[DenisM]

Quote: This is exactly why Microsoft won't see a red cent from the Chinese for their software: why pay a premium for the legitimate version when the copy does the exact same thing for cheaper?

When I worked at Microsoft I got to listen to people working on relationship with China around software licensing (i.e not Bing). Accordibng to them the micro-software sells very well there. It was not a smooth sailing by any means and it took a lot of work, not unlike it took Bill Gates a lot of work to start selling software in the US when people were copying it for free instead in 1970s (http://en.wikipedia.org/wiki/Open_Letter_to_Hobbyists). The visit of Chinese president to Microsoft campus couple of years ago has symbolized the turning point.

Could you help me reconcile your point quoted above with the first-hand information I was presented? Thank you.

[prole]

This quote was a generalization, but aimed at ordinary users. As mentioned in this article describing Microsoft's efforts in China (http://money.cnn.com/magazines/fortune/fortune_archive/2007/...), after years of failed attempts, MS was able to turn its image around from hostile to gentle software giant and convince the government to "go genuine." In order secure those buyers, MS drastically cut prices, but given the enormous number of Chinese government users, it's probably still netting a decent fortune.

As for those ordinary users who often trawl underground software/movie markets, they are the ones who will probably never be tempted to "go genuine." They aren't under pressure from the MS/PRC back-scrubbing to do so. It's likely that most people don't need to find a Windows CD if they've already purchased a computer with it pre-installed, but anything else is open game. The vast majority of these ordinary users are purely driven by cost, and if they're buying the cheapest pirated CDs (hey, even pirates have to compete), that money isn't making it's way back to Microsoft.

As an aside, the biggest reason why I would never buy from these markets in China is that some of the software is infected with trojans. "You get what you pay for," right? ;)

[DenisM]

In other words Microsoft has sewn up the preinstalled PC market and the government market (the two biggest markets), and have left after-market to pirates (the smallest market).

Surely your Microsoft won't see a red cent from the Chinese was more than a little exaggeration?