Backlash in China as Microsoft Cuts XP Support

TAIPEI (TheStreet) -- China is slamming Microsoft (MSFT) for its withdrawal of support for Windows XP, a move that leaves about 200 million users open to PC viruses, and the American software giant has responded by restoring a measure of support.

Microsoft's decision to end XP security updates for the 13-year-old operating system as of April 8 shows "extremely irresponsible behavior" and "lack of trustworthiness," said Chinese state mouthpiece Xinhua News Agency.

"Microsoft has acted irresponsibly by withdrawing support to XP and leaving users to fend for themselves, which will damage the IT giant's image," fellow state-run media organization China Daily said in a Friday commentary. The end of support, it says, "infringes upon the rights of legal Windows XP users."

Microsoft has ended security upgrades, patches and other support for the outdated XP system worldwide. The harsh reaction in China points to heavy local dependence on XP, which is cheaper than newer operating systems, and indicates that because of its market size the country can get results by protesting against a multinational corporation -- particularly one with ambitions to grow.

Microsoft estimates that 90% of XP users in China are running pirated software, meaning they would not qualify for support now or before. Apart from noting that statistic on its website, the company has taken a cooperative approach to criticism.

"In terms of public relations, you have to still be flexible," says Mark Natkin, managing director with market research firm Marbridge Consulting in Beijing. "You have to at least demonstrate that you're listening."

The software company answered criticism by letting local Internet content provider Tencent Holdings (0700:Hong Kong) and Chinese PC developer Lenovo (LNVGY) extend certain types of support to XP users, online as well as off. The idea would be to protect users against viruses and get them onto newer Microsoft systems.

The extended support, which covers virus repairs and updates to newer operating systems, could keep public anger short-lived, sustaining Microsoft's reputation in a crucial market. Last year it started signing Chinese up for its cloud service and announced plans to open an "innovation center" in out-of-the-way Hainan province.

Without schemes to extend XP support, users might vent anger by switching to non-Microsoft systems or ditching Internet Explorer for a browser developed by Chinese Internet security firm Qihoo 360 (QIHU), a Shanghai-based high-tech analyst says. Qihoo 360's alternative is in a race with Internet Explorer to be China's most popular browser.

The same Chinese developer is also working on a post-April 8 scheme to support Chinese XP users, some media reports say.

Microsoft's dropped XP support gives homegrown operating systems a chance to "rise to the challenge" of vying with foreign-designed peers, Xinhua says.

The tie-up with Lenovo and Tencent already lifts two local tech industry stars, answering calls from the government to business circles for less reliance on foreign providers.

Microsoft may already know what's expected. Last year it partnered with Chinese cloud enabler 21Vianet (VNET) to introduce Azure and, by announcing the Hainan investment, tickled the government's ambition to develop remote areas of the country.

In handling the XP backlash, Natkin says, "What they have done is reasonable," Natkin says

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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