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

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.

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.

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...

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: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.

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