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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."
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.
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).
OSx86 FTW
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
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
I'm not saying that the piracy is OK, but that the amount paid isn't so cheap as it sounds to us.
No folly is more costly than the folly of intolerant idealism. - Winston Churchill
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.
Programming: Its not just a job - its an indenture.
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.
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.)
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
"THERE IS NO JUSTICE, THERE IS ONLY ME." -Death
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......
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-
The Ludwig von Mises Institute. The reasoning individuals economics