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The Almighty Buck

The Empire Strikes Back - in China 316

Posted by timothy from the oh-no-agreements-at-all dept.
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."
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The Empire Strikes Back - in China More

The Empire Strikes Back - in China

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  • Birds of a feather (Score:4, Funny)

    by Anonymous Coward on Thursday June 27, 2002 @04:06PM (#3781981)
    Some would say considering China's human rights record.... that M$ and China would make a good team.
    • Absolutely. Its all so clear to me now, just when I thought M$ couldn't be totally bent on World Domination, along comes this story. I think when you look at the bigger picture, M$ in the socio-political landscape is starting to behave and act like a country into itself. And now with its introduction of Palladium, and the secret meetings between top staff at Microsoft and the leaders withing the US Intelligence Community, its becoming clear just how powerful and ambitious M$ really is. I don't think there is any precedent like it in history. I'mleft feeling "WOW", except not in a good way at all.

      • I don't think there is any precedent like it in history.

        Churches. Almost all of them that survived by now.

      • Absolutely. Its all so clear to me now, just when I thought M$ couldn't be totally bent on World Domination, along comes this story. I think when you look at the bigger picture, M$ in the socio-political landscape is starting to behave and act like a country into itself.

        US corporations have been pushing nation states around for quite a while. The difference is that usually they pick on the small and weak (China isn't either) and they call on US militry forces for help.

        And now with its introduction of Palladium, and the secret meetings between top staff at Microsoft and the leaders withing the US Intelligence Community, its becoming clear just how powerful and ambitious M$ really is.

        Does "Intelligence Community" include the CIA, who are quite adept at fighting covert wars...

        I don't think there is any precedent like it in history

        The Catholic church in the middle ages comes to mind as an organisation capable of subverting civil government.
    • Microsoft, the People's Choice when there's only one option.

      Efficiency, privacy and security proven in Communist China.

      Marks, Mao, Gates, heros of the revolution.

      Useful where free press is forbiden.

      Making our enimies less productive every day.

      Perfered by colective oligarchies 10 to 1.

      You don't want to know what happens when you violate the EULA.

      BSA, PRC, we taught them everything they know.

      People who can only have one child won't mind the copy protection at all.

  • Microsofts point of view... (Score:5, Interesting)

    by Rasta Prefect ( 250915 ) on Thursday June 27, 2002 @04:07PM (#3781990)

    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.

    • Re:Microsofts point of view... (Score:5, Insightful)

      by dubiousmike ( 558126 ) on Thursday June 27, 2002 @04:23PM (#3782112) Homepage Journal
      Having worked for a few commercial software companies, one being a music software company that was one of the more pirated at the time, I found that the company's standpoint on piracy was that it was not all that bad, in most cases.

      Those who will use your software in a professional capacity will usually pay for it.

      Those who will not use it in a professional capacity, will learn it and possible work for an employer who either already owns it or will likely buy it for said "now former non-professional" to use it.

      At the end of the day, you have an increased user base. Revenue doesn't really change as the non-professionals wouldn't have paid for it anyway.

      Of course, I didn't work for Microsoft or a similar company who's products are meant for absolutely everyone (in their book) and thus every pirated copy really is considered lost revenue.

      • Re:Microsofts point of view... (Score:4, Insightful)

        by _Upsilon_ ( 97438 ) on Thursday June 27, 2002 @05:00PM (#3782360) Homepage
        Those who will use your software in a professional capacity will usually pay for it. Those who will not use it in a professional capacity, will learn it and possible work for an employer who either already owns it or will likely buy it for said "now former non-professional" to use it. At the end of the day, you have an increased user base. Revenue doesn't really change as the non-professionals wouldn't have paid for it anyway.
        This is essentially the point of view which I've looked upon all this for years.

        I believe that there should be a 'personal use' license for most of the big software packages out there. They could make it downloadable (even if it did require registartion) or put it in the stores without hard-copy manuals, or a box. Sell them in a shrinkwrapped jewel case and price it like an audio CD.

        The pros would still pay for it, and it would do wonders for increasing the user base.

        I believe, IMHO, that people would be more than willing to pay for good software if the prices were not as absurd as they are now (for big packages anyways, think MS Office, or Adobe PhotoShop)

        Geoff Holden

      • I'll bet it's just Microsoft "funny money", the same stuff they use to make settlement offers to the states.

        Sure, they'll donate $750M worth of their products into a market that mostly pirates the stuff anyway. The actual cost to Microsoft should be maybe 1% of $750M. The bottom line is that widespread piracy of M$ products isn't enough to stop Linux. All those years of whining about piracy and now the problem is that pirates aren't working fast enough!
      • "...and thus every pirated copy really is considered lost revenue"

        Yeah it's lost revenue, right. But here's the exact lost revenue we are talking about: lost revenue for a competitor. Why? Because who would voluntarily pay for a price-performance compromise solution when you can get away with the no-compromise thing for FREE. That's how a pirate thinks and we have at least once been pirates. For that to work you need some people to pay. Who then? Companies or no-choice OEM bundles. And that's where most MS revenues come from.

        Pretty easy, let people pirate and the established monopoly wins all battles (when they want to fight them, like Browser war, Office war and now may the "war against cyberterror" (Palladium)).

    • The problem with this is that it is a stop gap measure at best. Microsoft can't afford to pay everyone to use their software.

    • Very likely (Score:4, Insightful)

      by einhverfr ( 238914 ) <chris.traversNO@SPAMgmail.com> on Thursday June 27, 2002 @04:38PM (#3782208) Homepage Journal
      Agreed with your points, but there are a few more things to consider:

      Microsoft really is lagging in the Chinese market (200:1 copies of licensed Linux to Windows according to some estimates). This is because the only competition to pirated Windows at the moment comes from Linux.

      Also, Gates at one point make a comment to Money magiazine (in 1998) where he stated that they need to get the Chinese addicted to software, so they will start paying for it. This has seriously hurt Microsoft's image in China (can you say Opium War?)

      Finally, the major anti-piracy cases Microsoft has tried to bring in China have been ill-timed and seriously backfired.

      So Microsoft is coming in from behind in the fight against Linux in China, and it is trying to make up for past blunders...
    • Well, if you missuse your car, you license to use it is revoked. If you pirated MS stuff in the past, you should be prohibited to use it in the future. Wouldn't it be nice? MS would have like 10% market share by now...

      Now, getting serious, this is what microsoft has always done to promote their monopoly. If you can pirate microsoft stuff why would you want to use anything else? So small competitors have a hard time.

      If only the antitrust could see that piracy is Microsoft #1 allie, they'd see how to end the monopoly: a _flat_ price for EVERYONE. And _strong_ antipiracy from "day 1".

      It's so cheap that it works. They let you get away on porpuse for some time and then, when everyone uses it, they claim "oh, look how much harm piracy is doing us, all this lost revenue!". Well, if you wouldn't have let them pirate your stuff in the first place, then COMPETITION could have taken place, and low cost alternativs would have appeared.

      God, it's so simple. I guess MS and the goverment must have some kind of secret deal. But the rest of the world is beggining to suspect so they are in trouble.

    • Neat... (Score:4, Funny)

      by Danse ( 1026 ) on Thursday June 27, 2002 @04:56PM (#3782328)

      Now I see that I have been right all along!! I'm not really pirating MS software, I'm helping MS to maintain their dominant user-base! What's good for me is good for Microsoft!!



      • Re:Neat... (Score:3, Insightful)

        by ignavus ( 213578 )

        Now I see that I have been right all along!! I'm not really pirating MS software, I'm helping MS to maintain their dominant user-base!

        Yes, you are. You are an accomplice to a corporation with the morals of a drug pusher.

        Get legal. Use open source.

        MS: Free, as in "the first one is on me"

        MS: Unfree, as in "We'll charge you when you're hooked"

        Only suckers play MS's game. If you are already dependent, *plan* to get off their software. For all new projects, use open source equivalents. For old projects, gradually port them to the open source equivalents. You *can* do something about it. Start now.

      • Re:Neat... (Score:2, Funny)

        by labratuk ( 204918 )
        ...What's good for me is good for Microsoft!!

        Wait a second: you're saying using Microsoft software is good for you?
    • Microsoft has to be realizing that it's better to let rampant piracy of their products continue

      I'm amused by what must be the Chinese mentality: Share and redistribute Western OS software legally through the GPL, or illegally through piracy? Whatever, the government won't do anything anyways.

      I mean, what's the point of MS giving them oodles of free software, when they'd copy it for free anyways? It's not like there's even a guilty conscience in their culture about it.
      • I would have thought letting the piracy go unchecked would have been cheaper. Microsoft wouldn't have to worry about the support side of things, and they don't have to pay for the distribution!

    • I think Microsoft's view is probably more forward-looking than this.

      I suspect that MS believes that by investing in China, they can build up China's domestic software industry. That domestic industry will find that their business will be much more profitable if their intellectual property rights could be protected.

      Western companies complaining about piracy probably doesn't mean squat to the Chinese government. They figure that piracy of western software helps keep China's foreign reserves higher, while still allowing the domestic economy to benefit from the software. When Chinese software starts getting pirated, the Chinese businessmen are going to start working their connections to get the government to crack down. Plus, the pirate shops will start getting legitimate contracts to produce domestic software.

      I'll bet that the Chinese government will sit up and take notice when it's not just foreigners asking for copyright enforcement. And that, eventually, will redound to Microsoft's benefit.

      Or, maybe Bill Gates figures he's got 40 billion dollars to piss away just because he feels like it. NOT.

  • hey Ballmer (Score:5, Funny)

    by Patrick13 ( 223909 ) on Thursday June 27, 2002 @04:08PM (#3781994) Homepage Journal
    Hey Steve-O--

    my friends and I pirate MS software too, give us $750,000,000 too. What's good for us is good for the net economy...

  • Good news/bad news (Score:5, Funny)

    by Dark Paladin ( 116525 ) <jhummel&johnhummel,net> on Thursday June 27, 2002 @04:08PM (#3782004) Homepage
    The Good News:

    China gets an even bigger IT infrastructure.

    The Bad News:

    They spend most of it on hardware upgrades. Forever.

    The Good News:

    More technical knowledge of computers in the country.

    The Bad News:

    It's all directed at creating anti-Pallendrome mod chips.

    The Good News:

    More people in China get onto the Internet!

    The Bad News:

    All they can get is MSN, and only if they use Internet Explorer.

    The Good News:

    China gets to upgrade their military computers.

    The Bad News:

    The first BSOD launches WWIII.

  • They will strike 'piracy' later.. (Score:5, Interesting)

    by aralin ( 107264 ) on Thursday June 27, 2002 @04:08PM (#3782005)
    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.
    • What I have to wonder is whether or not people in the U.S. and in Europe notice that they're getting significantly worse treatment than China from Microsoft and decide to do something about it.

      Of course, probably nothing would come from that anyway, what with "intellectual property" being so screwed up in the west ("What's ours is ours, and what's yours is ours. Now bend over!", say the corporations, with the court system seemingly going along with this).

  • How long can they keep it up? (Score:3, Interesting)

    by sterno ( 16320 ) on Thursday June 27, 2002 @04:09PM (#3782007) Homepage
    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.

    • Re:How long can they keep it up? (Score:5, Interesting)

      by Sabalon ( 1684 ) on Thursday June 27, 2002 @04:13PM (#3782048)
      Depends on how they are "spending" it. Are they giving away licenses to Windows? If so, what is the cost to them - $0.

      Lets see them really donate $750mil by going to CompuUSA or something, buying $750mil copies of WinXP and shipping it over there.

      Hell...I can give you $4BILLION worth of RedHat...buy one cd for $69 amount and print up a certificate saying you can copy/install it 5.7million times.

      It's like the case a bit ago where they were gonna help everyone out by giving them their software which'll cost them minimal cd costs.

      • Re:How long can they keep it up? (Score:4, Funny)

        by _ph1ux_ ( 216706 ) on Thursday June 27, 2002 @04:27PM (#3782142)
        good point. I wonder if that means that they get to write off 750mil...

        Kramer: Jerry, just write it off.

        Jerry: what? what do you mean write it off?

        Kramer: big companies do it all the time.

        Jerry: you dont even know what a write is, do you?

        Kramer: ....
        • If you are donating something to a charity, you only get to write off the actual cost to you, not the retail cost. Of course, this isn't even a charity, it's China, so it doesn't matter.

          And they get to write off the actual cost anyway -- any business expenses are deducted from gross revenue. Not that it matters anyway, MS hardly pays any taxes.

          • "MS hardly pays any taxes"

            Well - maybe in terms of percentage points - but if you look at the actual dollar amount - I think you will find that it is quite a large sum.

            The point I was making is that if they can write off the "cost to them" they can claim some arbitrary amount as the cost to microsoft is negligable.

        • Heh, that Seinfield skit reminds me of AOL's little $54 billion write off [forbes.com].

          Best I can tell that's how it works; AOL stock went up after they announced it (the biggest writeoff in history).

      • Actually, Microsoft doesn't have the nasty habit of charging for bandwidth on updates and charging money for support. Or asking for donations all the time. $4billion in RedHat means jack, $4 billion in windows licenses means you get free updates for years, and plenty of online support. None of that preferred treatment for $$$ crap.
        • Actually, Microsoft doesn't have the nasty habit of charging for bandwidth on updates and charging money for support.

          Microsoft charge for support on a per incident basis. They try and push over a lot of support costs onto OEM's too. Microsoft have even been known to charge when they can't fix a problem or for supplying a bug fix they chose not to put up on the windowsupdate site.
          If you look through the MS Knowlage Base you will find quite a few cases where there is a fix but you have to phone Microsoft to get it.


    • Many people seem to be noting that $750 million is a drop in the bucket for Microsoft, but I would tend to disagree. Last I read, Microsoft had $40 billion in liquid assets, with liquidity equal to or less than 1 year. And $750 million is .75 billion, almost 1 billion. Looking at these numbers, that is 1/40th of Microsoft's total liquid assets. Sure, it is over three years, but let us assume that in each additional year, Microsoft has another $40 billion in liquid assets available (although it could quite possible be less than that). Overall, that is still 1/120th of Microsoft's total liquid assets in the particular time period... almost 1%. That is quite a decent amount to be spending to supposedly 'help build' China's market for the good of it.

  • ...wait a second - you said Microsoft?

    I'd like to see the hat that Bill Gates should be eating right now.

  • I'm not usually a big anti microsoft guy, but from my point of view (IE zero experience in marketing) this seems like a stupid decision. Microsoft has been spending ac rap load of money in this country to combat piracy. American piracy is nothing compared to Chinese piracy. its like comparing communism and capitalism... Oh wait it IS comparing capitalism and communism.

    Yes yes i know that china has had an open door policy for a while now as far as foreign markets go and yes there are thousand of american companies making money there. The point i'm really trying to get across is that the market in china would be much different than it is here. Computers are not very prominent in most people's lives there. The biggest market i can see this in is the business market there.

  • dosent matter (Score:3, Funny)

    by Ksop ( 132400 ) on Thursday June 27, 2002 @04:11PM (#3782026) Homepage
    linux open relay
    or
    windows open relay

    were all still going to get spam from china

    • Re:dosent matter (Score:5, Funny)

      by Lao-Tzu ( 12740 ) on Thursday June 27, 2002 @04:23PM (#3782117) Homepage

      It does so matter.

      A windows open relay will have more downtime. Yippee!

  • How lovely that an illegal monopolist is using it's ill gained cash to empower a repressive regime all in the name of extending their brand! Microsoft, the Imperial Robber Barons of the 21st century.

    Power really does make strange bedfellows.
    • A minore point -- the Chinese Yuan is not hard currency. You can exchange into it (through state banks), but not out. It's possible to exchange overseas, etc, but I don't think a real forex market (i.e. billion dollar transactions) has been developed yet.

      This leads to situations where companies that are actually making money in China (precious few) can't repatriate the earnings to the mother ship -- they have to invest it in the local economy, or stick it in the stock-market casinos.

  • In related news... (Score:4, Funny)

    by snofla ( 236898 ) on Thursday June 27, 2002 @04:16PM (#3782065)
    "MICROSOFT EXPECTS TO lose $750 million in the current fiscal year ending June 30 and another $1.1 billion in the next fiscal year, according to a source familiar with the matter. David Hufford, a Microsoft spokesman, declined comment on the financials." From "Microsoft takes big losses on Xbox" [msnbc.com]

    Hope they have a good accountant.
  • The entire open source philosophy would appeal to china as it is more akin to the countries communist ideals. If china were to switch to MS products, they would be forced to bow down to american capatalism. It would also be very easy for MS to slip in a little 'extra features' that could allow the US government to spy on china more easily. If they are using linux, it would be extremely difficult to spy on them, maybe china realizes this.
    • The entire open source philosophy would appeal to china as it is more akin to the countries communist ideals
      Why does this drivel continue to persist?

      The "Open source" philosophy is a development model for software. The software is still "owned" (copyrighted), which is strike one against the "open source is communism" crap.

      Looking at the ethical side ("Free Software", RMS and all that), communism (as traditionally implemented) is totally at odds with free software, which is all about empowering users and maximizing freedoms their freedoms. Communism is most definitely not about empowering citizens and maximizing their freedoms.

      • The "Open source" philosophy is a development model for software. The software is still "owned" (copyrighted), which is strike one against the "open source is communism" crap.

        Correct, to a point. Free Software is also NOT communism, it is Freedom and it encourages a Commons and a Community. Like the US Constitution, Democracy, Authoritarianism, and Existentialism, it is orthogonal to economic systems, be they Communism, Capitalsim, Feudalism, or Barterism.

        In contast you seem to have equated Communism with Authoritarianism, which is a very inaccurate equation to make.

        I should point out that (a) your rant against communism would more appropriately be aimed at Authoritarianism. It is an American myth that there was no democratic communism (there was a thriving "democratic" communism in Spain, which was coopted and then legislated out of existence by the Spanish government with the active and covert aid of both the United States (who couldn't stand to see any communist system succeed, and contrary to the other examples this one was succeeding and even out competing their capitalist counterparts in the country) and the Soviet Union (who couldn't stand to see a democratic form of communism succeed as that would undermine their entire "authoritarianism is necessary for communism to work" propoganda).

        Authoritariansim is Bad, Republicanism and Democracy are Good.

        Communism, Socialism and Capitalism all fail miserably in their purest form, but work reasonably well in modified, moderate forms, so long as the political climate is sufficiently free to allow the economy some degree of self-organization. (It is another American myth that communism is by definition a centrally planned economy, though the vast majority of authoritarian implimentations were. The example cited previously, in Spain, was not centrally planned, it was a self-organizing economy of collectives who traded amongst themselves and with their capitalist counterparts).

        The mix we had in the west during the 70's and 80's (the rewards of which we reaped in the 80's and 90's) was probably the most successful, but the emergence of unaccountable corporatism appears to be wrecking the once successful form of capitalism we practiced here in the west, perhaps even as much as the unaccountable authoritarian regimes wrecked any chance at a functional communism did in the east.

        Finally, back on the topic of the thread, China's communal culture is more amenable to Free Software in many ways than it is to a foreign monopoly like Microsoft (remember, the British ruled China with an iron fist through trade monopolies, so this is more offensive to them than to us, which is saying a lot because monopolies are, or should be, very offensive to anyone who values a free market).

        And, last but not least, China is really only communist in name ... its economy is as capitalist as any western economy (which isn't saying a lot if you look at any western economy closely ... think corporate welfare, which is rampent, protectionist tarrifs, legislated monopolies, and so forth, all of which undermine or even eliminate free markets).

    • Re:microsoft is against chinas ideals (Score:4, Interesting)

      by liverdonor ( 588826 ) on Thursday June 27, 2002 @06:19PM (#3782915)
      This is just the sort of generalization that has caused problems for humans for many 10^3's of years.

      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.

  • I'm interested to see what countries like china, who are pushing hard for the use of Non-MS s/w (from MS point of view), will do when MS throw money at them?

    What were their original intentions?
    -Open source is better we should use it
    -Lets scare MS into giving us a better offer

    I hope/feel China is of the first, but I wonder about others. I live in the UK where our authorities (NHS IIRC) were looking at Linux til MS gave a discount
  • They'll probably sink that 750 million into spam, great, here comes another unwanted email.
  • Think of the it. Some day China may be taking M$ to court for monopolistic tactics. I kind of doubt anyone at M$ will be standing in front of any communist fact finding mission about poor software design or trade tactics. Here you can plead the 5th, their they can do some unsavory sort of punishment [fordham.edu]
  • I pledge allegiance
    To the conglomerates
    of the marketing and legal departments of Microsoft
    And to the domination
    for which they stand
    One company
    Invincible
    With License fees and big brother for all

  • $750 Million? Depends how you count... (Score:3, Interesting)

    by WEFUNK ( 471506 ) on Thursday June 27, 2002 @04:41PM (#3782228) Homepage
    Microsoft makes an annoucement that they're "investing" $750 Million somewhere, but what does that really mean?

    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 .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?

    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.
  • One of China's primary motives in pushing for the adoption of Linux was its inherent mistrust of closed-source American software products.

    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.

    • 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.

      Or even worst from Microsofts POV, ending up published where people from North America and Europe can read it.
      Though it's more likely to be code from MS Office than Windows :)
  • But Microsoft would be better served PR wise by investing the money in their home country.

    Besides that, I don't look at MS spending 750 Mil over three years as actually spending money. 750M / 3 = 250 M / yr. For a company that has over $40 in cash and add about $1 Billion / month [cnn.com] that isn't a very huge donation. They make that back on 1% annual interest rates. MS probably gets, overall on their cash something more along the lines of a 4 or 5% benefit. That's $1.6 - $2 Billion per year in interest.

    $250 Mil isn't insignificant, but this is like piss in the ocean to MS. And, again, if they had donated that to US schools or to American industry, but particularly schools, then they would get a huge PR boost here. We'll see how China's Empire responds to Microsoft's empire, I suppose. Should be interesting.
  • M$ just wants to keep letting them have free samples, they don't want the habbit kicked just yet. Then when they have their whole .NET framework, BAM! They'll lock it down and cut off the copyright violations. They'll finally start makin some money off them.

    If they don't do this and linux begins to be the flavour of choice, the chinese won't fall into the trap.

  • China trusts Microsoft? (Score:3, Funny)

    by weave ( 48069 ) on Thursday June 27, 2002 @05:18PM (#3782468) Journal
    Imagine the good that ole Bill could do. Plant a trojan in every copy, set to go off years from now. When the magic date hits, start sending state secrets to U.S. on one hand, while opening up a tunnel around their firewall blocks and blast every normal computer user in the country with a real look at the outside world of news, events -- and boobies!

    He could trigger a revolution! :-)

    • Plant a trojan in every copy, set to go off years from now. When the magic date hits, start sending state secrets to U.S. on one hand, while opening up a tunnel around their firewall blocks and blast every normal computer user in the country with a real look at the outside world of news, events -- and boobies!

      Huh. I imagine that the people's republic is encouraged by the new "security" model of Palladrone and all of it's great people management potential. Someone in the party might have had second thoughts about this compiler and freedom thing from Linux. Of course the party does not trust M$ and will keep any information from getting out of the country if they can. China does NOT want free comunications, nor does Microsoft, as demonstrated by their EULA.

      Porn is a standard component of prolefeed.

      • I work at a college, and see a few Chinese nationals come here for an education. It's amazing how infatuated many of them are about porn. Way back in 1992, a student named Wang went ape shit over alt.binaries.erotica newsgroups. He sat down and wrote a program that would crawl the entire newsgroup and decode all of the multipart postings into files. Now, back then, this was a big deal. We take that for granted now, but to this day, its still useful. I can just run "wang" and let it churn for a few hours, come back, and have a directory full of images. He also got hold of an Radio Shack tone dialer with a different crystal and would sit in the lobby and red box himself into China at a few bucks a minute.

        He loved this country! :)

  • Pretty much what they did in Mexico too (Score:4, Interesting)

    by Locutus ( 9039 ) on Thursday June 27, 2002 @05:22PM (#3782486)
    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
    • Your comment got me thinking about how MS handles there money.

      Computers, software, monopoilstic tactics, and technology asside, MS handles its business quite strangely. Specificly they issue very, very small dividends to its shareholders. BillG and friends would rather MS keep the cash then give it out to the other owners. If what you say is true and they have a history of large, apparently stupid, expensive projects, prehaps its possible the the BOD of MS would rather piss away there money then pay taxes or pay out dividends.

      hmm....

  • Peanuts... (Score:2, Informative)

    by burnsy ( 563104 )
    According to MS's latest financials [microsoft.com] it takes them about 27 days (they earned 27.5 million per day last quarter) to make 750 million in operating profit.

    750 million on China, 1 billion on the XBox, 2 billion on XBox live...its all peanuts.

    • it takes them about 27 days (they earned 27.5 million per day last quarter) to make 750 million in operating profit.

      Sure, but that's because they convinced WorldCom to use Visual Basic for their accounting software, and all the "rounding errors" were transferred into Microsoft's bank account.

  • I kinda doubt Communist China will really be into Microsoft, they may take the offer, but I seriously doubt they will take any Microsoft demands seriously or convert to Microsoft totally. Microsoft is simply too much a gleaming example of capitalism and indivuality, the antithesis of what China wants. Linux if anything stands for community and socialism. Hell it wasn't until the last couple years that the Chinese kept indivual basketball player stats, and if a player out performed his team mates he was publically ridiculed for it. I doubt they will have a longterm relationship with anything Microsoft.

  • How China Linux Works - why microsoft will fail (Score:5, Interesting)

    by akbkhome ( 564173 ) on Thursday June 27, 2002 @05:47PM (#3782614) Homepage
    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...

  • So. This is Micros~1's idea of, "Competing on the merits," eh?

    No quality or reliability improvements, no improved interoperability, no improved standards compliance, no "better mousetrap", not even improved corporate citizenship. Just put all the country's officials on your payroll and order them to starve off the competition.

    Hopefully the Chinese are wiser than this.

    Schwab

  • According to this [gamespot.com] story on gamespot.com, that's the exact same amount they're losing on the X-Box this year. Apologies if someone else already pointed this out, but seemed like an interesting coinceidence (draw your own piracy related conclusions).

  • Bill Gates starts World War III? (Score:4, Funny)

    by dcavanaugh ( 248349 ) on Thursday June 27, 2002 @06:56PM (#3783269) Homepage
    I used to think that World War III would start in the Middle East, but now I know better. The Chinese will think all the Microsoft bugs and security loopholes are a cyber-attack from the United States, when it's really just the products behaving as designed.
  • WHY THE HELL the US has NOT YET placed blocks against US companies selling technology to commie countries?

    Ugh. This is getting annoying.

    ::insert standard line about MS software being so insecure that it is a good thing the commies will be running it::

    I [i]so[/i] hope that the CIA/NSA/Whatever are behind this and shoving security holes in all the pertinent software sold to the commies, maybe then for once they would actually be doing their [i]job[/i] instead of working on spying on us the U.S. people. . . .

    Annoying.
  • 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.

    Isn't this just a standard Microsoft practice anyway? When was the last time Microsoft or the BSA actually cracked down on home networks which had 5 copies of windows all using the same serial??? The cash cow for Microsoft is in getting government compliance... tax the government... hrmmm....

  • Getting a nation which is -- considering the number of people in it -- very poor...to pay $100 for each copy of windows (ok, maybe its $10 per copy on a volume deal). Dream on.

    Same thing with Russia.

    Ditto with India.

    Sure, they'll pirate your software -- that's free. But why pay for it?

    The fact is that Linux is the future in Russia, China, and India. Heck, because these government's don't have to worry about BSA lawsuites or pay expensive licensing fees, Linux might even rejuvinate their starved economies.

    Government's around the world are starting to realize that Linux is -- in every way important -- superior to MS. The deficiencies in Linux (read, GUI, Xfree, anti-aliasing, [minor] hardware recognition [moderate]) can easily be fixed using the kind of money the government throws around.
  • Consider the fact that China is the largest country in the world.
    Now try to see that internet is the big antidote against propoganda.
    Internet in China is unstoppable, and we will probably see a revolution in less than 10 years there. If such a large country starts participating in the industry with opensource software, it could tupple the balance for Microsoft. The Empire isn't stupid, they just can't make software.
  • Advogato's [advogato.org] member zhaoway [advogato.org] has written a couple of technical articles on Linux that are published in Chinese by IBM developerWorks:

    I think with IBM investing in the Chinese Linux market, to the point of funding the education of Chinese kernel programmers by publishing articles like the ones Zhaoway is writing, we don't have much to worry from Microsoft.

    Also, the Open Source Development Lab's [osdl.org] Japan Development Center [www.osdl.jp] was kind enough to recently translate a couple of my Linux kernel testing articles into Japanese:

    • Why We Should All Test the New Linux Kernel - Japanese [www.osdl.jp] - English [sunsite.dk]
    • Using Test Suites to Validate the Linux Kernel - Japanese [www.osdl.jp] - English [sunsite.dk]
    These and the other articles [sunsite.dk] at the Linux Quality Database [sunsite.dk] are all so far published under the GNU Free Documentation License. I was quite excited when the OSDL first mirrored the original english versions and then provided the Japanese translations.

    I would personally be quite stoked if anyone translated any of the articles to other languages. There is also an article on web server application testing as well as one on C++ programming. I have more planned and invite others to contribute articles that have the general aim of improving the quality of Free Software.

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