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Marketer: Microsoft Corp. Agency: McCann Erickson, Beijing

Microsoft urges Chinese businesses to use licensed software after signing local deals with PC makers to install legitimate software

[beijing] Microsoft Corp. has launched its first ad campaign in China, a market famous for rampant piracy of computer software, DVDs and CDs, encouraging local businesses to use only licensed software.

In outdoor, print and online ads, unsavory creatures like red ants crawl into a computer and a snake is coiled like a CD-ROM with the slogan "Why take the risk?" to suggest illegal software practices can creep up on businesses and cause major problems down the road.

The campaign's mid-April debut coincides with major developments that could turn the mainland into a highly lucrative market for Microsoft. Until now, ads encouraging PC buyers to pay for software would have been a useless effort. But China's largest PC makers have finally agreed to pre-install Windows software on most of their hardware.

"The whole issue for [Microsoft] in China has been pirated software. Literally up to three or four months ago, companies shipped computers naked with no operating system to keep prices competitive," said a computer-industry executive in Beijing. "They were almost begging users to put in whatever software they wanted to, and consumer incentive to buy legitimate software wasn't high. Approximately 90% of computers had illegal software. If that figure drops to just 50%, it means huge revenue for Microsoft. "

A deal with Lenovo Corp., China's largest PC maker, is worth $1.2 billion over the next 12 months. It was followed by similar deals with China's other leading manufacturers, Founder Technology Group, Tsinghua Tongfang Co. and TCL Group.

Industry experts say the computer companies were pressured by Chinese officials to take steps to protect intellectual property, because the government itself was being pressed by Microsoft's large government-relations team.
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