TechRebulic has an interesting article about Microsoft's advances in China. When I first heard about Red Flag Linux, a Linux distribution supported by the Chinese government, my first thought was that this will bring the breakthrough for Linux on the desktop. That was about five years ago. It turned out that this project was a complete failure.
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Chinese simply prefer Microsoft software. Of course, they usually use pirated copies. But since the Chinese government understood that they have to follow international rules if they want to make business in a global market, they can't tolerate this habit anymore. With $7-$10 per seat for Windows and Office the Chinese government certainly made a good deal. But I also think that this is a big step forward for Microsoft, considering how big this market is.
I can understand that Linux advocates are quite frustrated about this development. In my view, this was the last chance of the Open Source OS for quite some time now to become a rival for Windows on the desktop. At the moment, the market share of Linux is not even noteworthy. It is probably below 1%. I must admit I am already quite bored about the ideological discussion when it comes to Linux vs. Windows.
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The hope of Microsoft's opponents doesn't concentrate anymore on Linux, anyway. Everyone looks at Google now, to see if they can force Microsoft on their knees. Considering the efforts Microsoft makes with WPF and Silverlight, which will probably redefine the term "web-based application" very soon, I wouldn't count on that either. If a giant like China wasn't able to change the software world, Google most likely doesn't have better chances. If you are a Windows admin, you probably like to hear such news, since it will keep you in business for sometime more.