|
 Email This Post
|
 Print This Post
|
Following the news reports of large busts in China (pirated Windows Office and Vista programs) and India (computer dealers in Gujarat), Microsoft is feeling pretty good about itself and its battle with its evil nemesis, the IP monster. A blow was struck for capital markets, intellectual property, common decency! However, Henry Chesbrough argues today in BusinessWeek that Microsoft should be welcoming rather than discouraging piracy in India and China.
From Gujarat, India, to Santa Clara, Calif., Microsoft is simply doing the right thing for the company and its shareholders, as any company should. But is the giant shortsighted in treating these two situations in the same manner? The answer could be yes.
Chesbrough uses the example of Betamax, the video recording format that, because it was linked to Sony proprietary machines, lost out to VHS which JVC was willing to license to other manufacturers back in the early 80s. The result, VHS won the day and remains to this day (albeit in to a much lesser degree with the rise of hard disc recorders and cheap DVD players – thank you China).
Chesbrough argues that focusing narrowly on protecting IP interferes with what he calls the “Growth Phase” of a technology, where a company needs to drive growth so that their technology becomes the “dominant design.” In China and India, a rising economic prosperity has created a boom in PC sales that has thrust Windows into this Growth Phase.
One-size-fits-all thinking would suggest that Microsoft should employ the same weapons against software piracy in India that it uses in the US. This would mean vigorously policing the use of its software and undertaking prompt legal action against any and all illegal use wherever in the world such activities are found. And that seems to be the path Microsoft took in Gujarat this spring. A more nuanced view would suggest a dramatically different approach, shown in Figure B.
While Microsoft leads in India and China, Linux is mounting a strong challenge in both nations. The Linux community has signed a deal with Beijing to make Linux the default operating system for computers used by the Chinese government and many parts of the Chinese educational system.
In India, the prices of Windows and Office are so high that Linux is the only practical, affordable choice for most of the population.
In this context, applying Western IP enforcement policies to stem the flood of illegal copies of Windows in China and India risks winning the battle (to deter and punish IP infringement) while losing the war (to become the dominant standard operating system on the desktop).
So by encouraging piracy, Microsoft will guarantee that the future computer systems and servers in China and India will be Windows-based, while if Microsoft succeeds in stopping the pirating of its software, it will push more consumers towards open-sourced software like Linux. A huge cheer goes up in the open-source camp!
Microsoft has won the war in the United States and Europe Chesbrough argues, Asia is the next battleground. Should Microsoft pull back their hardcharging IPR lawyers, they may yet win again.
