Is Microsoft intentionally killing the Chinese desktop software industry?

It is an inconvenient truth that China's local desktop software industry, for a long time now, has been badly aggrieved by the piracy of Microsoft products. Although most of the Chinese software companies base their products on open source, they cannot really compete against the illegal copies of Windows and Office, because the latter normally cost only a few dollars down on the street. Funnily, pirated or illegal copies of Windows and Office are almost "free" (like in beer) here in China. The real twist about it is, that free (like in freedom) and open source software are normally more expensive for the Chinese user, because the online fee for downloading free software is higher, than the one or two dollars for a pirated CD or DVD. But that is bad enough!

I recently read an article 'How Microsoft conquered China' on CNNMoney.com, which reported that Bill Gates regards tolerating software piracy in China as part of Microsoft's (monopoly) business strategy.

Let me quote from the article:
Today Gates openly concedes that tolerating piracy turned out to be Microsoft's best long-term strategy. That's why Windows is used on an estimated 90% of China's 120 million PCs. "It's easier for our software to compete with Linux when there's piracy than when there's not," Gates says.

This simply says that Microsoft refuses to fight criminal perpetrations in order to gain business advantage over its local competitors.

Another quote:
Microsoft's China strategy is clearly paying off. More than 24 million PCs will be sold this year, adding to the 120 million already in place. Although the company's China revenues average no more than $7 for every PC in use (compared with $100 to $200 in developed countries), Gates says those figures will eventually converge.

Well, it seems like Microsoft is also dumping prices in China for the same reason. US$7 is not much more than buying Windows on the street. This price is only sufficient to pay the expenses of producing and packaging the CDs for the software, but not to generate revenue for the development of the products themselves. Consequently, Microsoft's users in Europe and the United States have to pay extra money to support this doubtful business practice in China. And, last but not least, local Chinese Companies producing desktop software will have no chance to earn money, until this issue is somehow resolved.

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Peter Cheng

Peter Cheng is a community strategist and open source evangelist, who is based in Beijing, China. In 2003, he initiated the Open Source University program to gather industry experts and help spread open source technology and culture to over 100 universities. In 2007, he organized the Open Source Camp in five Chinese cities, with the aim to enable the open source community to share and exchange ideas and to promote the technology in China. Peter currently runs TargetSource Tech, a company he founded to provide consulting services on enterprise open source software.