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12.31.07

How Microsoft Operates in China and Parts of Asia

Posted in Asia, Bill Gates, Deals, Free/Libre Software, GNU/Linux, IBM, Microsoft, Open XML, OpenOffice, Oracle, Steve Ballmer at 3:22 am by Dr. Roy Schestowitz

A report and a linkfest from the big continent

Some days ago we accumulated and presented examples of heavy lobbying or manipulation in Europe. This time its Asia’s turn. We write about this for cross-referencing purposes in the future. We wish to make it understood that influence exists and thrives everywhere.

Let’s start with the latest news from China. The following new article articulates the relationship between Bill Gates and president of China.

In his first official visit to the United States in 2006, China President Hu Jintao arrived for dinner at Microsoft Corp. (NasdaqGS:MSFT – News) Chairman Bill Gates’ house with a gift for the host.

Shortly before Hu’s Seattle visit, the Chinese government had issued a decree requiring all personal computers manufactured in China to come with a licensed operating system before leaving the factory gates.

There is more to it here.

I believe that most people do not grasp the immense entity of Microsoft. This is an organization and a man who commands the attention and bidding of world leaders. On a recent trip to America, the President of China spent his first evening in the United States, not with our President, but Bill Gates. He was the guest of the Gates mansion that first evening and the guest of honor for a dinner attended by over one hundred people. Why? To ask him to crack down on Software piracy and to insure that his computer manufacturers put Microsoft Windows on thier newly made machines instead of shipping them with no OS. He didn’t see the President of the United States for over 36 hours…he spent that time with Bill Gates at his home and at the Redmond Campus.

This affair goes beyond Bill Gates as an individual. Steve Ballmer, for example, was considered by McCain as candidate for ambassador to China.

In another move that was sure to infuriate many geeks, the 70 year old presidential hopeful also said that he would ask Microsoft CEO Steve Ballmer to serve on his cabinet to deal with technology issues if elected. He did not however say what position Ballmer might be hired in, but did joke that he might consider him for a diplomatic position, such as ambassador to China.

This brings us to a very important issue which we cover in this site quite extensively. Remember China’s waffling on OOXML? Here is a quick reminder, which opens up with a general background to this issue.

Microsoft has seemed to be flying high in the Peoples Republic of China lately. Bill Gates spent several days in Beijing earlier this year in meetings with high-level officials, after hosting Chinese President Hu Jintao the spring before at Gate’s own home. And legitimate copies of Microsoft products appear to be at last gaining ground in comparison to pirated copies, albeit at the price of discounting them to almost unimaginable levels (students can now reportedly obtain a Windows/Office bundle for the incredible price of $3). Many credited Microsoft’s pragmatic decision to accept Chinese realities and not insist on having everything its own way.

Here is a detailed article about OOXML being unsuitable for the Chinese population.

Another standard that Microsoft does not support, is the RFC 3987 specification, which defines UTF-8 capable Internet addresses. Consequently, OOXML does not support the use of Chinese characters within a Web address.

Microsoft also did a bad job in creating a document format for the whole world, which is an important requirement for an ISO standard. Considerations for users in Israel and many Muslim countries were excluded in the specification of OOXML. For any locale, the function ‘Networkdays()’ will always return Saturday and Sunday as the weekend. However, this is wrong for Iraq, Algeria, Sudan, Bahrain, Qatar, Bangladesh, Israel, Jordan, Libya, Pakistan, Syria and the United Arab Emirates. ODF handles this correctly.

There are many more examples why OOXML isn’t a suitable candidate for an ISO standard yet. From my point of view, Microsoft should stop, as soon as possible, bringing more redundancy into office document formats.

It would be much better if Microsoft takes the good ideas and technologies from OOXML, and tries to join an effort to unify ODF, UOF and OOXML. For those interested, the blog of IBM’s Robert Weir, is a good source to get informed about the issues of OOXML.

I hope China will not support OOXML in its ISO voting, but force Microsoft to consider talks for one harmonized office document standard for the whole world.

Here is another vocal attack on OOXML in China.

We are calling on the government to veto the OOXML format at the International Organization for Standardization (ISO).” The OOXML format is a file specification released by Microsoft in December last year for its Microsoft Office 2007 suite. It is currently in a fast track standardization process with the ISO and will be subject to voting next month. Unlike the current ISO digital document standard ODF (Open Document Format) and China’s national standard UDF (Unified Office Document Format), Microsoft’s OOXML format can only be run on a Windows platform.

It is also criticized for containing many proprietary technologies that can only be fully supported by Microsoft’s Office products.

Due to such compelling circumstances, China eventually voted “No” to OOXML, but let us wait and see what happens in February. On several occasions, Microsoft stressed the importance of China to Microsoft’s future (and computing in general). There were some setbacks, such as the recent departure of Microsoft’s top man in China.

Microsoft said its global vice president, Zhang Yaqin, would take over as acting Greater China chief while it sought a permanent replacement.

The complicated story about GNU/Linux in Chinese desktops and smartphones aside (there are success stories also), it’s worth noting that there are intense battle against what Microsoft calls “naked PCs”. Vis-a-via naked PCs, mind the deceiving language that makes an open system seem like something unacceptable. In Europe there is a consistent reference to “unbunbling” at the moment, as opposed to “naked PCs”.

Microsoft clearly has a lot of influence in China (more than the United States government perhaps), but it’s hardly out of the ordinary. Here is a quick look at some other countries across Asia and — in particular — Microsoft’s manipulative role inside them. There are too many stories to cover, so here is a just sample which cites stories from 2006-2007 (mainly 2007). Some of the hyperlinks are broken or likely to break in the future, which is why snippets of text were extracted and added to tell a story.

The Philippines

The Philippines would benefit a great deal from Free software. The country wishes to make open source software a matter of national policy. This has gone on for a while and you can even find a draft of the proposed bill [PDF].

An act defining the procurement of software in government agencies, promoting the development, and use of free/open source software (FOSS)

This act shall be known as the “Free/Open Source Software (FOSS) Act of 2006

More optimistic outlooks can be found here.

Unlike the first two phases of the program that used the proprietary Windows operating system and Microsoft Office, the computers in phase 3 will be bundled with free and open source Fedora Linux and OpenOffice.

“This is the most important milestone,” he said, noting that the project went to Lenovo in a public bidding in part because its software costs were so low.

Free and open source software is also increasingly finding its way into state-owned universities and colleges, Lallana said.

Also mind the article here:

With the achievements of the Philippine Open Source Initiative Project (POSITIVE), its three proponents are seeking to come up with a follow-up program to ensure long-term sustainability of POSITIVE, this time targeting Philippine companies to play a role.

[...]

So far, Project POSITIVE has trained 218 teachers from 91 participating schools. Some of these schools have either fully implemented the POSITIVE courseware or some parts of it, depending on the school’s IT curriculum.

Sianghio said they are hoping to reach more than 100 school partners by November.

When the open source software bill came forward for consideration last year, certain familiar companies that suddenly showed up.

Listed for November 15th, the hearing by The Committee on Information and Communications Technology has invited comment from various stakeholders potentially affected by the bill, including community representatives as well as industry giants Microsoft and Oracle.

My vague recollection tells me that they successfully intercepted the bill. There is also a great deal of FUD in the Philippines, but good leaders such as Winston Damarillo thankfully combat it.

“It’s too late,” exclaimed Winston Damarillo, founder and chairman of software development firm Exist Global, in an interview with Computerworld Philippines. “Open source is all over the place.”

[...]

Anson Uy, president of Touch Solutions (a Red Hat Linux company), earlier on broke the news to Computerworld Philippines about the alleged “funded missions” by some software firms to discredit open source, although he did not identify any company.

Anson revealed among the top three actions against FOSS are being done through “sponsored studies, piracy of open source developers, and bold press releases.”

Vietnam

There are several good examples here. We covered a few of these several months ago.

Malaysia

There appears to be some heavy Microsoft lobbying in Malaysia. It comes at a time when there is a strong push for open standards and increasing adoption of Free software by the broad population and even the government.

As evidence of FOSS growth consider:

Q: What is the best way to implement open source in an enterprise environment?

A: You don’t have to go 100 per cent open source. In an environment, 80 per cent of the IT expenditure would go to the business software such as ERP, SCM, business intelligence, reporting tools, etc. This is where open source should be targeted at, where you can save the most.

There is a new type of trick which Microsoft is using to battle any push for open standards and open source software. Microsoft either pretends to be open (ISO 'rape') and even open source (OSI invasion) or it simply calls for something called “neutrality”, i.e. “don’t favour openness”. Examples include:

In a sign that the battle for the hearts and minds of both government and business clients is hotting up in Malaysia, the Malaysia Open Source Software Alliance has released and Open Statement on “Software Nuetrality and Openness”.

Microsoft has a role there and articles have had that type of participation covered. Here is another complaint about this:

The Malaysian government’s adoption of a neutral technology platform policy must ensure that a more level playing field is established, which benefits the consumers in terms of quality of service received and long-term gains, according to the newly established Malaysian Open Source Software Alliance (MOSSA).

Mind Malaysia’s sudden and unexpected reaction to ODF once Microsoft got involved (Malaysia had already made up its mind by that point).

Malaysia suspends ODF approval process

[...]

According to an article originally published earlier this week in the International Herald Tribune, a close observer to the Malaysian approval process said Sirim would actually prefer a merger between Open XML and ODF to create a single standard rather than two competing ones.

Thailand

There are several possible examples to be used, but here is the incident where employees from Microsoft apparently sabotaged OLPC in Thailand. Mind the following meeting Microsoft had with a minister.

About the meeting with Microsoft, he mentioned that he got a request from M.R. Pridiyathorn Devakula, deputy prime minister. [Note: It seems likely that the early meeting with Microsoft was about going to see the operation of British e-government.) Dr.Sitthichai said he will use his own money and contact British government directly instead.

For the OLPC project, he asserted that he does not oppose or intend cancel the project. This project was initiated during Thaksin's government with no financial support plan. Therefore, the government does not have budget to support the project. Kamthorn had a chance to clarify and talk about the project for a little while. The minister said he will bring that up for the next meeting with OLPC working group which Dr.Djitt Laowattana serves as a board director.

We have covered the OLPC sabotage campaign before and here is a relevant item from Slashdot.

Thailand’s new junta-appointed Education Minister has cancelled Thailand’s participation in the One Laptop Per Child project and scrapped a plan to give a 2B1 laptop to every primary school student

Attempts were made by the local Free software advocates to change the minister’s mind, but after the meeting with Microsoft, this sudden change of heart was hard to replace and supersede with another change of heart (reversal of a reversal).

Eight representatives from Thai Open Source Associations and users/developers of open source software met Dr. Sitthichai, Thai ICT minister, discussing about open source in Thailand and roles of the government.

They handed the open letter (asking for support of open source) with 800 names of supporters on to the minister. He apologized and admitted that he is hardware-oriented and does not have knowledge about software that much. He said he does not oppose. He just does not know. From now on, he is willing to support open source software usage and development by the local industry.

Questions remain. Because that seemed like a done deal at the time, this has similarity to the Microsoft bribery in Nigeria, which is a recent incident. Why are deals being diffused after an agreement? There are usually stories that happen out of sight and far from the media’s scope of coverage. On numerous other occasions in the past we showed how the press gets controlled, search engines manipulated (courtesy of Microsoft), and the Gates Foundation used as a tool that further personal ambitions. Here is a quote that makes you wonder (from the Billwatch database):

If it [the timing of the donation] had anything to do with the antitrust case, we would have told someone.”

–Ms. Stonifer, director William H. Gates Foundation

Reference: Responding to the question if the timing of Gates’ $3.3 billion gift…

Remember the Microsoft charity in India, which came just a few days after India prepared to say “No” to OOXML and also came just days before the decision got finalised?

Here is another relevant item from Thailand. The FOSS advocates tried hard to explain to the IT minister why he was making a terrible mistake:

Other than these, we see the following economic advantages in adopting open source software:

1. Reduction in the piracy rate…
2. Supporting the development of technology in-country…
3. Increasing the potential of Thai developers.

There remains hope in Thailand nonetheless.

Despite what the ICT Minister might say, open source software is a thriving business

Russia

This site has covered (at leas) two recent incidents in Russia, both which are worth citing. The first is about Russian schools. Microsoft plans to use tricks that it has already used in China in order to derail a migration to GNU/Linux. OOXML voting in Russia is another case where Microsoft played dirty. You are encouraged to just read those past items. We try to avoid repeating the stories here (self containment through cross-referencing rather than repetition).

Kerala (india)

Kerala’s examples of Microsoft dirty tricks come in the form of school incentives (a subtle form of bribery for persuasion) and other forms of diplomacy.

You are probably aware by now of the fact that Kerala is moving to Free software and GNU/Linux (Debian derivative/s).

The Linux slip-road that the state took is slowly becoming an express highway.

[...]

If we twist Napoleon’s quote on China a bit, we can safely say, “Linux is a sleeping giant, let it sleep, because when Linux moves the world moves!”

If you thought that Microsoft sits idly, think again.

He said Microsoft executives were seeking to meet the state’s chief minister this week. Kerala state is a potentially strong market for the company, with a population of 32 million and a 90.9% literacy rate – far above the national average of 68.4%.

Here is Microsoft giving unexpected gifts.

This program allows universities and colleges to get latest Microsoft software available in labs, classrooms, and on student PCs. MSDN AA is an annual membership program.The membership allows an enrolled student to take home the complete microsoft products, except products for office productivity.

Also Microsoft has offered to asist the universities to customise their carriculam and claims that the Microsoft range of products are suitable for CS and IT syllabus of Indian universities.Also Microsoft has started .Net user groups in cities like Cochin. Also Microsoft is selecting student ambassadors from various institutions and conducting programming contests.

The people of Kerala are not left alone as Microsoft sees potential business going away. These are just a few among many other examples from India (omitted for brevity)

Korea

Korea is a classic case of an entire country getting locked in because of proprietary Web ‘extensions’ such as ActiveX. This was blindly (and foolishly) accepted by too many. In case you have not come across this infamous story, here are some links:

1. Could Internet Banking be free from Window?

Nonghyup has begun to provide internet banking service for Linux users since 2006. It is possible by installing a separate middleware in the Linux PC in order to access Nonghyup internet banking site. The logic is based on the introduction of a program functioning Active X emulation into Linux OS.

2. The cost of monoculture

Korea will only get beyond this problem by 1) applying Korean laws on open standards to the certificate authorities, 2) reassigning new certificates which work with open web standards to all Koreans, 3) reprogramming all Korean websites to support 128 bit SSL which will allow for a heterogeneous marketplace of operating systems and web browsers. This is a herculean task and thus Korea stays hostage to Redmond.

Fascinating history. Unintended consequences and de-facto monopolies create costs too high to calculate and must be borne without question.

As a separate but related issue, consider incompatibilities and other issues that now prevent Koreans from approaching Windows Vista.

Korean government warns against Vista upgrade

The Ministry of Information and Communication said that it wished it could tell a private company like Microsoft to postpone the release of Vista, but it can’t. The best thing, an official said, was not to install Vista before you know what you’re getting into.

From last year (when the problems associated with Vista was barely understood): Consumers in No Hurry for Vista Upgrade

In a survey of 4,144 members of Danawa.com, a price comparison site, only 14 percent of respondents said that they will immediately upgrade to the Vista platform when Microsoft releases it on January 30.

There are some legal issues as well, e.g.:

1. Korean software firm sues Microsoft

According to Korean newspaper Chosun, the US software mammoth has been accused of causing a loss in sales revenue estimated at W30bn (US$1=W918) because the firm’s Windows operating system comes pre-loaded with a media player and instant messaging.

Seoul Central District Court confirmed yesterday that Digito was suing Microsoft in the US and Korea, claiming that the software giant had violated the Fair Trade Act since 2000.

2. Korean court rebuffs Microsoft in patents case

Microsoft has taken another slap from the authorities in Korea, after a court decision in a patent dispure raised the prospect of Office being taken off the shelves in the country. Microsoft said it was continuing to dispute the patent’s validity.

3. Is MS Overcharging Koreans for Vistas?

Microsoft’s Windows Vista program is selling in South Korea at prices up to 70 percent higher than in the United States or Japan, with Microsoft blaming Korea’s immature market for the price difference.

Japan

While we’re on the subject of lawsuits, Microsoft has its fair share of issues in Japan [Expired, from Associated Press].

A legal battle between Microsoft and Japanese anti-monopoly authorities is likely to conclude next year and might lead to lawsuits or other patent infringement complaints against the U.S. software company, an executive said Thursday.

[...]

Microsoft has been slapped with hefty fines by European Union regulators, who have said Microsoft broke competition laws and abused its dominant market position.

Singapore

With such good stories, this could be the recipe for success.

Industry players believe there is still potential for the open source movement to gain more ground in Singapore, particularly if the government gave greater support. For example, Linux has been gaining momentum in China, due in part to the government’s strong support for open source.

As expected, Microsoft creates some artificial barriers with ActiveX, making life harder for everybody (see Korea’s lesson above).

Dear Editor -

I am baffled as to why it is that those of us who want to view the 42nd National Day celebrations online have to have Microsoft Windows to do so?

I was trying to view http://www.ndp.org.sg/infocomm/livecelebration/ and it says:

“1. You may need to install ActiveX* components for viewing the
“Live Celebrations” if prompted.
* ActiveX is built on Microsoft’s Component Object Model (COM),
and is used primarily to develop interactive content for the
World Wide Web.

2. The live coverage is best viewed using Internet Explorer”

I run Firefox and use Linux exclusively. When there are plenty of totally cross platform, free and open streaming video technologies, like for example Theora (www.theora.org), it seems that the technology decision makers decided on a closed, platform-restricted and proprietary format as the way forward.

The nation as a whole recently got upset for other reasons.

Singapore is the only country to have banned the game, so far, and it is the first Microsoft video game to be banned in the city-state, The Straits Times said.

Indonesia

More recently, the Linux-based Eee PC arrived at Indonesia, but the big(ger) story in Indonesia has been quite different for a while.

A new line of low-cost mini laptop is set to hit the Indonesian market with Asus Technology Indonesia planning to introduce the Eee PC 701 next January at the latest.

Microsoft seems to have been exploited the government in Indonesia in order to create a stranglehold on the nation. Here is one of the more recent articles on this subject:

Government to Review Cooperation with Microsoft

The government will review the possibility of cooperating with PT Microsoft Indonesia in terms of software legalization process in all governmental institutions.

This is because Microsoft is currently marketing cheap software, priced at US$3 or around Rp27,000 each.

Cahyana Ahmadjayadi, Director General of Telematics Applications at the Information and Communication Department, said the review would not reduce the government’s concern regarding open source software.

The BSA makes an appearance as well. Here is its presence:

It is a decision that has, however, weathered criticism for likely giving Microsoft’s proprietary software products an unfair advantage for use in publicly funded government services, and sidelining the use of free/libre and open-source software (FLOSS), which the government has actually been encouraging through its Indonesia Goes Open Source (IGOS) program.

[...]

The Business Software Alliance (BSA), an industry lobby group of proprietary software vendors with Microsoft as its main backer, ranks Indonesia’s piracy rate at 87 percent and the world’s third highest after Vietnam and Zimbabwe.

[...]

But the validity and accuracy of BSA’s piracy ratings and studies have also come under criticism recently, from the respected business weekly The Economist, among others.

It is these concerns that has made I Made Wiryana, one of Indonesia’s noted FLOSS advocates, advise the government not to take for granted that the deal with Microsoft will benefit development of the country’s IT sector.

[...]

“We also have to consider the actual benefits from the deal’s implementation compared to the costs we will be making, when the use of open source software can also reduce piracy and save costs.”

There were some angry people who watched the government falling into this deal with Microsoft after promises of Free software adoption. The government then tried to quiet down the storm with some promises.

In spite of a deal with the U.S.-based software giant Microsoft, the government pledged Wednesday that it would continue promoting the use of open-source software.

[...]

Kusmayanto said — without mentioning Microsoft by name — that dependence on one operating system would curtail the country’s freedom to choose software most consistent with its own needs.

[...]

The deal has, however, come under fire, including from the House of Representatives, with critics arguing that it will create a monopoly for Microsoft, and undermine the government’s own IGOS program, which encourages the use of free open-source software for the public sector.

Here is another shout-out about this issue. It actually came from Sun Microsystems.

To help boost the application of open source technology, which could in turn benefit local industry, the government needs to help out with better regulations, an IT firm says.

Harry Kaligis, business and marketing general manager of Sun Microsystems Indonesia (SMI), said that although open-source firms had been given the freedom to grow, they were still often subject to “unequal treatment” by the government.

The government’s deal with Microsoft actually antagonises existing effort which brought GNU/Linux and open source software to many parts of the country. Consider for instance:

1. Open source, closed mind

It recently launched the Indonesia Goes Open-Source Nusantara 2006 package, which provides desktop software based on Linux Fedora Core 5 and with the ability to operate applications such as Open Office for text documents, Firefox for Internet browsing, Thunderbird for email and Gaim for chatting.

The ministry’s website also lists a range of open-source software material, domestic and foreign, from which material can be downloaded for free.

Furthermore, the use of open-source software cuts down on piracy, which is as prevalent in this country as the use of computers.

2. Sofyan: Open Source Hampers Government’s Activity

The Department of Research and Technology will involve eight universities as developing agents of Indonesia GO Open Source (IGOS) program. They include Bandung Institute of Technology, Sepuluh November Institute of Technology, Gadjah Mada University, University of Indonesia, Udayana University, Deli Polytechnics, Batam Polytechnics and President University.

3. Open-source system sought for SMEs, ministries

To help protect intellectual property rights and reduce costs, the State Ministry for Research and Technology is urging state institutions, and small and medium enterprises to adopt open-source software for their computers. The Information and Communications Ministry had already saved on its IT budget after deciding to migrate.

Here is another decent article from the Jakarta Post:

Mention Microsoft, and some would think of Bill Gates, the Windows computer platform and the world’s largest (and richest) software company. For a certain group of people, however, Microsoft is the embodiment of an evil empire lead by a Dark Prince, conducting questionable business practices toward maintaining its (monopolistic?) market leadership.

[...]

Perhaps what Microsoft should do as a whole is to play better with others and listen to its user base. The world and markets have changed, yet a number of companies and organizations continue to struggle to maintain their old business models. Using legal tactics instead of true technology innovation will not endear nor create loyal customers.

So, that’s the world we live in and we’ve only covered a fraction of this type of activities which exist in Asia.

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