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April 12, 2006

Another Chinese OEM takes the pledge with Microsoft

Posted by David Hunter at 8:03 PM ET.

As we mentioned previously, there’s a big dog and pony show going on preceding the visit of People’s Republic of China President Hu Jintao to the USA next week and Microsoft is doing its part by signing agreements with big Chinese OEM’s. Today there was yet another one:

Founder Technology Group Corp., one of China’s largest PC makers, today signed a genuine Windows® cooperative engagement agreement with Microsoft Corp. According to the agreement, the two companies will collaborate on joint marketing, sales and training programs to promote the use of genuine versions of Microsoft® software on Founder-branded personal computer products for the Chinese market. This agreement further demonstrates the strong commitment and significant progress the two companies have made toward protecting intellectual property rights (IPR) and delivering a more secure, stable computing environment for their customers.

Founder senior executives including Wei Xin, chairman of Founder Group, Founder Technology’s parent company, and Qi Dongfeng, president of Founder Technology, attended a signing ceremony at Microsoft’s headquarters in Redmond, Wash., today.

“Founder is committed to delivering greater benefit, enhanced security and peace of mind to our users by ensuring that our product lines are installed with genuine software,” Qi said. “Founder will purchase licenses of Simplified Chinese versions of Windows worth $250 million over the next three years. The agreement we signed today with Microsoft broadens our industry-leading position and demonstrates our ongoing efforts to protect intellectual property rights in the Chinese market.”

In 2005, Founder sold 2.5 million PCs, solidifying its market position as China’s second-largest PC maker.

Hmm, $250/(3 x 2.5) = $33 per PC. Maybe it is more than a PR stunt.

Update: Todd Bishop points out the spectre at the feast via Ingrid Marson’s CNET article, “The business of Linux in China:”

At LinuxWorld in Boston last week, a Chinese government-sponsored organization enthusiastically handed out bags emblazoned with “Beijing: Asia’s Linux Capital.”

The contingent of Chinese companies at the conference was so strong that LinuxWorld held a special “Linux in Beijing” day, where different companies discussed how to boost the use of Linux on servers, desktops and mobile devices.

It’s a sign of a changing landscape for open source in China. While the government has publicly voiced support for open source and has funded a number of initiatives, there have been few large-scale migrations to the software in the government sector. This is expected to change, however, now that the Chinese government has mandated the use of locally produced software in its departments. In addition, its agencies must replace unlicensed copies of Microsoft software, now that China has joined the World Trade Organization.

Filed under General Business, Governmental Relations, Legal, Licensing, Linux, Microsoft, Open Source, Piracy

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3 Responses to “Another Chinese OEM takes the pledge with Microsoft”

  1. PRC President to dine at Gates mansion -- Microsoft News Tracker Says:

    [...] We’ve mentioned the three Chinese OEMs who have already signed up previously ([1], [2], [3]) and Lenovo rounds out the set nicely. The real question is what, if anything, the individual parties gave up to do these deals and whether it will have any material effect on Microsoft OEM revenues in China. Filed under Executives, Bill Gates, Legal, Governmental Relations, General Business, Licensing, Piracy, Public Relations, Microsoft Listen to this article   [Permalink] [...]

  2. Microsoft and Lenovo renew vows -- Microsoft News Tracker Says:

    [...] So while there are more Lenovo factory installs for the Chinese market, the bulk of the bucks are for other geographies and certainly include the business-as-usual Microsoft installs for the IBM PC business which Lenovo acquired last year. The net is don’t automatically add $1.2B to the Microsoft gross. Update: At John Dvorak’s blog, Eideard notices a Shanghai Daily article which indicates that Lenovo is paying Microsoft $37 per copy of Windows. That doesn’t seem out of line with the very rough estimate I made the other day for Founder, another Chinese OEM. As always it depends on the version mix and how many PCs will have Windows instead of an alternative. Filed under Coopetition, Legal, Governmental Relations, General Business, Licensing, Piracy, Financial, Public Relations, Microsoft, Lenovo Listen to this article   [Permalink] [...]

  3. Looking for the money in Vista -- Microsoft News Tracker Says:

    [...] The piracy reduction effort is a long hard slog, but Microsoft keeps working at it and in the difficult area of relationships with developing countries made progress in just the last few weeks with China ([1], [2], [3]). Specific to Vista, Ina Fried reported at CNET that without authentication of a genuine license, Vista won’t display the fancy new Aero Glass graphical user experience, arguably the biggest new feature. So there’s hope there and perhaps a gain of a few percent in Windows revenues from all of the anti-piracy efforts including Vista features. [...]

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