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).


About David Wolf

An adviser to corporations and organizations on strategy, communications, and public affairs, David Wolf has been working and living in Beijing since 1995, and now divides his time between China and California. He also serves as a policy and industry analyst focused on innovative and creative industries, a futurist, and an amateur historian.
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