Chinese Govts Information Security Concerns Threatens Business of Foreign Tech Giants

Published By : 01 Jul 2014 | Published By : QYRESEARCH

The Chinese government’s concerns about information safety could have an adverse impact on software procurement from overseas vendors. Analysts say that this could likely dent the profitability of global majors such as Oracle, Adobe and Microsoft. Fears that the Chinese government could shun software have intensified after a report in the China Securities Journal about state-level governments in China discontinuing the use of the Microsoft Office suite. However, Microsoft shot down these reports as being ‘completely untrue.’ A senior executive from the U.S.-based company said that they had contacted the Chinese Ministry of Finance over these reports, but officials from the ministry were unaware of any such rulings. The official, requesting not to be named owing to the sensitivity of the matter, said that the company is working directly with the Chinese government to ensure that its business in the sector remains protected.

As of Monday evening, the MS Office suite was listed on the Central Government’s procurement center website, and was available for purchase. However, industry insiders feel that global tech giants will imminently feel the heat as local players in China’s software market will compete fiercely to bag government orders. 

This incident is a case in point about the growing concerns about the Chinese government’s tightening reins over information security. These fears have only been compounded by the increasing incidences of terrorist attacks here. The trend indicates that a number of state-owned enterprises such as power utilities, governments, financial institutions, and healthcare organizations will likely adopt domestic software products.

One of the most prominent competitors that Microsoft might have to contend with is Kingsoft - a software company that has been vying to gain a larger share of the government’s software purchase outlay.
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