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China Orders Replacement of Microsoft's Operating System On Government Computers

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China will replace Microsoft Corp’s Windows operating system on government computers with domestic products, reported Jinghua.cn, a Beijing-based newspaper controlled by the government mouthpiece, People’s Daily.

China will uninstall the Windows operating system from 15% of government computers every year after Ni Guangnan, an academician of the Chinese Academy of Engineering, filed an internal report to Chinese decision makers detailing the urgency of replacing the Windows system, Jinghua reported, citing an anonymous source with knowledge of the matter. The source said China’s state-owned enterprises will also stop using Microsoft’s chips, servers and software.

The move follows China’s May decision to ban government use of Windows 8, Microsoft’s latest operating system, out of security concern. By 2020, a “significant” number of Microsoft’s products will be replaced with domestic versions, the source said.

Several phone calls to Microsoft’s Beijing headquarter went unanswered.

The news is another blow to the company that has long struggled with sales in China.Because of piracy, Microsoft’s China revenue is about a twentieth of its revenue in the United States even though the China market is as big, former chief executive officer Steve Ballmer reportedly said in 2011.

Microsoft is also facing an anti-monopoly probe in the country. In July, Chinese investigators raided Microsoft’s offices in Beijing, Shanghai, Guangzhou and Chengdu. The State Administration for Industry and Commerce said Microsoft is suspected of violating Chinese anti-monopoly rules because of problems with compatibility, bundling and document authentication for its Windows operating system and Microsoft Office software.