Microsoft Greed
Microsoft CEO Satya Nadella delivered a keynote speech at Tech Days Korea 2014 in Seoul on Sept. 24, stressing that developers need to adopt a new development methodology in step with the ongoing changes in mobile and cloud environments.
Still, not a few of those in Korea’s IT industry are skeptical about his remarks, because Microsoft has been passive when it comes to employment and social contributions in Korea in spite of its monopolistic position in the country’s OS market. Last year, it recorded 600 billion won (US$574 million) in sales but hired just 480 people in the country. Besides, the actual size of the sales is estimated to be much larger than that, since Microsoft has taken tens of dollars in royalties per PC.
The main topic of the CEO’s speech was cloud computing and mobile technology. According to industry experts, this is for Microsoft, which is struggling in the mobile sector, to make a breakthrough in the Korean market by means of cloud solutions and obtain more support from the Korean government for the Internet data center that it is planning to build in Busan City. He, in fact, met with Minister of Trade, Industry and Energy Yoon Sang-jik after the keynote address to discuss the construction of the data center.
In the meantime, problems concerning the Windows’ monopoly in the Korean market still remain persistent, particularly in the wake of the termination of support for Windows XP in April this year. The Windows OS accounts for 97.7 percent of the market, which is much higher than the international average of 89.41 percent. This means that Microsoft is making more profits in Korea than outside of it.
The problem is that Microsoft is taking advantage of the extremely high market share to exercise its copyrights against the government and public institutions and enterprises, and take hundreds of billions of won in license fees. For example, it demanded 210 billion won (US$200 million) from the Ministry of National Defense in May for its use of unlicensed software.
As far as employment in Korea is concerned, Microsoft is one of the most passive foreign companies. According to the Korea Software Industry Association, 1,070 people worked for Oracle Korea in 2013, when it recorded 703.9 billion won (US$673.9 million) in sales. During the same period, Microsoft Korea earned 600.8 billion won (US$575.3 million) while hiring only 480 employees. The construction of the Internet data center has little to do with job creation either, despite the privileges in land purchases and electricity usage.