U.S. tech giant Microsoft Corp. revealed new details of a plan to team up with a Chinese partner to speed up the adoption of the Windows 10 operating system in China.
The company on Wednesday announced that it will create a jointly owned entity with China Electronics Technology Group Corp. (CETC), a state-owned company that provides technology for Chinese military and civilian use. The venture is part of a relationship with CETC publicized in September, Microsoft said in a news conference in Beijing.
The venture, known as the C&M Information Technologies, will be based in Beijing and will license, deploy, manage and provide technical support for Windows 10 OS used by government agencies and government-owned institutions, Yusuf Mehdi, corporate vice president of Microsoft's Windows and devices group, wrote in a blog post released to coincide with the conference.
The Redmond, Washington-based company has been making deals with several Chinese firms in recent years due to headwinds facing Microsoft and other U.S. tech vendors in the country.
Windows software is highly popular in China, but often on a pirated basis that brings in zero revenue to the company. More recently, Microsoft has faced government scrutiny over its software distribution methods as well as a ban by China's procurement agency that prohibited government offices from purchasing PC's with Windows 8 software installed.
The company's problems were further exacerbated by security fears affecting many U.S. hardware and software companies that are doing business in China, stemming mainly from allegations by former U.S. National Security Agency (NSA) contractor Edward Snowden that foreign-made products have been used for spying.
The initial relationship with CETC, announced during a visit by Chinese President Xi Jinping to Seattle, was described as an effort to set up a "localized" version of Windows 10 for use in Chinese government agencies and state-owned enterprises operating critical infrastructure, according to a report from the Wall Street Journal on Thursday.
The new venture will have exclusive rights to license a specific configuration, or image, of Windows 10 developed for Chinese customers, including capabilities such as government-selected antivirus software, Mehdi said in his blog post.
Mehdi also made assurances that the company will not weaken the security of Windows 10 and will retain ownership of the technology, while continuing a policy of allowing customers and partners to develop additional components to integrate into the OS.
The venture is subject to regulatory approval in China, Microsoft said.