Microsoft China Suffers Major Setbacks
Two directives, one from China's State Council and one
from the Shanghai City Government Educational Dept., have
dealt major setbacks to licensing of Microsoft products.
The procurement center of the State Council, which is
in charge of all purchases made by Chinese government
ministries, has said that the government will only authorize
purchases of hardware installed with domestic operating
operating systems and applications. The government move
appears to be made to encourage installation of WPS Office
2003, a domestically made productivity suite. Any purchase
of Microsoft Office by government ministries will require
special authorization.
The new policy will continue until at least 2010, and
will boost installations of locally developed operating
systems and applications on computers from the current
one-third to 100 percent.
It appears that a major aim of the policy is to help
China's local software industry, which has had trouble
surviving the challenge of global corporations. The Chinese
government has been actively promoting Red Flag Linux,
an open-source OS, as an operating system alternative
to Windows.
In Shanghai, Microsoft China, in a letter, accused the
Education Department of allowing its schools to use pirated
copies of Office on their computers. The Shanghai Education
Department replied that it had signed a RMB$10 million
agreement at the end of 2002, granting it unlimited licenses
to install Office.
However, Microsoft insisted that the Office installations
were unlawful. As a result, the Education Department ordered
that Office be uninstalled from all computers, and WPS
2003 installed by the time Shanghai's schools open for
the new academic year in September. It is not known how
many computers are affected by the order, but it is believed
to be significant.
Microsoft has made a number of moves to improve its image
in China. It has just created a new position, that of
Microsoft Greater China CEO, and it has allowed the Chinese
government to view Windows source code under the "Shared
Source" initiative.
However, the China relationship continues to be prickly,
especially when Microsoft's legal department gets involved.
Unfortunately for Microsoft, the legal department doesn't
seem to understand the difference between the US and Chinese
legal environment, and wants to force the US model on
China, which has never worked.
For the Chinese government and people, this is taken
as a direct assault on their sovereignty, and causes a
backlash against the whole company's reputation, creating
a public relations disaster.
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