Microsoft is an American multinational technology company with headquarters in Redmond,

Washington. It develops, manufactures, licenses, supports and sells computer software,

consumer electronics, personal computers, and services. Its best known software products are the
Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet
Explorer and Edge web browsers. As of 2016, it is the world's largest software maker by
revenue, and one of the world's most valuable companies.

Entry into china market

In 1992 Microsoft sent a couple of sales managers into China from Taiwan. Their mission? Sell
software at the same prices the company charged elsewhere. Microsoft bumbled for years after
entering China in 1992, and its business was a disaster there for a decade. It finally figured out
that almost none of the basic precepts that led to its success in the U.S. and Europe made sense in
China. There Microsoft had to become the un-Microsoft - pricing at rock bottom instead of
charging hundreds of dollars for its Windows operating system and Office applications. It took
Microsoft 15 years and billions of dollars of lost revenue to learn how to do business in China,"
says Sigurd Leung, who follows the company at research firm Analysys International in Beijing.
"We were a naive American company," concedes Gates in an interview.

The problem wasn't brand acceptance; everyone was using Windows. It's just that no one was
paying. Counterfeit copies could be bought on the street for a few dollars

Microsoft fought bitterly to protect its intellectual property. It sued companies for using its
software illegally but lost regularly in court. Its executives, who often disagreed with the
strategy, failed in its implementation. Country managers came and went - five in one five-year
period. Two of them later wrote books criticizing the company

In 1999, Gates sent Mundie, who heads the company's public-policy efforts, to figure out why
Microsoft was so reviled. Mundie started visiting China four or five times a year. He brought 25
of the company's 100 vice presidents for a week-long. Mundie also began talks with Chinese
security officials to convince them that Microsoft's software was not a secret tool of the U.S.
government. As a result, in 2003 the company offered China and 59 other countries the right to
look at the fundamental source code for its Windows operating system and to substitute certain
portions with their own software - something Microsoft had never allowed in the past.
by 2001, Microsoft executives were coming to the conclusion that China's weak IP-enforcement
laws meant its usual pricing strategies were doomed to fail. Gates argued at the time that while it
was terrible that people in China pirated so much software, if they were going to pirate anybody's
software he'd certainly prefer it be Microsoft's.

Today Gates openly concedes that tolerating piracy turned out to be Microsoft's best long-term
strategy. That's why Windows is used on an estimated 90% of China's 120 million PCs. "It's
easier for our software to compete with Linux when there's piracy than when there's not," Gates
says

Mundie started by talking about the challenges of transforming a socialist planned economy into
one based on the market, and noted that never before have leaders anywhere attempted such a
huge transition. "Whether it's running a global company or a government," he says, "people have
to sit there and make their own value judgments against what they deem to be the greater good
all the time. I personally have found the Chinese leaders to be fairly thoughtful about these
things. Each society makes choices to protect the rest of society. There are some aspects of that
that happen here and in other countries that people would prefer didn't happen.