Silicon Hutong

China and the Salvation of Windows XP

Pacific Century Starbucks, Beijing
Dust in the wind
1343 hrs.

Galen Gruman at IDG publication InfoWorld has done the technology industries a community service, building a petition signed by 100,000 computing industry professionals imploring Microsoft to continue selling Windows XP after June 30, the date Microsoft plans to remove the older version of its personal computer operating system from the shelves. Getting 100,000 IT professionals to do anything together without the incentive of a free t-shirt, free software, or an opportunity to meet females is quite a trick, so IDG's survey is an illustration of how emotional this issue has become for those of us not using some flavor of Linux or Mac OSX (our favs here in the Hutong).

At least, it is an illustration of how emotional this has become outside of China.

While I am certain Microsoft CEO Steve Ballmer would say that the (relative) lack of uproar in China about the impending forced-march upgrade to Vista is due to the fact that Vista is the most loved OS in China's history, I beg to differ.

I would say piracy is the reason for the silence.

Jack Sparrow, Vista Killer

People are somewhat less worried about the availability of Windows XP in China because they know that XP will be available here for as long as anyone wants, and for a very small price. (Without Microsoft support, certainly, but available.)

Microsoft has made tremendous progress against piracy in China over the past several years. The problem is far from beaten, but the company has more than doubled the percentage of people paying for their Microsoft software.

But by taking Windows off the shelves, Microsoft appears to be creating a perverse incentive for people who might otherwise buy legitimate software to resort to piracy. Indeed, Microsoft appears to be creating the ideal conditions for a thriving market in illicit copies of Windows XP after June 30, and not just in China.

Certainly, Chinese users who prefer Windows XP to Vista will have few compunctions about turning to one of the thousands of enterprising vendors to be found on our city streets for a budget-priced DVD if they cannot find it in legitimate places, like Federal Software or on the hard drive of their new computer.

But it won't stop there. Microsoft is almost inviting China to play a leading role in the global anti-Vista backlash. Imagine, if you will, hundreds, even thousands of visitors passing through China during the Olympics, picking up a copy or two of XP to take home.

Imagine IT consultants all around the world continuing to install those copies of Windows XP in new computers - for a service fee.

Imagine computer dealers and manufacturers offering (nudge nudge, wink wink) to install XP in the new computers as an option. It will certainly happen here in China.

Imagine a thriving online marketplace in downloads of Windows XP.

It will happen. Commerce, like love, will always find a way.

What Microsoft would kill, pirates will revive - and sustain.

Inviting a Challenge

In fact, the issue is already causing many people here in China to wonder whether there is a legitimate principle (under fair use or some similar legal tenet) that wokuld support enterprising merchants who wish to sell - or give away - copies of a software product for which there is a continued, legitimate demand after the manufacturer has removed it from sale.

We in the Hutong are no fans of IP pirates, nor are we particularly fond of people who break any law because compliance is inconvenient. We remain firm believers that creators of intellectual property have the right to be rewarded for their efforts. We believe that if you disagree with intellectual property (IP) law, the proper response is not to ignore the law, but to change the law or challenge its underlying principles.

By pulling XP from the shelves when people still want to buy it or use it merely to compel people to spend more money on (what they believe to be) an inferior product, Microsoft may be opening a legal can of tubular invertebrates, if not in the U.S., certainly in China.

The root of legislation is perception, and the perception that Microsoft may be taking advantage of intellectual property laws to hold users over a barrel may be just enough to incite a legal challenge in China not only to Microsoft, but to the core of the relatively young body of law protecting the rights of software companies.

The logical principle is this: if Microsoft stops selling an IP-based and there is still a market, could a case be made that Microsoft has abandoned the product, and that the law should allow for someone else to sell it?

Even Galen Gruman, no man's idea of a socialist, suggests in his InfoWorld article that the very ubiquity of Windows has made it a public good supplied by a private entity, thus subject not to the normal system of rules regulating commerce, but to those principles that govern utilities like the power grid, phone service, and air transport. Galen's implication is that the Windows case calls for a suspension of normal rules, if not direct government intervention.

Policy makers in China, who have long watched Microsoft's growing power with consternation, will likely at some point join their counterparts in the European Union as activist watchdogs over Redmond's global business practices. Stung by what they see as the America's overenthusiastic use of intellectual property law to protect its creative an innovative companies, the Windows XP issue may well provide the high ground for China to take a stand against a flawed body of intellectual property laws imposed on China by its WTO accession.

That's a slippery slope.

Thinking Beyond Vista

No doubt Microsoft wants Vista to succeed. What worries me is that the company's leaders may well have convinced themselves that Vista must succeed for the company to survive.

It is time for Microsoft's leadership to take a step back and ask themselves if killing XP to save Vista isn't a step too far, and to recognize that the unintended consequences of their efforts could have a far more deleterious long-term effect on the company's prospects than would the failure of Vista (and the continued success of XP).

Solving the cc: Conundrum

In the Hutong
Contemplating my iTunes account
1933 hrs.

Talking with Tay Kuan Yan over at Hoffman Singapore the other day got me thinking about how lazy people are with e-mail.

Instead of really thinking about who needs to see what, most of us simply pile on the names in the To: and especially the CC: fields, hoping to ensure that everyone who needs to see the thing - or who eventually may wish to see the message and its contents - gets a copy.

On the receiving end, not only does this mean having to slog through an interminable list of emails that people send to you just to cover their posteriors, it also means that you are expected to be responsible for the entire content, even if it was just sent as an FYI.

People and corporate politics such as they are, we have to wake up to the fact that the CC list will be the bane of most of our lives for some time to come.

There is, however, a way to make all of this a little better:

Tags.

The problem is that the "To" and "CC" fields don't convey enough information. E-mails have to be rethought to convey at a glance not only the importance the sender assigns to the message, but what he expects in response.

Sure, you could say "gee, Dave, why couldn't you simply include this information in the body of the text?" Sure you could. But that's cumbersome, and it underestimates the power of the tools we have in our hands today.

That's why I like the idea of tags that are specific to each recipient, and are simple to choose from.

An open system of email tagging, similar to the priority/urgency tags that come through, that tell each person receiving an email how much attention he needs to pay to this. Each time you add a person's name, you simply select from a pop-up menu of options such as "For your action," "read and be aware," "for your records," "keeping you in the loop," and other definable tags of that nature. In that way, each person knows how you expect him or her to handle the email.

The other approach would be to add additional address fields, but that would make the header of the mails extremely complicated and larger than they already are.

Anyone who takes on that idea would be a huge help to those of us who run our working lives - and our businesses - via email.

eKarma: Have a little Virus, Pirates

Third Ring Road East
Breathing deep the inversion layer
1022 hrs.

Steven Schwankert of Village Grouch fame wrote an excellent piece for IDG (picked up here in The Washington Post) describing how Chinese fans seeking to download illegal copies of Ang Lee's excellent film "Lust, Caution" are finding on their hard drives not a copy of the film, but with software that pops a nasty little trojan virus into their systems.

There are several interesting aspects to this story.

Virus? What Virus?

First, it was apparently found and addressed by Kaspersky Lab and Rising Software well before it came up on the collective radar screens of Symantec, McAfee, and TrendMicro. One wonders why this is the case, particularly given that Symantec and McAfee tout the value of their software in part based on their global scanning for viral threats. I am especially concerned about TrendMicro, who have a huge presence in China and who make a great deal about their expertise as an "Asian" security company.

It also suggests that the malware threat in China is growing and diversifying. From dorm rooms filled with budding software engineers, to the challenges facing the country's law enforcement teams, to the quiet but rapid growth of China's cyberwar military-industrial complex, the country has become as much a haven and spawning ground for creators and distributors of Malware as the United States or any other country. This would seem to argue for greater investment by the computer security vendors in local labs who can not only find but anticipate new threats.

As an aside, it would also seem that companies like Symantec are destined to become major defense contractors. But we digress.

The Empire Strikes Back

Second, it seems that Hollywood (including the music and TV people as well as the film side of the business) and the software industry may have inadvertently discovered a way to slow online piracy and perhaps even the growth of downloaded content. All the studios - or, better yet, the MPA and the Business Software Alliance - need to do is hire a few good hackers to come up with some particularly nasty viruses and spread them around online disguised as illegitimate digital copies of random applications, movies, and music files.

Sure, the viruses would not deter the most determined or careful downloaders, and the anti-virus companies would inevitably come up with fixes. But imagine, for a moment, the fear, uncertainty, and doubt this would wreak among the less-expert. The mere possibility that these files would include viruses would be enough to drive a lot of marginal downloaders away from illegitimate downloading (and probably a few away from legit downloads as well).

Naturally I would expect clearer heads in the PR and legal departments of these organizations to prevail, ensuring that neither Hollywood nor the software industry would ever actually subsidize - or even publicly condone such practices. But you can easily imagine how such an option must tempt some people in places like Redmond and in the Black Tower.

Indeed, if the matter of digital rights management has proven anything, it has proven that Hollywood and many large software concerns believe that extremism in the defense of intellectual property is no vice, and that goodwill is readily sacrificed in that battle. If anything will keep hackers from high-powered lunches at the Ivy or the Fulton Fish market, it is the fear of court costs.

Nonetheless, it is fascinating, if not a bit disconcerting, to think that there is a commonality of interest between the creators of malware and the creators of movies.

Engineer, Engage the FUD Pump

What I do expect is that the IPR-driven industries will kick into gear a semi-coordinated propaganda effort to ensure that stories like the "Lust, Caution" become as widely known as possible, so that the threat is seen as being far larger and more serious than it really is. This costs them little, supports their goals magnificently, and enables the studios and developers to position themselves as defenders of the public interest.

Which, frankly, is the smarter way to handle it. You steal, you pay. Or, you pay, we protect.

For all the failings implicit in Hollywood's approaches to the IPR issue and digital entertainment, let's not lose sight of the most important fact - downloading illegal files is theft, theft is wrong, and anyone who does so willfully probably deserves a hard drive filled with malware.

Windows and Hoops

In the Hutong
Slowly decompressing
1456 hrs.

As Tim Chen makes his move from the leadership of Microsoft China to his new chair running the NBA here in the PRC, everyone seems to be asking two things: how badly will this damage Microsoft, and why is Tim doing this?

To answer the first question, you have to look at why he was brought into Microsoft in the first place.

The People Artist

When Mr. Chen arrived at Microsoft four years ago, the company faced challenges on all fronts. They were seen as distant and arrogant by consumers and the channel, all of whom ; manufacturers resented the company and brazenly shipped computers loaded with pirated copies of Windows; the government was making noise about Microsoft's perceived monopoly and was openly supporting Linux and other free and open source software; the company was getting no credit for its research and development efforts in the PRC; and, to make things worse, relations between Microsoft's own people in Redmond and Beijing were hardly optimal, fraught by misunderstandings on both sides.

Certainly from an outsider's point of view, all of these things were getting worse - so much so, in fact, that many of us wondered if Mr. Chen had taken leave of his senses by leaving the rapidly-recovering Motorola to go to work for a sinking ship.

As it turned out, the move was a good one for all involved. The company's own press release suggests how things are getting better, but there is more to the story than Microsoft is giving away.

(Note, before I go on, that I am not what you would call a Microsoft fanboy, nor do I consider myself a particular Friend of Tim's. I'm speaking with an outsiders perspective here.)

Turning a Corner

In the space of four years, Mr. Chen ensured that the company reversed its slide with all of its critical audiences, not by micromanaging, but by catalyzing change in each problem area through personal attention and careful appointments of key managers.

Across China, the company began rebuilding its reputation with consumers, enlisting deeper support among the channel, getting key manufacturers to begin paying for pre-installed copies of Windows, reinvigorating its relationships with government across all portfolios and all levels, and making significant progress in its fight against piracy. The government's outspoken efforts to drive the adoption of Linux have faded, and the company is getting more credit for its R&D.

Internally, Mr. Chen pulled the company together by installing experienced, China-savvy leadership in each department. He built a bridge between Redmond and the "sub" in Beijing through increased contacts and an all-out effort to educate headquarters in the challenges - and opportunities - the company faced in China, while at the same time proffering solutions rather than making excuses.

After Tim

To credit Mr. Chen alone with all of the improvements in Microsoft's fortunes in China over the last four years may be stretching the point. But as my father was fond of pointing out, a fish stinks from the head. At the very least, Mr. Chen was a critical agent of change, applying effort and attention in those places where he saw that properly-applied effort would help turn specific problems around.

What he left behind was a company heading in a far different direction here than it was when he found it, with the people and systems in place to continue that momentum. Assuming Microsoft can choose a successor (whom, for the moment, remains The Player to be Named Later) with a vision that will ensure Microsoft continues to address its problems and grab its opportunities in China, the company's future in the PRC looks bright indeed.

After Microsoft

By all rights, Mr. Chen's efforts at Microsoft should have won him greater rewards and opportunities inside the company. In all likelihood, that was not in the cards. Growth for Microsoft is now a matter of adding and acquiring new businesses, and the company's senior leadership is fairly set in place. Mr. Chen's growth opportunities at Microsoft would probably have been largely limited to growing the China business incrementally. That's not a bad opportunity, but it's probably not the sort of thing to keep a guy with solid entrepreneurial/intrapreneurial instincts happy for long. Having to fly economy class on trans-Pacific business trips probably didn't help.

The NBA makes great sense. While people closer to Tim than I have joked that he was making the change to get Olympics tickets, my bet is that he is even more excited by the scope and depth of opportunity open to the NBA in China specifically and Asia generally:

• First, the NBA is seriously ramping up current activities, and they go way beyond player recruitment, licensing, and the occasional exhibition game. The NBA China Games, NBA Madness, NBA FIT Camp, Jr. NBA, and the NBA Cares Tour, plus all of the work with the Olympics, Special Olympics, and Paralympics should keep Mr. Chen busy for a bit.

• Care and feeding of sponsors like Haier (the official HDTV of the NBA), Lenovo, (the official PC Partner of the NBA), DHL Express (the offical Logistics Partner of the NBA in the Asia Pacific region) will be important, as will cultivating new sponsors the NBA wants and needs for its broadcasts and live activities in the region.

• Deeper licensing opportunities, extending past the NBA to include teams and individual players, would benefit greatly from someone like Tim with his experience fighting IPR violations.

• There are a host of unspoken opportunities implicit in cloning the NBA in China. The NBA's partnership with the Chinese Basketball Association has a lot of room to grow.

Plus, let's face it: the NBA is more than sports, it's show business. Hopefully, Mr. Chen will have a lot of fun.

Congratulations, Tim.

Gates Blows Out Windows for Kids

In the Hutong
Growing sores on my tuchas
2114 hrs.

Apparently deciding that getting $3 per computer in schools was better than nothing, Bill Gates announced in Beijing last week that Microsoft would sell a version of Windows called Microsoft Student Innovation Suite at said price to government customers buying Windows-based PCs to primary and secondary school students.

The timing was more interesting than people think, and had nothing to do with his trip out this way.

See, at the same time Gates was announcing his 99% discount on Windows for schools, Canonical software was launching and offering for free the newest version of the company's extremely-user-friendly version of Linux, Ubuntu 7.04 (Feisty Fawn to its friends.)

Now, I've extolled the virtues of Ubuntu 6 as a better alternative to Windows XP. By all accounts (I haven't been able to get my hands on a copy yet), Ubuntu 7 is a leap forward in ease of use, to the point where many people - myself included - would never think of going back to Windows.

Whether the guys in Redmond admit it or not, in countries around the world where large chunks of the population live on $1 a day or less, Ubuntu is in a great position to squeeze Windows out of some pretty lucrative markets. Bill's $3 gambit is not about stopping piracy. If it were, he'd make the deal more broadly available. Bill's $3 gambit is about stopping Ubuntu.

Which of course, is free (as in "free beer," and "free disks mailed to your home or office"), and comes with all kinds of excellent software. I can say now with conviction that if I were ever to be forced to give up Mac OSX, Ubuntu can do anything I need to get done.

Let the battle begin.