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Market Game: Red Flag Nets 1 Yuan When Microsoft Loses 300
¡°When we sell 1 yuan service 2.0 on the market Microsoft will lose 300 yuan", says Huang Siyuan, marketing director of Red Flag Linux. Service 2.0 is the earliest linux version developed by Red Flag and last year saw 1m sets of operation systems sold. Red Flag, a one-year-old provider in Chongguancun, has challenged Microsoft in market competition.
Red Flag nets 1 yuan means Microsoft loses 300
Doubtless to say all software companies aim at Microsoft, and Red Flag is no exception. Like many other hi-tech providers, Red Flag sets up the company after having products of its own.
Jointly founded by Software Research Institute of the Chinese Academy of Sciences and NewMargin Venture Capital, June 2000, Red Flag put out its first product on October 1999.
In 2000 Red Flag sold 1m sets of operation system, or one sixth of domestic operation system sales, as well as 20,000 sets of server system. Because of Red Flag Microsoft failed to attain its sales targets.
According to Huang's calculation, Microsoft's server software is currently sold at a price of 10,000 yuan, while linux's service 2.0 is only priced at 200 to 300 yuan. The true value of service 2.0 is estimated to exceed 100,000 yuan since it contains necessary software as data base, fire wall, e-mail and so on. So from this point of view when linux sells 1 yuan product Microsoft will lose 300 yuan accordingly.
This is the same when it comes to Red Flag's newest appliance server priced between 2000 and 3000 yuan, and even more so for linux's desktop system sold at only dozens of yuan.
In 2000 Red Flag's market share exceeded 21 percent on server products, while Microsoft is around 23 percent. Red Flag may do a better job in the single-board field due to its own characteristics. Apparently it is quite possible Red Flag grabs a share of market from Microsoft based on its 40 to 60 percent growth rate.
Red Flag relies on two weapons
Due to its opening source code of linux system the production cost is quite low, so Red Flag grabbed market quickly on the strength of its cheap, licensed software.
Governmental support is of the same importance for Red Flag. Huang says the successful biding of Olympic Games will firstly benefit hi-tech consultation industry.
Huang tells now Red Flag is just like Microsoft twenty years before, hoping the company will by its products run neck by neck with Microsoft in 5 to 10 years if it could find its direction.
Linnux Chinese Platform Breaks Microsoft's Monopoly
Beijing Redflag Chinese 2000 Software Co. Ltd (Chinese 2000) has recently released the Linux-based RedOffice, or Chinese 2000 Desktop Office Platform, breaking Microsoft's monopoly over office platform software.
This Chinese office software with independent own rights will greatly enhance the information security for all its functions and software have been based on open source code of Linux.
By PD Online staff member Li Heng
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