Microsoft hiring 1,000 workers in China to combat piracy

A Microsoft executive has announced the company will hire 1,000 additional workers in China, adding to its current total of 4,500 employees in the country. The move is being made to increase the company's sales of software in a market where illegal software sales far outpace the amount of legal software purchases.

Reuters reports that Microsoft's Ralph Haupter, the CEO for the company's China operations, made the announcement at a press conference earlier today. Haupter said the impending hires are part of a sales and marketing initiative the company is undertaking to reach customers in China's public sector, such as local governments. BusinessWeek reports the upcoming hires will take place during the course of the next year.

In addition to the hiring announcement, Microsoft also announced the company will increase its funding for research in the country by 15 percent. Microsoft currently spends $500 million on research in the country, meaning it will add $75 million for research in the upcoming year.

Microsoft's failed to obtain much of a foothold in China because of intellectual property infringement. CEO Steve Ballmer cited the problem during a trip to the country earlier this year, saying intellectual property rights in China were "weak." BusinessWeek's report cited figures from the Business Software Alliance claiming China's illegal software market is worth more than $9 billion, whereas its market for legal software is worth less than $3 billion. Despite this issue, China remains the largest market for personal computers and mobile phones.

Source: Reuters, BusinessWeek | Image via Microsoft

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9 Comments

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The only way to control piracy in China is low, low prices. Maybe Windows 8 Chinese edition is a start to this. Yes, piracy occurs in China, but the bulk of pirated software comes from China and goes into other markets such as Europe and US. Geo blocking software for China is the right start. So, it won't activate at all, whether you try crack or not. Another way you can could reduce it is by utility computing. Yes, licensing software is already a form of renting, but why not let the user pay to use what they need, when they need? So, you could pay $1 a month to use Windows or $2 for Windows and Office. The value here is, the user subscribes, use it when they feel like it and if they want to skip a few months, fine. The key thing is, you can have a paying subscriber for life, multiple that 500 million computer users in China and you have some really healthy revenues coming in. They also get upgraded to the latest if they wish.

If they really want to stop piracy, they should change the way Windows is activated. Instead of a serial key being included in the box, etc, have the key printed on a receipt. Only licensed retailers/resellers would be able to print this key. When one is sold, it authorizes the key on Microsoft's servers. If it's returned, it deactivates it on their servers and the client install. This changes dealing with piracy from the user end to the retailer end. If they screw up, they can no longer sell anything Microsoft related.

nesl247 said,
If they really want to stop piracy, they should change the way Windows is activated. Instead of a serial key being included in the box, etc, have the key printed on a receipt. Only licensed retailers/resellers would be able to print this key. When one is sold, it authorizes the key on Microsoft's servers. If it's returned, it deactivates it on their servers and the client install. This changes dealing with piracy from the user end to the retailer end. If they screw up, they can no longer sell anything Microsoft related.

This would not work dew to the fact that the pirated copies are cracked and don't require a key.

nesl247 said,
If they really want to stop piracy, they should change the way Windows is activated. Instead of a serial key being included in the box, etc, have the key printed on a receipt. Only licensed retailers/resellers would be able to print this key. When one is sold, it authorizes the key on Microsoft's servers. If it's returned, it deactivates it on their servers and the client install. This changes dealing with piracy from the user end to the retailer end. If they screw up, they can no longer sell anything Microsoft related.

Believe it or not, that's not too far off how the OEM activation in windows 8 actually works. Still, as the other commenter has stated, it's a bit of a non-issue as once its cracked, it doesn't matter how activations were done.

nesl247 said,

-comment-

Yeah...then a crack to stop connection to the server or "emulate" the server to make it "think" it is activated would be released. There really is no way to win.

Other than employing some more people, trying to stop piracy in China is probably the most pointless endeavour that they could undertake.

Hum said,
So the 1000 might stop 10000 -- not going to make much difference.

Put another way (to use your numbers), each employee is going stop 10 cases of piracy.

Either the software is expensive, or those employees are paid dirt cheap. It makes no other economic sense to pay these people's salaries.