Microsoft in China

Any business interested in breaking into the Chinese market should look consider Microsoft as a case study. David Kirkpatrick from Fortune Magazine explains how Microsoft has turned things around in China. It’s a good read.

On that note, you’d think open source would have some natural advantages in China, right? Its low cost and the license mean freedom from a foreign firm. Those are just some of the reasons Linux has been pushed by the Chinese goverment in the past. Yet in actuality, open source faces a lot of challenges here. Low cost and licensing might be a driver of open source in developed economies, but when licenses are ignored and commercial software pirated for free, as they are in China, the game changes.

Microsoft has other advantages too. Bill Gates is a symbol of wealth in China and there are plenty of Chinese computer science grads hoping to strike it rich (which is one of the problems with the computer industry here). So add his reputation to Microsoft’s reputation as the biggest and best software company in the world and the attraction becomes obvious. Moreover, Microsoft can develop a focused China strategy while the Linux competition is split across multiple vendors, both local and foreign, and none of which, with perhaps the exception of IBM, have the brand recognition to match.

One the one hand, I commend Microsoft for finally getting their China strategy in order and seeing some success here. On the other hand, I wish the Chinese government and people would see past the shiny Microsoft image and consider the long term implications of basing their IT industry on a foreign monopolist.