I’ve heard of the South China Sea pearls, Shanghai’s silk carpets, or Hangzhou Longjing tea, but never have I come across Chinese Windows 10.
Microsoft made a Chinese version of its latest OS (operating system) Windows 10 called ‘Windows 10 China Government Edition‘. The announcement was made on 23 May 2017. What’s Microsoft up to? Previously, the company also agreed to sell patents to Xiaomi, a privately owned Chinese smartphone maker. In Sep 2015, Microsoft provided NATO with a ‘front-door to look for Microsoft’s back doors’.
There’s a pattern in Microsoft’s method. Do what it takes to capture the market in whatever form you can. After all, how else can you make money or stay relevant while playing catch-up when it comes to releasing innovative products.
Based on Windows 10 Enterprise, it took CMIT, a joint venture between Microsoft and CTEC (China Electronics Technology Group) two years to get security review of the Windows by the Chinese government. The version is only for the Chinese government and state-owned entities. During the announcement, Terry Myerson, executive vice president of Microsoft’s Windows and Device Group also praised the Chinese inventions of the compass and the abacus. No wonder Mason Cooley got it right when he said that “Flattery, and insults raise the same question: What do you want?”
We know what Microsoft wants? The company wants to make up for the losses it endured in China, from massive piracy of Windows XP to a blanket ban on Windows 8. They haven’t been able to breeze through the Chinese market and what better way than to partner up with CTEC, a state-owned enterprise that develops hardware and software for the Chinese military.
“With the strong support of CETC and Microsoft, CMIT, our joint venture, has now developed a version of Windows 10 for China government customers. This monumental moment was only possible through our partnership and support of the Chinese government,” said Terry Myerson, Executive Vice President, Windows, and Devices Group.
China Customs, City of Shanghai (EITC), and the state-owned enterprise Westone Information Technology are the first three customers to pilot the Chinese edition of Windows 10.
And, there are crucial pieces of the system that Chinese government didn’t allow Microsoft to handle, such as the encryption algorithms within its computer systems. The Chinese government will use its algorithms to secure the systems.
A notable thing is the use of Windows 10 Enterprise Edition by the world’s leading government customers such as the Italian Ministry of Defense, Australian Health Department, and the U.S. Department of Defense. However, none of them asked Microsft to make a tailored version.
China’s decision to get a customized version of Windows comes as no surprise. The country is “already one of the world’s most restricted technology regimes,” wrote Bloomberg News. “China’s new Cybersecurity Law will become effective on June 1, 2017,” reported Sara Xia of China Law Blog. The law requires foreign technology firms to go through contentious security reviews and store their data on servers in China.
How to Appease Restrictive Regimes?
In the case of Chinese government version of Windows 10, what comes as a pleasant surprise is Microsoft’s ability to appease the government by entering into a joint venture. Hats off to Microsoft for being persistent with its China policy.
Not every company targeting the Chinese market from abroad is able to crack the code of this market. After all, Bill Gates is not Steve Jobs who would keep the company’s technology and systems as closely knit and insulated from partners as possible. Jobs would always resist sharing Apple’s intellectual property or opening backdoors within Apple products. It isn’t surprising that Apple refused Chinese request of iOS source code. Same can’t be said of Microsoft. The Redmond-tech giant renewed its 12-year-old agreement with NATO allowing NATO “controlled access to source code” for its core enterprise products”, reports Richard Chirgwin.
Microsoft, under Gates’ leadership, is known to hammer out partnerships when a deal is expected to deliver fat cheques or a previously untapped market. Even if it means coming up with a ‘Chinese government’ version of its new OS or selling intellectual property.
People spinning Microsoft’s wheels are also pretty open to partnerships where the end-goal is to capture a market. Of course one needs to sugar coat the strategy with pleasant sounding corporate speak. And, who does it better than Microsoft.
“It’s about listening to what China is asking for and working up a solution that can fit their request. And who best to help us but a local partner? Because it’s not just about the translation. There are other things. There are nuances in any application that you take from one environment to another, and we don’t profess to know everything about that. So we’re looking and will continue to look for partners to help us on our journey in China,” told Peggy Johnson, executive vice president of business development at Microsoft while talking to Wall Street Journal’s Rebecca Blumenstein.
China Wants Technology on its Own Terms
While Microsoft is marching ahead with its ‘China policy’ inking deals and releasing the forked version of its OS, the new cybersecurity law I talked about earlier has made foreign technology firms nervous. “More than 50 trade associations and chambers of commerce signed a letter in May to the government seeking a delay,” observed Bloomberg News. The nervousness is understandable. There are some broad strokes of national security at play by the Chinese government.
“For example, rules limiting the transfer of data outside China’s borders originally applied only to “critical information infrastructure operators.” But that was changed mid-April to “network operators,” which could mean just about any business“, writes Bloomberg. You don’t need to be an uber-clever person to understand the consequences. Even a small email system may be categorized as a ‘network provider’ when the need may arise. Foreign technology suppliers always had a hard time selling in China. The trend is expected to continue until they learn a thing or two from Microsoft.
How does it sound to sell patents or forked versions of your product as a go-to-market strategy? That’s for you to decide. But, Steve Jobs words may echo in my ears:
“The only problem with Microsoft is they just have no taste. They have absolutely no taste. And I don’t mean that in a small way, I mean that in a big way, in the sense that they don’t think of original ideas, and they don’t bring much culture into their products,” Steve Jobs.