits". Abusive big business *loves* big government, and abusive big government *loves* the campaign contributions of big business.

Bob-

Re:Combat piracy??

[danpsmith]

MS is doing business with the ultimate socialists right now, and then allowed to come back and pander to us as if somehow it's a good thing for China. Saying that I think corporations that do business with fascists shouldn't be able to conduct business in the US as well is far from socialism, it should be in the basic set of ground rules. Hell, look what we do with Cuba, but oh wait, they don't have massive cheap slave labor and manufacturing to offer.

Re:Combat piracy??

[Anonymous Coward]

The Ludwig Von Mises institute, and aything else like it, are loony bins. their mission? To "undermine statism in all its forms." Great! No army! No civil protection! No state run colleges! No public roads or education! Sounds feasible (see Somalia).

Worse, the institute takes a "critical view of most US government activities, foreign and domestic, throughout American history" -- including, but not limited to, WWII, Abe Lincoln, child labor laws, the women's vote, and the Civil Rights movement.

The Southern Poverty Law Center has identified it as an anti-semetic, racist instutution.

The institute also promotes a type of Darwinian view of society in which elites are seen as naturally superior. The institute seems nostalgic for the days when, "because of selective mating, marriage, and the laws of civil and genetic inheritance, positions of natural authority [were] likely to be passed on within a few noble families."

http://www.splcenter.org/intel/intelreport/article .jsp?pid=106

So, I won't concede a thing to those bastards.

Re:Combat piracy??

[Bob_Robertson]

Anyone who believes what the SPLC has written has failed to examine the site themselves.

It's easy to repeat what others tell you. Looking for yourself is dangerous, you might inadvertently learn something.

Re:Combat piracy??

[Anonymous Coward]

But, if you don't "take a critical view", all you're doing is accepting everything you're told without question.

Is this really what you're trying to say is a _bad_thing?

Re:Combat piracy??

[Bob_Robertson]

"Hell, look what we do with Cuba, but oh wait, they don't have massive cheap slave labor and manufacturing to offer."

Exactly. If abusive big business had a desire to do their abusive big business in Cuba, they would twiddle their sock-puppets in Washington and the blockade against Cuba would be dropped in a week.

The abusive Big Media would figure out how to spin it as a humanitarian effort for the poor Cubans.

The fact is that China is rebuilding their infrastructure, after 60 years of demolishing it themselves, on the dollars made by producing cheap commodity products. The error of "America First" types is that is exactly what Germany did, exactly what Japan did, exactly what Taiwan did, exactly what Korea did, exactly what Vietnam and Thailand and India are doing.

If there is any goodness in the world, Africa will be next. I am very much looking for the day that "Made In Uganda" appears on a label in WalMart.

If you want to demolish the socialist system of China, you need to do what happened in the Soviet Union: have the people lose faith in their own government. The only reason any regime is able to remain in power is that people obey orders. If no one obeys, there is no longer any oppression.

Bob-

Perfect!

[Anonymous Coward]

I must admit, it does seem like China would be the perfect place for that Mom And Pop known as Microsoft to finally get a fair, decent chance at erradicating all that pesky competition.

Linux "salesmen"

[EraserMouseMan]

Linux needs more than activists to spread. It needs a sales force of sorts to make deals with developing nations and businesses. Linux needs business people pushing the solutions and making deals to get the product into mainstream usage.

Re:Linux "salesmen"

[nihaopaul]

linux actually has a strong position in china in terms of servers, i have several servers in datacenters in china and seeing is believing. ok you get the odd noisy winblows server but the rest is all linux, as far as it comes in terms of software most chinese people want to play games on their computer, and if i'm not mistaken they are winblows only games :(

as long as the $government$ doesn't make it illegal to run anything other than winblows then we're ok, as long as i have the choice to run my favourite BSD at the end of the day i've got no complaints, apart from "FUCK YOU SONY IF I WANT MY LAPTOP TO COME WITH WINDOWS I WANT IT IN ENGLISH OR NOTHING AT ALL!"

Re:Linux "salesmen"

[Anonymous Coward]

With linux being "free" there's _NO INCENTIVE_ to do that!

Re:Linux "salesmen"

[misleb]

Linux needs salesmen like a cheetah needs an SUV.

-matthew

Re:Linux "salesmen"

[cyber-vandal]

So what do you think Red Hat, Novell and IBM amongst many others are doing?

Re:Linux "salesmen"

[davidsyes]

Maybe this is a cover story, and the REAL salesmen are coming out later?

OpenBRR Launches Closed Open-Source Group

http://linux.slashdot.org/article.pl?sid=06/04/25/ 2338226

What?

[Whiney Mac Fanboy]

what's not clear is if they expect the reduction to come from local business pressure or more direct government intervention.

Of course its going to be "more direct government intervention" - does the submitter think local businesses are going to pressure someone so they can pay a tax to a large foreign corporation?

Establishing Dominance in the USA

[yls07]

Not sure what the law is like in China, but it would reek of antitrust violations and corruption if a foreign company teamed up with George W. Bush to announce huge cash influxes combined with an articulated goal of "establishing dominance" in that country.

The article says "[t]he aim is to reduce piracy rates and establish Windows as the dominant operating system in the region," but its unclear whether that's the author editorializing or an goal that Microsoft has publicly and openly articulated.

If China doesn't care too much about competition in the political marketplace, maybe they don't care about competition in the actual marketplace as well.

Re:Establishing Dominance in the USA

[joe 155]

You must realise that the Chinese are hard-core capitalists (impressive ones at that). The government wants to make the most money, so when Bill says that he will give $900million in investment then they are very happy, the competition couldn't afford to do that (and they might not want to play ball politically anyway). Besides, if there was competion then it would probably push the price of the stuff down, which neither MS (for the direct money) or the Govt. (for the tax) wants.

Re:Establishing Dominance in the USA

[Anonymous Coward]

No, instead a large US corporation teamed up with George Bush with the goal of "establishing dominance" in another country.

Re:Establishing Dominance in the USA

[pieinthesky]

It does make me laugh when I hear the phrase "communist china". Last time I checked, that meant that everything was state-owned. Seems to me like china is more capitalist than most western nations...

Re:Establishing Dominance in the USA

[Anonymous Coward]

it's also entirely possible that Gates and co are going to find themselves in for a nasty surprise when they find that their $900 million investment buys them exactly ... nothing.

there's no question that they'll be happy to take your money if you offer it, but if there's going to be any operation by billg and gang that would be detrimental to Chinese interests, i have no doubt they'll find a lot of foot-dragging in implementing things.

For one thing, I have NO doubt that Chinese governmental funding and support for linux development will continue without slowdown. their government has no need to worry about backdoors hidden in the code (i'm curious, does MS under their shared-source program give, say, the Chinese government (and therefore the military) a look at the Windows source code? What does that entail for US DoD adoption of Windows? If foreign militaries get to look at the source code of your terminals' OSes anyway, then you may as well use linux?

in any case, though, china is definitely going to be the frontline in terms of widespread adoption and use of linux - the control the corporate interests have in the US is too great already, and i think beyond a certain point linux penetration will stall (i'm thinking DRM requirements). It is not to say that there are no corporate interests in China, but there is a fundamental interest - Windows is not owned by a Chinese company, so it's never going to be on the same standing to them as it would be to the US.

Clash of the Titans

[Billosaur]

Microsoft tried to block Kai-Fu Lee, an executive in its Chinese operations, from joining competitor Google (GOOG) last year. During court proceedings, Lee said Microsoft botched efforts in China by failing to make friends with the Chinese government early on. The software company may be making up for lost time. Some analysts say Microsoft could finally see returns in the next two years.

And so now China is up for grabs. Who will win: "The Evil Empire" or "The Do No Evil Empire?" I wonder if the Chinese government realizes that one of these companies may end up owning their country lock, stock, and barrel? "I'm sorry, Mr. Hu, but Chairman Ballmer won't be able to see you today -- he's trying to annex Mongolia."

Re:Clash of the Titans

[joe 155]

from the meeting

Ballmer: "Mongolia, yeah, you... sign up to our way of doing things or I'll FUCKING KILL YOU, I've done it to countries before and I'll do it again...." *throws chair*

Re:Clash of the Titans

[Mostly a lurker]

If Microsoft presses hard to eliminate software piracy in China, they will end up out of the race. Their products are already looked at with a jaundiced eye in government circles. Meanwhile, Chinese private businesses are very price conscious. Linux is slowly making headway, and could experience an explosion of use. The question is: will the companies offering server based applications be able to overcome the privacy concerns? If so, the economies of such solutions are likely to be irresistible and Google could end up doing very well.

Re:Clash of the Titans

[sgt_doom]

Listen, I don't mean to be hypercritical, but really: for every $1 billion spent, M$ is getting an ROI of $100 million!!!!!!

Now, this is an improvement , given their previous ROI which was probably about $100 million returned for every $10 billion to $30 billion spent.

As far as China being up for grabs, come on, hasn't anyone been reading The Economist during the last several years - China is taking everyone for their money and for a one-way ride.

Steve Jobs' dream - WITHOUT - Steve Jobs' brain......

Re:Clash of the Titans

[ScrewMaster]

With any luck China will do to Microsoft what it did to Motorola (and the rest of American businesses foolish enough to invest in China without know what they were doing.)

Excellent!

[Anonymous Coward]

I am SO looking forward to upgrading from Windows 3.2!

Hard to see how Windows dominance will happen

[jamar0303]

As I have said before, I have seen plenty of street vendors in my area give up selling pirated Windows in favor of Linux. This generally means that uptake of Windows is low (if even $.50 is too much to pay for a copy, then how are you going to get Windows dominance in the market?)and people are getting into Linux. Again, I cannot represent all of China (or heck, even all of Shanghai) but at least a small part of China is starting to see the light of open-source (or turning away for the darkness that is Windows).

Re:Hard to see how Windows dominance will happen

[quandmeme]

China is maturing. China joined the WTO in 2001 which required adoption of TRIPS' minimum standards of intellectual property protections. At the end of January 2006, the IP legal news sources carried two stories where the Chinese courts enforced a foreign trademark (Starbucks) and foreign copyrights (Chanel and others). The news wasn't the dollar awards but the injunction which is much more useful. Yes the pace is very slow, the judicial culture really didn't realize it had the independence to enforce the new laws in favor of foreign capitalists, but the Chinese government certainly is NOT naïve and sees a day when China will have IP it wants to enforce in other countries. The first steps are being taken now. So yes, it is good for Microsoft to make steps too.

That said, I heartily agree with the comparison Linux to market place freedom that is absent from Chinese political culture. I would love for someone to successfully pitch Linux to a government official as an alternative to Microsoft's OS hegemony. I hope that Linux culture would be a powerful transforming force in China.

Why Is This In Politics??

[Anonymous Coward]

So what if Microsoft is investing in China? It's not a political issue in the slightest.

In case some of you haven't been paying attention, just about every company has been trying to invest and break into China's economy. It's not really new or exciting. Does anybody remember the kerfuffle with Yahoo or Google?

Makes sense...

[timmy_otoole]

I plan to retire on the investment return from the Elvis collector plates I purchased 12 years ago.

Up pops Clippy the hand Office Assistant!

[gowen]

"It looks like you're selling out your last few moral principles, in order to make a shitload of money from an oppressive totalitarian regime.
  Would you like some assistance?"

Re:Up pops Clippy the hand Office Assistant!

[Anonymous Coward]

Both Microsoft and the Chinese Government (here "TheParty") share an inclination towards fascistic control and monopolisation of information availability, even "ownership" of information (see Microsoft's intellectual "property" propaganda). They're made for eachother. There is no change in microsoft's moral principles involved, since Microsoft's evil moral principles (they have moral principles, just ones diametrically opposed to what us Free people consider moral) were already aligned with TheParty's.

TheParty+Microsoft is a much more sensible (and *much* more scarily evil) match than TheParty+"Red Flag Linux". TheParty and Microsoft are the same underneath, one with a thin veneer of communist terminology painted over, one with a thin veneer of capitalist terminology painted over.

Re:Up pops Clippy the hand Office Assistant!

[cyber-vandal]

Moral principles? Microsoft? Since when? But pedantry aside thank you for making me laugh :)

In other news

[192939495969798999]

"Three hours after Microsoft invests $900 million in China, approximately $900 million in pirated goods appears on the streets of China." Haven't they figured out how things work over there? No one cares. Stopping piracy in China is holding back the ocean with a broom.

In other news

[Anonymous Coward]

In an effort to ease the oppression of the poor chinese citizens, AOL will be giving away, that's right - giving away, 1000 free hours to the 6 billion ppl.

Money talks

[RingDev]

From the article on NEC being pirated: http://www.iht.com/articles/2006/04/27/business/ne c.php

"After a visit to the Microsoft headquarters in Seattle on April 18, Hu said the protection of intellectual property was crucial for China's future."

A quick visit to old Billy-boy, a squak about IP protection, and a $900m deal? Interesting.

-Rick

Now it all ties together

[Nanpa]

After getting back into CNC Generals, and reading this post and the $150 laptop computer post it all comes together when you realise that it only costs $600 to hire an asian man with a laptop to 'hack the internet' for $5 a second...

A free market unmatched in the US.

[Anonymous Coward]

Actually, what we're witnessing is the free market in action. The fact of the matter is that consumer-grade software just isn't worth much. That's why it's sold for pennies, literally, on the streets of China. The market has decided that the price Microsoft or others charge for their software is far too high. Thus we have what is labelled as 'piracy', when it's nothing more than the market naturally handling a price aberration.

Well...

[Anonymous Coward]

M$ has to replace many broken chairs, and since China is one of the largest producers of furniture....

You mean like IBM, HP, Novell and Oracle?

[Anonymous Coward]

Gee, that would be great, wouldn't it...

MSFT down 10% overnight

[greg_barton]

Microsoft's share price was down 10% in after hours trading last night.

What's up with that?

Re:MSFT down 10% overnight

[omega9]

They announced earnings for the quarter and missed expectations.

Re:MSFT down 10% overnight

[Anonymous Coward]

yep very weird the US stock market, they announce record profits and growth and they still go down in value.

Re:MSFT down 10% overnight

[j79zlr]

Plus there are delays in new products that missed expections.

Re:MSFT down 10% overnight

[canuck57]

Microsoft's share price was down 10% in after hours trading last night.

What's up with that?

Their earnings are below street estimates. Market saturation and competators are begining to take hold. And China, I really doubt they would ever consider paying what we pay for M$ software.

And there is the NSKey thing, and with CA certs inside MS could SSL in the middle to get "secrets" and this is why the Chinese government should have some big concerns. I hope people are not naive enough to think the NSA allows the export of SSL they cannot eves drop on.

No mater what the case, MS will not be able to roll over the Chinese with FUD as they did with US I/T to dominate the market. Different place, different time and most Chinese I/T don't own MS shares.

China 2000 = America 1800

[GalacticCmdr]

Just like the Europeans who squawked about the thieving Americans in the 1800s - so to do the American squawk about the Chinese. The Chinese will not come around until they actually have something worth protecting.

It is amazing that when you have your own oar in the water how quickly you become a player.

Personally I think that we are still 2-3 generations away from China being viewed as an adult at the big table. However, barring any really radical changes it is coming.

Re:China 2000 = America 1800

[mrchaotica]

I disagree. America took several generations to become prominent because of the slower pace of the 19th Century (due to the lack of communications and transportation technology). With the tech we have now, China can progress much faster.

For example, take the auto industry: the Japanese became big players in the US auto market about 20 years after entering it. The Koreans came a little later and did it in 10. There's speculation that, once the Chinese start selling cars here in the next year or so, that they'll be able to become as big as Toyota or Hyundai in only 5.

Linux a better business model

[peter303]

In China, businesses that try to make money off of closed software with fail due to rampant piracy. Since Linux is free anyways, services based on Linux is a better model.

Hows $500 billion in foreign investment?

[RingDev]

Where do you think the money for our national debt comes from? China has over $260bil in US Treasury bonds. Japan has even more. And a LOT of this deficite spending activity has been on Bush's plate. When Clinton left office the debt was $5.6tril, and grew $20bil hist last year (compared to $400bil his first year). Right now the debt is estimated at $8.3tril. Almost 3 trillion dollars spent in 5 years... crazy.

-Rick

Re:Hows $500 billion in foreign investment?

[norite]

So it seems that the USA is at the mercy of China...What would happen if China suddenly called that debt in (for investment elsewhere, for example)

Those clever Chinese

[pubjames]

Of course the Chinese are going to welcome foreign investment. But they are not naive - they will welcome Microsoft's cash and make all the right noises, and at the same time they will make sure that we carry on buying more and more of their stuff, whilst they buy fairly little of ours. This rush for western companies to establish in China has been going on for many years now, but few have achieved it. I think perhaps we are the ones being naive...

Microsoft To Invest Heavily In Fine China

[digitaldc]

How can Microsoft invest heavily in china when everyone knows they are better at making windows?

I'm so upset I could smash something!

Re:BSD is dead

[IvanTheViking]

Could someone explain to me why people keep saying BSD is dead? I know it's offtopic, no need to mod me that.

Microchina?

[Khammurabi]

As part of Chinese President Hu Jintao's recent visit to Redmond, Microsoft is announcing plans to invest $900 million dollars directly in software and hardware companies in China.

Did anyone else read this and think to themselves, "$900 million is just about what it would take to move Redmond to redland?"

1. Hire Chinese developers, check.
2. Fire American developers, check.
3. Save massively on overhead, check.
4. Profit!

The whole "China will now start to crack down on Chinese piracy" thing seems kind of a given if Microsoft becomes a Chinese company. (It also would give Microsoft the ability to bottom out the price of Windows if Linux ever becomes a larger threat.)

Re:Microchina?

[sgt_doom]

The new MSN slogan: What dissident do you want arrested today?

more than piracy

[big dumb dog]

Microsoft's investment in China and courting of the Chinese president is about more than opening up a new market or trying to stop piracy.

I believe the real issue for Microsoft is risk management. The Chinese have a huge consumer market that is just starting to transition into computers (in some areas). If these people cut their teeth on MS products like Windows, Microsoft has a better chance of retaining their place in the market.

I'm sure that Microsoft knows from several years of making inferior products that it takes quite a bit to get people to make a change in their computing environment.

On the other hand if the mass Chinese market starts off with something like Linux, substantial momentum could develop to erode their market share else ware.

Re:more than piracy

[sgt_doom]

Consider this risk management!!!!!!

A Great place to vacation!

[RingDev]

Yeah, but for $30 you can get a 5 star suit. For $4 you can have a steak and lobster dinner. For $80 take a private charter boat out for a tour.

-Rick

Sell Out Themselves.

[Beefslaya]

I believe with the current laws in China, you have to sell your business to the "People" before you can sell your products.

I wonder how that will work for them?

Microsoft Logic

[SB_SamuraiSam]

I like how, after reporting only making $100mil where they should be making $1bil, they announce they will invest $900mil to try and fix it.

Re:Microsoft Logic

[jasonhamilton]

1 billion *annually*

Decisions decisions...

[kibbled_bits]

Lets see eat or comply with Microsoft's EULA... decisions, decisions...

A threat to our national security

[Anonymous Coward]

I was going to say this is a threat to our national security, considering the combined impact of

• Skilled jobs leaving the country, dumbing down our workforce,
• Technology going to China
• Significant funds going to a comunist dictatorship

But then I realized it's Microsoft doing this so it's more likely that this is simply our CIA funding Microsoft to plant backdoors in China, kinda like we did to the old soviet union

Hi! I'm Troy McClure.

[skoaldipper]

You may remember me from such linux films as "Today we paper clip hole. Tomorrow we mount." and "Mommy, does kernel panic mean my computer went to heaven?"

Don't kid yourself Billy. If Linus ever got the chance he'd eat you and everyone you care about.

Re:BSD is dead

[Anonymous Coward]

Good concise guide to /. trolling:
http://en.wikipedia.org/wiki/Slashdot_trolling_phe nomena

Specifics on the "BSD is dead" troll:
http://en.wikipedia.org/wiki/Slashdot_trolling_phe nomena#Netcraft_confirms_it

Enjoy.

Reimbursement

[Anonymous Coward]

After a copyright infringer has been executed, the Chinese government sends a bill to his family for the cost of the bullets. Part of this new agreement is that in a symbolic gesture showing the government's strong support for intellectual property rights, the funds from the bullet fee will now be forwarded to Microsoft to help offset their losses.

Selling ideas to the Chinese

[Peter Trepan]

Salesman: Vista is much more advanced than Windows XP. It interfaces with hardware right on the motherboard that keeps you from copying things you're not supposed to copy, and...

Chinese Businessman: What the price?

Salesman: We're pricing it aggressively, with the bare bones version just under one hundred U.S. dollars.

Chinese Businessman: One hundred dollars! What else it do?

Salesman: It's like Windows XP, but it has Digital Rights Management, and look - the windows can be transparent.

Chinese Businessman: Give me a brochure that say exactly what it do, and I think about it.

Salesman: Okay, great! Here are the technical specs, and here's a pamphlet that shows you why you need the new Windows Vista.

Chinese Businessman: Okay, goodbye!

******* One Month Later *******

Chinese Businessman: Happy Panda Software is pleased to announce that "Mindows Fiesta" is now available. Home version only seventy-five cents!

Re:BSD is dead

[metamatic]

Wikipedia will tell you all about the "BSD is dead" troll.

And so as to be on-topic:

Of course Microsoft are investing heavily in China. They're going where the evil is.

Evil tag?

[caudron]

Seriously? This article has been tagged "Evil"?

OK, is it because it's Microsoft? I have a deep loathing of all things MS just like any other self respecting slashdotter, but evil is a bit strong.

Or is it becuase of the mention of China? If so, then that's a bit hypocritical. Should I start talking about all the messed up stuff our own government has done? China may be worse---I'm not denying that---but to call them evil and completely ignore all we've done over here that is nearly as bad is either seriously short sighted or betrays a real lack of perspective.

Spend less time judging the others and worry about fixing things in your own home.

And that advice goes for we Americans just as well as it goes for we Linux folk.

Tom Caudron
http://tom.digitalelite.com/

Disclaimer: I am an American, but I have no small connection to China.

Re:Evil tag?

[thomasa]

1/2 evil + 1/2 evil = 1 evil

All in all, I'd say that Microsoft is a lesser evil then the Current
Chinese government (after all Microsoft is not committing genocide in
Tibet, although it does not like competition like the Chinese Communist
party does not like competition) but perhaps adding them together yields
on full evil.

Maybe Hu gets a piece of the pie

[terminalhype]

Considering that China likes to control things (like access to the www), maybe Hu was more interested in exploring the uses of DRM to keep tabs on all those millions of Chinese people getting new computers over the next decade. Vista could fit the bill (so to speak). Plus, if China's government becomes an official member of the BSA ( tho they might insist on calling it the PRoCBSA in China), they'd would be happy to receive their share of the profits from taking businesses to task after doing an "audit" to see if their software is pirated. When it comes to controlling what can and cannot be allowed on the public's computers, Windows Vista w/DRM could be the best tool for the job. Maybe Linux will someday only be the software of Rebels and dissidents. Banned, and prosecuted whenever Linux usage is found. China's government is about control, Windows Vista w/DRM is about control. It's a match made in Hell.

Makes sense

[HangingChad]

MSFT has alienated as many customers on this side of the pond as they can, now they have to move into emerging markets to find customers who don't already hate them.

mutually exclusive

[iminplaya]

To reduce software piracy and establish Windows-dominance...Unless they sell it for a dollar or less, they won't get both. Either there will be "piracy" or there will be Linux.

"...either his brains, or his signature, would be on the contract."

Lagrande, TCG. China's Problem: Linux == freedom

[Anonymous Coward]

It's easy to see how Microsoft will make money at this. First, by forcing the install of their operating system AT THE FACTORY, it becomes essentially pointless to "pirate" Microsoft's operating system... you already paid for it!

Microsoft can keep the gravy train coming by ensuring that "Trusted Computing" components get inserted into computers over the next several years. In particular, Intel's "LaGrande" technology is going to be built into every computer chip... you won't get a choice in the matter. Without owner overrides (and nobody's including them), computer users no longer control their computers.. external systems will decide what you may or may not do with the computers. In short, they're working towards control over every computer. Once most Chinese are hooked on Windows, and they've "upgraded" their hardware, they'll suddenly discover that their data is inaccessible unless they keep paying for the upgrades. Naturally, documents will be encrypted by keys that only Microsoft applications can access, so you won't be able to use a competing program like OpenOffice.org.

Why would the Chinese government be foolish enough to do this? I suspect the Chinese government is MOST concerned about PREVENTING computer users from discussing political freedom, and even more importantly, preventing democracy from occurring in China. See articles about the "Great Wall of China" and so on. Doing that requires control over every citizen. Having control over every computer makes that possible. They could even force all Internet packets to be authenticated by keys accessible only to the government, so computers not approved by the Chinese government will not be able to connect to other computers. China can ensure that every keystroke is logged and sent to their version of the Thought Police, and ensure that you can't practically use your computer unless that occurs.

Don't expect this to happen tomorrow. They need to make sure the obedience collars, er, trusted computing chips are all in place. But after 5-10 years, most of the computer hardware will have been upgraded, and the plan can begin.

Linux doesn't fit well into a place where freedom is illegal. The whole point of open source software is that you're free to make changes and improvements to the system. But the ability to control your computer frees you from control by others. For example, it would allow you to find and disable censorware.

Of course, this leaves China at the mercy of Microsoft. Or does it? China has Windows' source code, and they will require the sources as it gets changed. If Microsoft dares to disobey its master, China will simply declare Microsoft to be an enemy of the state and take over Windows distribution in China. Problem solved.

Microsoft gets piles of money and becomes a monopoly in China. The Chinese government gets complete control over its citizen/serfs, including ensuring that all information received or sent by its citizens is approved by the state. Any attempt by a Chinese person to escape from oppressive control will be imprisoned or killed immediately. Who could complain about that?

I hope this is not true. But it explains everything.

Grain of salt for 'investment' announcements

[ivaldes3]

Take news of big 'investments' by companies like IBM, Microsoft etc with a grain of salt. They use funny money accounting to come up with these numbers. Lets say for example a $100,000 'investment' from a company like IBM. What might this mean in real terms? A $89,000 list price per CPU license for the rights to use their Domino server software and $10,000 / $250/hr staff time = 40 hours of staff time to set it up and do some minimal programming.

What would the same 'investment' mean on the street and nearly everyone else?
Exactly zero dollars for the software and much less than $250/hr for staff time and much less staff time. When companies throw Billion dollar investment announcements around in splashy PR announcements, they bear investigating what that really means.

-- IV

Hey China, remember 'the first HIT is free'

[Locutus]

Because this "investment" by Microsoft is nothing more than a way for them to get the Chinese people hooked on Microsofts software. And the detoxification process HURTS more, the longer you stay 'hooked'.

You've been warned.

IIRC, the addiction reference - MSFT is one of many great McNealy-ism's.

LoB

Harvest

[cyfer2000]

Lenova recently payed M$ about 1.2 billion US dollars, and counting in other smaller manufacturers, M$ may have collect as much as 2 billion US dollars in the last 4 months. Do you call this HARVEST after 10 years of "encouraging piracy". I think so. There was a famous rumor about piracy and M$ in China several years ago, when a journalist asked a top M$ executive about piracy, the rich guy said "as long as they are pirating our software, it doesn't matter".

Re:Harvest

[rtb61]

Microsoft have to talk up the piracy angle, the alternative is "microsoft is reducing investment in US software development by $900 million dollars", it is pretty tricky trying to sell software to people your help to put out of work.

Investing in software for sale with in china is pointless, the typical chinese consumer is payed so little they simply can not afford to buy the software or the new microsoft hardware that they will be producing.

US windrones will simply have to adapt to the concept of migrating to china or india if they want a future in microsoft software, either that or switch to and promote alternate software products that are orientated to local coding, support and services. Open source software is always local no matter where in the world you are.

next up: microsoft buys china

[Anonymous Coward]

clearly, the most natural form of government for a monopoly would be communist.

linux has a long way to go, red hats just won't cut it any more.

China is Evil

[Anonymous Coward]

USA slashdotters should ban this kind of posts. Or we lose total Terrorists war.

P.S. I'm permanent IRAQ/IRAN visitoer. Soerry foer by mad english.

Linux in china

[JustNiz]

>> ...The company should be booking about $1 billion on annual sales of some 20 million PCs in China

Why? Perhaps they all heard about Linux.

Would the US government then take notice?

[Anonymous Coward]

If Microsoft become no longer an American company, would the US antitrust department start taking greater interest? Would the law suddenly be applied once an American monopoly in software becomes a foreign one?

News Item Could Read...

[lorelorn]

"Capitalist sells rope with which to hang him. Pleased at price received.

'It's a seller's market right now. We'd be fools not to join in' the capitalist was quoted as saying."