Gates may find it's better to be red than dead

Should the Microsoft chairman be using communist as a derogatory term when his company is bending over backwards to court the world's biggest communist super-state?

During a pre-CES show interview with our sister site News.com, Bill Gates was asked about his views on attempts to limit intellectual property rights and patents, which campaigners claim are often used by large companies to bully smaller ones.

His response was to compare those who seek to curb the excesses of IPR and patents as "new modern-day sort of communists who want to get rid of the incentive for musicians and moviemakers and software makers under various guises". After this sloppy piece of reasoning, which would not stand up to even a cursory piece of Marxist analysis, Gates went on to point out that fortunately "there are fewer communists in the world today than there were".

That Bill Gates doesn't like communists is not exactly a surprising revelation given his fiercely capitalist pedigree. But what is interesting is that the comments come at a time when Microsoft and the rest of the IT industry are bending over backwards to court the world's biggest communist super-state.

China is enormously important to IT vendors at the moment, regardless of its questionable human rights record. While sales of hardware and software remain flat in North America and Western Europe, China's IT sector remains one of the world's bright spots, growing by 20 percent a year. Software sales should hit $30.5bn (£16.7bn) this year, according to analyst IDC. Some analysts claim IBM selling its PC division to Chinese firm Lenovo was actually all about Big Blue buying a significant stake in the Chinese market rather than the falling margins in the PC business.

So why is Bill risking Beijing's wrath if China is such an important market at the moment? Well, it seems Microsoft is rapidly becoming persona non grata in China anyway so a few anti-red comments probably won't make much difference. In December last year authorities in Beijing rejected a supposedly done and dusted deal with Microsoft worth around $3.6m after an official from the Chinese Science and Technology Ministry called the agreement a threat to national security.

At the time it was rumoured that other government offices would follow suit and turn their back on Redmond in favour of home-grown alternatives such as Asianux. That rumour has now become fact following the planned introduction of a new policy at the end of this year by China's governing body, the State Council, which will require all government ministries to only buy locally produced software at the next upgrade cycle.

What Microsoft can do to win friends and influence people in China isn't clear -- allowing government officials to inspect the Windows source code and appointing Timothy Chen as chief executive for Microsoft's greater China region doesn't seem to have done much for the cause.

What is certain is that China is the most important developing market in the world. Not getting a significant slice of it may not damage Microsoft now but five or 10 years on it could cost the company dearly. After all, 1.3 billion people can't be wrong.

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