Microsoft recently informed investors of a deal with a Chinese technology company regarding sales of its new Windows 10 operating system to the country’s civil service. For this, a new joint venture called C&M Information Technologies has been formed, but it is subject to regulatory approval in China.
Customizing Windows 10 for China
Under the new joint venture, Microsoft and its partner China Electronics Technology Group (CETG) will license, deploy, manage and optimize Windows 10 for China’s government agencies and state-owned enterprises, and they will also provide support and services for customers. C&M Information Technologies’ role will be that of “exclusive licensor” of Windows 10. The JV will work on modifying Windows 10 for use by the Chinese government. Government customers will also be getting support from the JV.
In a blog post, Yusuf Mehdi, corporate vice president of the Windows and Devices Group at Microsoft, said, “We’ll continue to keep Windows 10 secure and sustain our strong privacy standards, while recognizing that public sector solutions may differ from technology offered to private sector enterprises and consumers around the world.”
Q2 Letter: Baupost won big in Q2 with PG&E, eBay, Liberty Global
Seth Klarman's Baupost recorded "strong" gains for the second quarter, although precise numbers were not included in the July 23 letter to investors, which was reviewed by ValueWalk. Klarman said that during the first quarter, they were "substantial purchasers of securities," while during the second, they were "significant net sellers" due to the strong rally. Read More
Microsoft keen to improve its image
China is the world’s second-largest economy after the U.S., and Microsoft seeks to improve its image there. National Security Agency (NSA) contractor Edward Snowden previously alleged that the foreign companies were being used for spying in China. This brought a bad reputation to the U.S. and the US firms. Last year, China’s antitrust regulator conducted new raids on Microsoft’s offices in China.
Approval of this joint venture holds a lot of importance for Microsoft since it will mark a drastic turnaround in the Chinese government’s view of the U.S. firm. Previously, the Chinese government put a ban on the use of Windows 8 by official agencies, and a few months later in 2014, it even launched an anti-monopoly probe against the company.
Microsoft is also making a push into the consumer sector in China to push legitimate versions of Windows in a market that is largely dominated by piracy. In September, Microsoft and Baidu, the largest search engine in China, entered into a partnership to allow the service’s customers to upgrade to Windows 10. It entered into similar deals with Lenovo, Tencent and Qihu 360.