MicroSoft in China – Massive Schlimazel

Miscrosoft 8 Banned from Government Computers in a Surprise Announcement

According to every Yiddish speaking grandmother in the world, there are two kinds of fools  – schlemiels and schlimazels   The schlemiel walks into a busy restaurant and bangs smack into a waiter carrying a tray of hot soup, dumping it all onto a customer sitting nearby.  The schlimazel is the guy that gets dumped on.

10 China Negotiating Mistakes - Buy the eBook on Kindle
Mistake #4: Losing control of the agenda. Mistake #5: Training your own competition. Mistake #10 : Forgetting that it’s only guanxi until you get caught

Bill Gates of Microsoft is the schlimazel.

(Reuters) – China has banned government use of Windows 8, Microsoft Corp’s latest operating system, a blow to a U.S. technology company that has long struggled with sales in the country. http://www.reuters.com/article/2014/05/20/us-microsoft-china-idUSBREA4J07Q20140520

When Bill Gates was running the day to day at Microsoft, the software firm was the poster-child for win-win, guanxi-building, long-term planning vis-à-vis China.  Steve Ballmer was known for his apoplectic rants against China’s widespread and pervasive counterfeiting and IP theft, but Boss Bill had become equally famous for his commitment to building strong ties and long term relations.  He established  R&D centers, set up charitable ventures (including a high-profile philanthropy tour with Warren Buffet), and built the kind of personal relationships with Chinese leaders that Western negotiators are routinely lectured about.   Gates and Microsoft were the “Gallant”  to Sergey Brin and Google’s “Goofus” – Bill and Microsoft were even the subject of a gushy bio – Guanxi (The Art of Relationships): Microsoft, China, and Bill Gates’s Plan to Win the Road Ahead

And though controversial and expensive, Gate’s long-term strategy has paid off handsomely for… no one (unless you count the hypothetical Chinese software engineers who are being exhorted to develop a new Chinese OS that will replace Microsoft.)  The Chinese government banned Microsoft’s flagship suite of products- Windows 8, shortly after the software firm pulled the plug on the XP operating system that many Chinese users (both in and out of the government) preferred.

There is speculation a Microsoft was caught up in the latest wave of tit-for-tat security measures going on between Beijing and Washington.  The software firm was apparently taken completely surprised by the announcement, or they would have issued a statement.

The takeaway  here will be familiar to regular ChinaSolved readers:  in China you should  never give away real assets now for the vague possibility of long term gain in the future.

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