Chapter 752 – Win-win situation
Bill Gates went silent again. Microsoft was facing multiple anti-trust lawsuits since last July. They were sued by many corporations and had to change their business conducts.
Microsoft had made use of their status as the leader of the operating system and demanded the hardware manufacturers pay them usage fees of their operating systems, even when the PC was not using Microsoft operating systems!
This shows how overbearing Microsoft was. It was also because of this demand, the US government intervene, and Microsoft share prices fell at that time.
Apple had also been suing Microsoft for infringing its patents. The boss of Apple currently was still not Steve Jobs.
Microsoft had its hands tied in the US and was desperately in need to venture overseas and open up a new market. They need to secure their position as the market leader and to prevent Apple and other companies from taking away the market share.
There were other companies that produces operating systems. Apple’s operating system was also prevalent. There were many other companies in Europe and Asia competing with Microsoft. For instance, India has its own operating systems and was able to keep Microsoft from entering the India market.
Chinese’s innovation was also world-renowned. Who knows when the Chinese will set up a company and developed their own operating system. This will lower the chances of Microsoft from entering the Chinese market.
Basically, time was a critical factor. Feng Yu was telling Bill Gates that the longer he delays, the more disadvantages Microsoft have.
Also, Feng Yu had hinted that he can block Microsoft from entering China.
Feng Yu was not boasting. He could just go to the top leaders in the Central Government and suggest to them to develop China’s own operating systems. Then there will be a high possibility for China to block Microsoft.
In Feng Yu’s previous life, although Microsoft’s operating system was commonly used, the Chinese governments and many state-owned enterprises still use their own unique operating systems. These operating systems were developed by Chinese companies.
Also, there will be the issue of internet security. In Feng Yu’s previous life, Lenovo bought IBM, and the US government stopped its governments from procuring IBM products. Although IBM products were cheaper, the US government dare not to use them. They were afraid of hidden backdoor programs that would compromise security.
This was the same for the Chinese Government. Why did not choose Lenovo PC instead of other cheaper PCs? It was because of security issues.
Of course, these reasons were not able to stop Microsoft from entering the Chinese market. How did Microsoft become popular in the Chinese market in Feng Yu’s previous life? By suing Kingsoft for cracking and using Microsoft operating system’s codes.
At that time, many Chinese companies and individuals, including the government, were using pirated Microsoft software. Microsoft chose to ignore them, and when the Chinese were used to using the pirated software and caused the collapse of other software companies, Microsoft sued Kingsoft. Microsoft then took over the whole Chinese market and did not have any more competitors in China!
This strategy had let Microsoft suffer massive loss of profits, but that was their last resort. Now, if Bill Gates agree to Feng Yu’s conditions, Microsoft will be able to introduce their original software in China and would still be able to get high returns. This was critical for Microsoft’s development.
“Feng, I need to discuss with the others about this. Let’s talk about the special rates of our operating systems in China. How much do you want?” Bill Gates continued asking.
“The whole set of the operating system, including Win95 and Office. Of course, we will also install IE in all our PC. This will help to promote Microsoft in China. Hmmm…… 100 RMB for the whole package and include free upgrade services.”
“100 RMB? How much is that in USD?” Bill Gates had an uneasy feeling. He remembered that RMB was very low against the USD.
“About 12 USD.” Feng Yu replied casually.
“What? 12 USD?! Impossible! The usage fees for our systems are more than 12 USD. Win95 cost at least 100 USD. You are only giving us less than 10%, and still wanted a package consisting of other software?! How is this possible?”
This was a ridiculous rate. Bill Gates will never agree to this!
“Bill, let me remind you. If you cooperate with Lenovo, you will still be able to make money. After all, after your system is developed, you will be able to earn from every PC installed with it. If no one uses the Microsoft operating system, you will not be able to earn a single cent.”
“How is it possible? Our operating system is the best.”
“There are still a lot of companies producing operating systems. In China, there are also a lot of companies developing software and operating systems. If those companies work together and develop a Chinese language operating system, then Microsoft will lose the Chinese market totally.”
“You all do not have such good programmers.” Bill Gates confidently replied.
Microsoft was successful because they had the best programmers and engineers working for them. This was the reason why it was way ahead of its competitors.
“But I have money. Microsoft engineers are also poached from other companies using high salaries? I don’t need to poach your core programmers and engineers. I only need to poach those programmers who know Chinese. What do you think?” Feng Yu smiled and asked.
Threat! Feng Yu was threatening him! Bill Gates was pissed, but he can’t find the words to retort. Feng Yu was able to do that with his money. Just his Microsoft shares were worth a lot of money.
Furthermore, this Feng Yu must have some relationship with the Chinese government. No matter how powerful Microsoft was, it can’t compete with a government!
“But the rates you demand is too low.”
“I also have no choice. China’s economy is still developing. The Chinese are not willing to spend on expensive items. You have not seen pirated versions of your systems and software in other countries? If you set the same rates as the US in China, I dare to guarantee that the pirated version of your operating systems and software will prevent Microsoft from selling your original versions in China.”
This was what happened in Feng Yu’s previous life. Although Microsoft had signed contracts with many PC manufacturers, there was still a type of PC called self-assemble PC!
Self-assembled PC does not have software and operating system. It was popular because it was much cheaper than those branded PC. For the same specs, self-assembled PC was 50% less expensive than those off the shelf PC! Pirated versions of operating systems will be installed in those self-assembled PC, and the users will not need to spend a single cent. This was why Microsoft systems were selling much cheaper in China compared to the US in the end.
“I need to consider about this and cannot give you an answer immediately. Also, I need to tell you that the board of directors will not approve this price!” Bill Gates said.
Feng Yu laughed. “You are the Chairman of the board, right? You have the final say. I hope to get a reply from you as soon as possible. Let’s make Microsoft success in China!”