Microsoft in China and India - Case Study
Microsoft in China and India, 1993-2007
Risks faced by Microsoft in China and impact to performance
Risks
Intellectual Property Localization
Details
Largest piracy rates in the world – 98% *Huge character sets required new versions of software *Chinese used mobiles more than the PC (can the mobile be a computing device)? *High profile revelation by Juliet Wu, former GM on commitment * Suspicion on security *Open source market * Entrepreneurship bug for Chinese software engineers *Legislation to support open source *Relationship with Chinese leader * Complex process in engaging with State Owned Enterprises
Impact to performance
*Loss of revenue from pirated software *Costly Initiatives to prevent piracy *Drive to transform China from manufacturing to knowledge economy * Low profit due to localization investment on new Chinese OS, P-Win and Fone+ *Slow growth * Forced to open Sourcecode for Windows which was against the IP practices of MS. *Reduced revenue and loss of various orders (Red Flag Linux in Beijing municipality) * No quality development workforce *Mixed fortune with deals (win in Shanghai but loss in Beijing) * Long lead time for products to reach the market
Public Relations Competition
Government
Risks faced by Microsoft in India and impact to performance
Risks
Intellectual Property Diversity of geography
Details
Massive piracy rates of 70% *Different languages and scripts. *Older generation wanted Gen-next to use English. * Lack of penetration in ITeco-system *Cost conscious people
Impact to performance
*Loss of revenue from pirated software *Loss of revenue due to lack of understanding the geography (Kashmir wrongly represented as disputed territory) * Low profit due to localization investment *Difficulty to forecast optimal price structure against product features (One size did not fit all) *Reduced revenue and loss of various orders *Longer time to penetrate into market
Pricing
Competition
*Open source market
Risks faced by Microsoft in China and impact to performance
Risks
Intellectual Property Localization
Details
Largest piracy rates in the world – 98% *Huge character sets required new versions of software *Chinese used mobiles more than the PC (can the mobile be a computing device)? *High profile revelation by Juliet Wu, former GM on commitment * Suspicion on security *Open source market * Entrepreneurship bug for Chinese software engineers *Legislation to support open source *Relationship with Chinese leader * Complex process in engaging with State Owned Enterprises
Impact to performance
*Loss of revenue from pirated software *Costly Initiatives to prevent piracy *Drive to transform China from manufacturing to knowledge economy * Low profit due to localization investment on new Chinese OS, P-Win and Fone+ *Slow growth * Forced to open Sourcecode for Windows which was against the IP practices of MS. *Reduced revenue and loss of various orders (Red Flag Linux in Beijing municipality) * No quality development workforce *Mixed fortune with deals (win in Shanghai but loss in Beijing) * Long lead time for products to reach the market
Public Relations Competition
Government
Risks faced by Microsoft in India and impact to performance
Risks
Intellectual Property Diversity of geography
Details
Massive piracy rates of 70% *Different languages and scripts. *Older generation wanted Gen-next to use English. * Lack of penetration in ITeco-system *Cost conscious people
Impact to performance
*Loss of revenue from pirated software *Loss of revenue due to lack of understanding the geography (Kashmir wrongly represented as disputed territory) * Low profit due to localization investment *Difficulty to forecast optimal price structure against product features (One size did not fit all) *Reduced revenue and loss of various orders *Longer time to penetrate into market
Pricing
Competition
*Open source market