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Microserf
Just what Microsoft needs: a damning book about its practices in China
By ERIC ELLIS
November 9, 1999
Web posted at 8:30 a.m. Hong Kong time, 7:30 p.m. EDT
In another era not so long ago, Wu Shihong might've been up there in China's pantheon of communist heroes alongside Mao Zedong's favorite soldier, the selfless comrade Lei Feng, as a paragon of socialist virtue and achievement.
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In a way she is, though in Jiang Zemin's China, it's a different take. Through much of the 1980s, Wu was just another nurse doing her bit in the worker's paradise within the confines of Beijing's Chunshu Hospital. Yet as Deng Xiaoping's market revolution took root, Wu's ambition flowered and she began taking English lessons. She quickly achieved fluency, adopted the Anglicized Christian name of Juliet and, like thousands of her generation, landed a job with a big foreign company.
It was with the computer giant IBM, one of the many multinationals for whom Deng's Communist Party seemed more like the world's biggest chamber of commerce than a regime of socialist dogma. She might've started as "an office logistics person" (a tea lady) but the charismatic Wu quickly rose to be IBM's marketing czar for China.
Her work attracted the attention of Bill Gates, who after a famous nationwide train journey with the Sage of Omaha, Warren Buffett, came away seeing China as Microsoft's Next Big Thing. Early last year, Wu was tapped to be Microsoft China's general manager, winning a massive six-figure (in U.S. dollars) salary and the obligatory options package. IT glamour girl Wu was a household name in China, as Beijing officially embraced the mantra of information technology. Bill Gates was God, Microsoft the church and Juliet Wu a willing and, more importantly, state-sanctioned Chinese disciple.
Today, Gates might see Wu more as Judas. After quitting Microsoft in July, Wu wrote a kiss-and-tell book of her experience with the West: "Flying Against the Wind: Microsoft, IBM and Me." With it she becomes the latest to portray Gates and Microsoft as infotech's Evil Empire.
Far from being an innovator and good corporate citizen, Microsoft, as cast by Wu, acted as a price-gouger. It abused its local staff and-this the cruelest cut of all-engaged in commercial practices that actually encouraged the rise of software piracy, probably the most biggest commercial bugbear impeding Western trade relations with Beijing.
A recent interview to publicize her book had Wu claiming Microsoft priced its product range too high and had an unrealistic take on the Chinese market, which naturally led to cheaper pirated versions. "I wanted to make the Chinese branch of this great foreign enterprise a Chinese company, but I came to understand that Microsoft expected only a single thing from me in China-a good sales report."
The world's richest man and his new president Steve Ballmer might justifiably say, "Welcome to capitalism, Comrade Juliet," but the timing is bad for Microsoft. Wu is generating massive publicity in China just as Microsoft is developing its made-in-China-for-Chinese operating system Venus, an Asian rerun of its overwhelmingly successful efforts to make Windows the virtual standard for the world's computers.
As Wu, with her reputation intact, settles into a new job at a state-owned IT company, events in Washington will not help Microsoft's bid to take over Chinese IT and the Net. A 61,000-word preliminary finding from by the "Hanging" Judge Thomas Penfield Jackson who is presiding over the U.S. government's "browser wars" antitrust action against Microsoft came to a more sophisticated but similar conclusion.
"Many of Microsoft's actions have harmed consumers in ways that are immediately and easily discernible," the judge wrote in a ruling released Friday. "They have caused less direct but serious and far-reaching consumer harm by distorting competition." Jackson cast Gates not as the person who has done the most to usher in the global information age, but as the bogeyman who has done the most to stifle it. The reputation Gates most wants to cultivate for himself and his company-that of a far-sighted innovator who enhances our lives-has been dealt a damning blow.
Where does Bill Gates want to go today? Not into another Chinese newspaper headline, that's for sure.
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