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Ballmer: China Business Piracy A 'Real Problem'

By - Source: Tom's Hardware US | B 38 comments

79-percent of China's businesses actually used pirated software in 2009.

Friday Microsoft chief executive Steve Ballmer publicly condemned Chinese businesses that use pirated copies of Windows and other software, calling the situation a big problem.

According to estimates made by Washington-based trade group Business Software Alliance (BSA), 79-percent of China's businesses actually used pirated software in 2009. China's gross domestic product is twice that of South Korea and India's economies combined, however Microsoft claims that it makes less revenue in China than it does in the other two countries. BSA backs up those claims, estimating that the value of pirated software in China almost doubled to 7.58 billion dollars from 2005 to 2009.

Ultimately, the Chinese government's lack of protecting intellectual property is the major blame for lost software revenue.

"One of the things that has improved a lot around the world is business piracy, and yet when we look at China today business piracy is more extreme than consumer piracy," he told a business forum in Madrid. "We are working hard with the support of the Chinese government to improve the situation but it is a real problem."

Now the BSA is calling on the Chinese government to enforce businesses and government offices to use licensed software. Ballmer and 11 other chief executives have even met with U.S. lawmakers and top officials in Obama's administration in hopes to persuade them into putting pressure on Chinese officials.

The June meeting with US lawmakers and government officials came two months after Microsoft won its case against a Chinese insurance company that was running 450 copies of pirated Microsoft software.

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  • 18 Hide
    Aussie_Bear , October 9, 2010 12:45 PM
    "One of the things that has improved a lot around the world is business piracy, and yet when we look at China today business piracy is more extreme than consumer piracy," he told a business forum in Madrid. "We are working hard with the support of the Chinese government to improve the situation but it is a real problem."


    Translation? => We have made quite a bit of money from making sure that the Chinese consumers pay. But look at their business market! We haven't made sure they pay for what they use! There is a wonderful opportunity here to increase our earning potential!

    I really do wonder how Microsoft will react if the Chinese Govt enacted an open source initiative via some new Law? Anything that isn't natively available (a weakness in Linux is that there is a need for applications that are equivalent to popular commercial solutions); their Govt could establish teams of software developers to create apps to fill that gap OR even subsidize local private software companies?...Now that would seriously hurt MS! By no longer relying on them!

    nativeson8803god i can't stand the chinese and to think that we used to be stronger than them.first it was putting melanene and cardboard into baby food, dog food, and eggrolls, but now this?


    Speaking as an outside observer (Chinese who grew up in Australia), of both USA and China; I can safely say that the problem with today's USA is because of USA itself. Not because of China, Europe, or anyone else.

    Maybe if one looked in the mirror, they'll finally see what they have become in the last 60 yrs or so! Japan has exceeded your country in the auto industry not by magic...Because they followed quality principles from an American named W. Edwards Deming after WWII. Ironically, you have completely forgotten those very principles that made your country awesome! (Its only recent times, that some US-based companies are starting to pick up on it by studying Japan!)

    Today, you've become selfish, greedy, lazy, and lack integrity that you once had. Your industries believe they have some god given right to dictate rules to your own people and to the world. See both the Digital Millennium Copyright Act (DMCA) and the Anti-Counterfeiting Trade Agreement (ACTA).

    Your Govt system has become corrupted by lobbyist and filled with incompetence. This is eating America in the most painful way: Right at her heart and soul.

    The first warning sign was the Global Financial Crisis. Your businesses/banks caused that. Like a drop of water in a pond; the effects of it spread within your country and echoed throughout the World. Its a clear and obvious red flag that you folks need to change your ways by taking responsibility for your own actions. IF you choose to ignore this signpost, it will be at your future's peril.

    There is still hope for you because one of America's most powerful things, is her people's ability to innovate with quality. Have you not realised what you do affects the World? Something as simple as the electric light bulb! (Edison was the one who developed the complete system). Heck, look at the Internet! You folks created that! You shared it with the World! And the World loves it!...Russia, China, Europe, Middle-East, etc could've never come up with such a grand open network like this!

    The Chinese don't innovate. They copy and tweak other people's stuff. (Even yours! Just look at their copies of your Tomahawk and AMRAAM missiles!)...They don't have the capability to produce with high quality and provide good customer service like you can. Their strength is that they can quickly initiate large projects on-the-go.

    This is because their leadership is filled with engineers and scientists. Their people in Govt aren't there because they were voted in, or can be corrupted by lobbyists. They're there because they are the best people at what they do. If they screw-up, the punishment is harsh. (eg: Those guys who "spiked" the milk with melamine back in 2008 were executed, and the general manager of that company was given a lifetime prison sentence.)

    The problem with Western-based Govt is that you talk too much BS (hype); think and discuss for too long (lots of committees filled with clueless people?); and everyone is worried about their own hides! (ie: Where's my cut?)...Hell, look at climate change. Your Govt can't decide if the issue is legit or not! The Chinese know its real and have initiated programs to find new energy sources that are environmentally friendly. They are going serious ape over solar power!
    => http://en.wikipedia.org/wiki/Solar_power_in_China

    In sum, USA thinks its a JOKE, so it isn't fully committed as a whole country. While China sees it as the creation of JOBS, and get on with attacking the issue.

    So in 2010, you stand at a junction...

    (1) One path leads back to strength, prosperity, responsibility, and integrity.

    OR

    (2) The other path leads to a spiral downwards like many Superpowers/Empires before you.

    You as a people have a choice. So choose wisely. Your future depends on it.
Other Comments
  • -7 Hide
    dEAne , October 9, 2010 7:14 AM
    Most products is made in China, I hope most are legal too.
  • 7 Hide
    Anonymous , October 9, 2010 7:19 AM
    as expected from chinese!^_^
  • 4 Hide
    makingoneup , October 9, 2010 10:23 AM
    welcome to the free market.
  • 7 Hide
    mitch074 , October 9, 2010 10:38 AM
    As for the 'piracy' thing: Microsoft, as a tradition, let its products be pirated in a country until they have a de facto monopoly. Then, once their products are irreplaceable, they complain about piracy and IP protection - in order to strong-arm governments into enforcing their IP.

    However, piracy in China is 15 years old: right now, it's considered normal - and pretty much impossible to regulate or prevent. In fact, in whatever shop you enter, if you buy a laptop, half of them will bear a fake Windows license sticker, and all of them a pirated MS Office.

    If the police tries to force a shop not to sell pirated software, it'll simply close down, and reopen a few meter down the street - so they just don't bother.

    The only thing they can do is try to locate the manufacturers that create genuine-looking stickers, with genuine-looking DVDs - and most of them are lost in the countryside and are able to move location on a whim.

    So, they need a large scale deployment and/or force government agency to use genuine software.

    Problem is, when they tried that in the education sector in Russia, said government agency mandated the use of Linux and OpenOffice.org on all school computers.

    So, right now, they're moving air, using their trusty FUD method. With little success, if the shape of my wife's brand new laptop is any indication.
  • 1 Hide
    randomizer , October 9, 2010 10:51 AM
    Re-licence Windows under something like the BSD licence and you'll remove piracy permanently.
  • -4 Hide
    alyoshka , October 9, 2010 10:53 AM
    Basically, I really don't believe they want to stop piracy, I just have a feeling it's a money making thing, if you can't have them buy your stuff, then try blackmailing them into buying it, of frighten them into doing so.
    The Chinese government is never going to waste it's citizens money for any corporate policy.
    I'm not Chinese but I am glad that there is one government in the world that does stand up for it's citizens against all enemies literally, foreign or domestic.
    Especially against corporate policy, at the cost of it's citizens, it's not going to work. MS could be Obama himself and t still ain't gonna work :) .
    They ought to be happy with what they're making.... and not worry and crib about what they're losing, it'll make them a much more , as a company, liked and not so hated as they are now.
  • 18 Hide
    Aussie_Bear , October 9, 2010 12:45 PM
    "One of the things that has improved a lot around the world is business piracy, and yet when we look at China today business piracy is more extreme than consumer piracy," he told a business forum in Madrid. "We are working hard with the support of the Chinese government to improve the situation but it is a real problem."


    Translation? => We have made quite a bit of money from making sure that the Chinese consumers pay. But look at their business market! We haven't made sure they pay for what they use! There is a wonderful opportunity here to increase our earning potential!

    I really do wonder how Microsoft will react if the Chinese Govt enacted an open source initiative via some new Law? Anything that isn't natively available (a weakness in Linux is that there is a need for applications that are equivalent to popular commercial solutions); their Govt could establish teams of software developers to create apps to fill that gap OR even subsidize local private software companies?...Now that would seriously hurt MS! By no longer relying on them!

    nativeson8803god i can't stand the chinese and to think that we used to be stronger than them.first it was putting melanene and cardboard into baby food, dog food, and eggrolls, but now this?


    Speaking as an outside observer (Chinese who grew up in Australia), of both USA and China; I can safely say that the problem with today's USA is because of USA itself. Not because of China, Europe, or anyone else.

    Maybe if one looked in the mirror, they'll finally see what they have become in the last 60 yrs or so! Japan has exceeded your country in the auto industry not by magic...Because they followed quality principles from an American named W. Edwards Deming after WWII. Ironically, you have completely forgotten those very principles that made your country awesome! (Its only recent times, that some US-based companies are starting to pick up on it by studying Japan!)

    Today, you've become selfish, greedy, lazy, and lack integrity that you once had. Your industries believe they have some god given right to dictate rules to your own people and to the world. See both the Digital Millennium Copyright Act (DMCA) and the Anti-Counterfeiting Trade Agreement (ACTA).

    Your Govt system has become corrupted by lobbyist and filled with incompetence. This is eating America in the most painful way: Right at her heart and soul.

    The first warning sign was the Global Financial Crisis. Your businesses/banks caused that. Like a drop of water in a pond; the effects of it spread within your country and echoed throughout the World. Its a clear and obvious red flag that you folks need to change your ways by taking responsibility for your own actions. IF you choose to ignore this signpost, it will be at your future's peril.

    There is still hope for you because one of America's most powerful things, is her people's ability to innovate with quality. Have you not realised what you do affects the World? Something as simple as the electric light bulb! (Edison was the one who developed the complete system). Heck, look at the Internet! You folks created that! You shared it with the World! And the World loves it!...Russia, China, Europe, Middle-East, etc could've never come up with such a grand open network like this!

    The Chinese don't innovate. They copy and tweak other people's stuff. (Even yours! Just look at their copies of your Tomahawk and AMRAAM missiles!)...They don't have the capability to produce with high quality and provide good customer service like you can. Their strength is that they can quickly initiate large projects on-the-go.

    This is because their leadership is filled with engineers and scientists. Their people in Govt aren't there because they were voted in, or can be corrupted by lobbyists. They're there because they are the best people at what they do. If they screw-up, the punishment is harsh. (eg: Those guys who "spiked" the milk with melamine back in 2008 were executed, and the general manager of that company was given a lifetime prison sentence.)

    The problem with Western-based Govt is that you talk too much BS (hype); think and discuss for too long (lots of committees filled with clueless people?); and everyone is worried about their own hides! (ie: Where's my cut?)...Hell, look at climate change. Your Govt can't decide if the issue is legit or not! The Chinese know its real and have initiated programs to find new energy sources that are environmentally friendly. They are going serious ape over solar power!
    => http://en.wikipedia.org/wiki/Solar_power_in_China

    In sum, USA thinks its a JOKE, so it isn't fully committed as a whole country. While China sees it as the creation of JOBS, and get on with attacking the issue.

    So in 2010, you stand at a junction...

    (1) One path leads back to strength, prosperity, responsibility, and integrity.

    OR

    (2) The other path leads to a spiral downwards like many Superpowers/Empires before you.

    You as a people have a choice. So choose wisely. Your future depends on it.
  • 8 Hide
    marraco , October 9, 2010 1:04 PM
    The Chinese government has resources hugue enough to develop Linux into the best OS.
  • -1 Hide
    Anonymous , October 9, 2010 1:44 PM
    What's up with the stupid Ballmer pictures on every single article? I mean, I know he's kinda stupid anyway, but it's starting to feel a bit tendentious from Tom's. I think I've never seen a stupid Steve Jobs pic here or something...
  • 3 Hide
    Giraffemonster , October 9, 2010 2:04 PM
    lljones"...met with U.S. lawmakers and top officials in Obama's administration in hopes to persuade them into putting pressure on Chinese officials."


    Excellent points. But that's the way greed is. And later, 79% of Chinese businessmen start using Linux OS's.
  • 1 Hide
    nottheking , October 9, 2010 5:13 PM
    Wow, someone actually has the brains to give a nod toward all the piracy in China. Since, y'know, the vast majority of it (be it music, movies, games, or other software) is done there; even priced down to match what they can actually afford, the vast majority of all such digital goods there are pirated.

    lljones2. I'm having a hard time remembering who we borrowed hundreds of billions of dollars from, but I am fairly certain that we won't be putting any "pressure" on them.

    Contrary to popular belief, China doesn't own the US government. They don't even own ONE of those trillions of debt. Half of it is effectively the government owing itself.

    China owns less US government debt than Japan does now; this could be because China's afraid that if a hot showdown occurs (be it over trade, Taiwan, human rights, or North Korea) a nasty side-effect of any real conflict would be the debt be declared null and void. (by law, the US cannot recognize debts to its own enemies) If all of China's eggs were in that basket, that alone would sink their economy instantly.

    And as for Japan? Their debt-GDP ratio has gone well past 100%; it's several times as large as the USA's. So if any country is "owned," it's them.
  • 0 Hide
    Khimera2000 , October 9, 2010 5:22 PM
    I think there is greed on both sides. I mean they are pointing at companies also. I dont realy have an opinion for individuals pirating, but I do think that if your going to go make money of the softwear you better pay for it. Then again a funner way is to push for digital only, and suspend softwear trade with china till intelectual property can be protected to some significant degree.

    China is big, but without foraing partners they have no product, I have yet to see a good product come out of a china only brand... sad to say.
  • 1 Hide
    rhino13 , October 9, 2010 5:52 PM
    Wow just like a third of earth's population. I thought they'd really slip under the radar.
  • 2 Hide
    flacoman3 , October 9, 2010 7:04 PM
    alyoshkaBasically, I really don't believe they want to stop piracy, I just have a feeling it's a money making thing, if you can't have them buy your stuff, then try blackmailing them into buying it, of frighten them into doing so.The Chinese government is never going to waste it's citizens money for any corporate policy.I'm not Chinese but I am glad that there is one government in the world that does stand up for it's citizens against all enemies literally, foreign or domestic.Especially against corporate policy, at the cost of it's citizens, it's not going to work. MS could be Obama himself and t still ain't gonna work .They ought to be happy with what they're making.... and not worry and crib about what they're losing, it'll make them a much more , as a company, liked and not so hated as they are now.

    haha yea the Chinese are going to resist this move by microsoft because they are concerned for the welfare of their citizens.
  • 1 Hide
    Benihana , October 9, 2010 9:46 PM
    I like how it's always the same picture of Ballmer getting kicked in his namesakes. :) 
  • 1 Hide
    kelemvor4 , October 9, 2010 10:41 PM
    lljonesTyped with extreme sarcasm. Why don't they simply find 8 people who have downloaded pirated versions of songs/software and fine them a billion each. It would even give them a net profit and you know that they wouldn't complain about that.

    Nice going, jerk. I bet ballher already put your plan into motion.
  • -1 Hide
    theshonen8899 , October 10, 2010 12:18 AM
    Oh no. Another outrageously wealthy person condemns piracy for not getting them more money. Now all the software engineers will starve. And by starve I mean not buy a Ferrari.
  • 2 Hide
    g00ey , October 10, 2010 1:15 AM
    Yeah, let's hope that this will create some very strong incentives in China to make computer games and applications run very well on Linux (even better than on Wine) so that we can get rid of the plague once and for all...
  • 0 Hide
    Anonymous , October 10, 2010 6:17 AM
    There's a video of MS talking about how their strategy in China was to get them to pirate Windows in the 90s...so...
  • 0 Hide
    Anonymous , October 10, 2010 6:28 AM
    Quote:
    There's a video of MS talking about how their strategy in China was to get them to pirate Windows in the 90s...so...



    They did the same all over the world. Who do you think bought those $30 books on using Windows, Word , Excel ? Many of them published by Microsoft. Obviously quite a few who hadn't got the original manuals.

    Even to companies with networks, Microsoft were distributing 100 CDs of Win95 with every 100 computers sold. 99 of them ended up in dumpsters for anyone to use.

    Now they've achieved near monopoly, they crank up the price of Windows and pester legal users who dare to change their hardware, just in case they have two computers running one copy of Windows.

    And when the world realises that there are no further advances to be achieved in word processing, MS try to foist DOCX on us so that unless you upgrade you won't be able to read attached documents. My response to any DOCX I receive is to write back to the sender saying there's something wrong with their document and it's unreadable. Please save as a proper Word doc and resend.


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