Original title: thirty years of Microsoft’s entry into China
Author: Lord of Sun Moon City
On March 21, 1994, at the spring equinox in Beijing, the noise and agitation of the day still remained in the air at sunset.
A Boeing 747 plane slowly landed at the capital airport. A young man in a plain shirt and coat, jeans and sports shoes stepped down the gangway: beside him, except for the interpreter, there was no accompanying person.
This young man is Bill Gates, President of Microsoft, the world’s largest software company.
Bill Gates in 1994
The moment he stepped into the land of China, the world caused a sensation. The eyes of every country in the world were staring at him and every move in China. And Bill Gates and his Microsoft company are also destined to have an indissoluble bond with China.
At that time, China, the ancient land, the spring breeze of reform and opening up was blowing all over every corner. Gates came to China to investigate China’s investment environment and understand the strength of China’s software industry.
When he was interviewed by senior officials of the Chinese government, Bill Gates put forward the idea of “trying to help China develop the software industry”.
Nevertheless, there were still many people in China who were skeptical about Bill Gates’s visit and even the coming Microsoft’s entry into China.
The reason is simple: at that time, China’s national software industry was just starting. If Microsoft, an international enterprise, were allowed to enter, would the fragile national software industry be destroyed?
Some of the media are even more straightforward. For example, when interviewing Bill Gates, the reporter of China Economic Daily asked rudely, “it is said that the Chinese industry is not welcome to your visit.”
Bill Gates avoided answering.
In fact, the volume and huge temptation of China’s market were irresistible to any entrepreneur at that time.
In the 1990s, although Internet cafes are still the main battlefield of computer consumption in China, many families in the eastern coastal cities have begun to prepare for “buying computers”. According to statistics, by 1995, China’s computer sales will reach or exceed 1 million units, with a total amount of 20 billion yuan. Although this consumption level is not high, the annual growth rate of 30-40% can not be ignored. Soon, China will become one of the largest computer markets in the world.
In the face of the prospect of “entering China”, Bill Gates once thought about whether Microsoft can monopolize China’s software market with its huge advantage in operating system? Will China shut Microsoft out on the pretext of protecting its own industry? Can Microsoft open up the situation and gain a firm foothold in China?
But it’s a huge meat market in China. So he was determined to enter China.
On December 8, 1994, Bill Gates signed a memorandum of cooperation with the Ministry of electronic industry of China. The two sides agreed to jointly develop the Chinese version of Windows 95. Bill Gates wants to cooperate with the Ministry of electronic industry to improve the Chinese font and input method of Windows 95, so as to seize the commanding height of China’s computer market.
This memorandum is regarded as a stepping stone for Bill Gates to open up the Chinese market.
Microsoft’s market strategy in China is divided into two directions: B and C.
At the B end, Microsoft has taken a step-by-step approach to carry out extensive cooperation with Chinese developers and sellers. At the same time, it has helped to design the computer system used by the government and install a special version of windows system that meets the government’s requirements.
The ecology of C-terminal is far less than that of b-end.
At that time, the price of a genuine Windows 95 was about 1000 yuan, and when Win98 was just launched, the price was up to 1998 yuan in order to meet the situation. At that time, this figure was close to the square meter house price in the central urban area of the eastern coastal cities. How could the common people afford it?
This just gives pirates space. After each version of the windows system is launched, it can be as fast as a few months, or as slow as half a year. Piracy will come out on the market. You can buy five, eight, and ten copies of a CD in the back street of the University. People who buy pirated copies use cheap and fluent systems, while those who sell pirated windows run into a well-off society.
Microsoft, of course, sees it. But in the initial period, there was no move to stop it. In Bill Gates’s view, under the premise that popularity is not fully popularized, and the genuine edition is so expensive, these pirates are just like helping him do free advertising.
On July 20, 1998, Fortune magazine published an interview with Warren Buffet and Bill Gates. When asked about Microsoft’s China strategy, gates answered:
“The Chinese won’t pay for software, but one day they will. Since they want to steal, we want them to steal ours. They’re addicted to it, so that in the next 10 years we’ll find a way to get them to pay. ”
In the commercial battlefield, this is a strategy. With such a large population and a large market in China, it is hard to know how much money it will cost to cover them thoroughly with advertisements. And then we can rely on the system for free, and then we can put it on the market.
In today’s view, such a game is like Internet companies burning money to expand market share.
In this way, Microsoft’s market share in China was once as high as 90%.
Microsoft’s huge success also brought a side effect, that is, Chinese users have a strong dependence on the imported windows system. As a result, after the rise of Apple iMac, many Mac users who bought the MAC for fashion had to install a set of windows next to Apple’s system – the shell of apple is to install Force, and the internal windows system is for their own use.
In addition, there is a more terrifying side effect: China’s domestic system has been suppressed and suppressed for a long time. In addition to the party, government and army and other state organs or institutions, the standard configuration of most commercial and civil computer systems is:
Crack down on counterfeit goods
After acquiescing Chinese users to fully enjoy cheap pirated products and creating a dependence that cannot be extricated, Microsoft began to attack piracy.
In 2006, Microsoft timely sent a lawyer’s letter to tomato garden, the largest pirated consumer at that time. On August 15, 2008, Suzhou police arrested Hong Lei on charges of infringing intellectual property rights. This time, it was very successful, and companies such as Yulin Mufeng and deep technology transformed one after another.
At the same time, many domestic users of pirated windows were surprised to find that the computer screen would be black from time to time. This was Microsoft’s practice in the name of genuine, which caused a great stir at that time and caused great resentment of domestic users. It wasn’t until the government called on Microsoft to pay attention to the reasonableness of its black screen strategy.
Although there were a lot of criticisms at that time, after the storm, the domestic consumers basically thought nothing had happened. After all, the formation of habits made it difficult for them to make changes; moreover, China did not have a decent operating system.
A large part of the domestic computer industry’s sales come from b-end procurement, whether it is the government or enterprises. The domestic Linux system has been mentioned all the time. At that time, the application ecology of the system was still blank, which caused many manufacturers to uninstall Linux and install pirated windows.
With Microsoft stepping up its crackdown on piracy, more manufacturers have to use genuine windows.
In the year that Microsoft began to crack down on piracy in China (2006), founder, Tsinghua Tongfang and other domestic computer companies visited the United States and purchased a total of 1.7 billion US dollars of orders from Microsoft, which was also regarded as a signal by the industry that there was no suitable system provider in the market except Microsoft.
Chinese users are struggling to make a choice between pirated and genuine copies. There is only one thing that they can’t choose: windows.
In May this year, a Baidu statistics showed that China’s windows 10 system market share reached 33%, and the windows 7 system market share was 48.24%. In other words, windows 10 and windows 7 together occupy more than 80% of the market share.
Not only the system, but also the office software series of Microsoft department also occupy the mainstream market in China. In 2019, the number of enterprise subscribers of office365 reached 166 million, and the number of individual subscribers was about 34.8 million, showing a continuous growth trend.
Up to now, we have to admit that in the past 20 years in China, Microsoft has basically eliminated all the local and international competitors, and has become the dominant one in the Chinese market.
In other areas, such as the mobile phone market, despite Apple’s high profile, there is still competition from Samsung huami ov. For computer systems, almost all computers are equipped with Windows system; for IOS, it can be said that those who can IOS will surely know windows; those who can windows may not necessarily have IOS.
In this regard, we can not help but ask, where is the domestic system?
In fact, China started very early in the development of computer systems.
In December 1969, Peking University began to take the lead in tackling the “150 computers”, the earliest operating system in China. The purpose is to improve the calculation of oil exploration data and increase the production rate of drilling wells.
Twenty years later, in 1989, the COSIX system project was launched. At that time, the domestic hardware was greatly backward, the system research and development couldn’t keep up with the technological update, and could not be compatible with the most advanced electronic equipment.
Developing system is a way of high investment, low production and high risk. The state has no money and no policy support, and even if a huge amount of money is invested in it, it is uncertain whether its own domestic system can be accepted or even profitable in the future.
As for the difficulty of system development, give an example.
There are 40 million lines of code in Windows XP, 50 million lines in Windows 7, 15.9 million lines in Linux kernel code of version 3.6, and 65 million lines in Debian system of Linux distribution, and these codes are the result of repeated simplification by software manufacturers.
In terms of funds, Microsoft spent more than $20 billion on the development of Vista, while Linux only spent billions of dollars on its kernel. According to the scale of personnel input, it is estimated that it will also cost billions of dollars.
Therefore, in the era dominated by the idea of “making fast money”, adhering to the “taking principle”, relying on the ecology of Microsoft, and rapidly realizing revenue, became the way for most people in the computer industry at that time. Basically, no one will choose the road of domestic production.
This will continue until 2018.
In 2018, with ZTE being beaten hard, people found that our electronic products and software industries for so many years were built on the foundation of others. Once the foundation is removed, the buildings above will collapse.
As a result, domestic substitution began to be mentioned, and the fire of independent rise of domestic operating system was ignited. However, China’s computer industry, which has been under the rule of Microsoft for many years, even those domestic R & D enterprises in the early 1990s have lost their vigor, and the high asset prices have also hollowed out young people’s physical and mental health. It will take time for independent R & D to make great strides in a short time.
Wake up from a dream
On August 9, 2020, a rumor spread in low intensity on the Internet. Microsoft has updated the service agreement on its official website, stating that if Microsoft fails to perform or delays in performing its obligations due to force majeure, Microsoft will not assume any responsibility or obligation.
If one day I don’t provide you with Windows system, I can’t be blamed.
Although it was later found that this was not the latest clause, it was an exemption clause in the agreement of Microsoft for many years. However, at the moment of thunder and lightning in Sino US relations, it seemed like a bolt from the blue, waking up 1.4 billion people.
In a trance, people realized that if one day Microsoft stopped supplying windows to us, most of the computers in China would not be able to turn on their computers, chat, buy online, work or speculate in stocks. It’s even more lethal than a chip cut-off.
Although Microsoft quickly issued a clarification statement, saying that “its commitment to providing services to Chinese users is unswerving”, there are still speculation that Microsoft is afraid that tiktok and wechat will happen again on its own head, so it urgently revised the agreement; then, if the U.S. government issues a ban on Microsoft, requiring it to cut off its supply to China, then Microsoft does not need to provide compensation.
When Microsoft entered China 30 years ago, no one would have thought that today, China and the United States would be at war. Today, over the past 30 years, the Chinese have become extremely dependent on Microsoft and windows systems, and Microsoft has successfully suppressed China’s local computer system industry.
It is true that if the U.S. government asks Microsoft to cut off its supply to China through an administrative order, then Microsoft’s marketing and profits will be thrown into the street. However, in the context of the game between big powers and even arms race, politicians will not care about the survival of one or some of their own enterprises for the sake of national interests. On this point, we must not hold the naive illusion of “trump is a businessman” and avoid facing the complex and severe struggle of great powers.
Microsoft has been in China for 30 years, which has made Chinese people more convenient, improved their living standards and international level. However, the domestic computer system has not been able to thrive——
Is this the conspiracy of others or our own carelessness?