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Microsoft

Kingsoft software to capitalise on Microsoft's Office woes in China

Chinese IT company seeks to poach users of software giant's Office suite as mainland campaign promotes use of domestic products

PUBLISHED : Thursday, 28 August, 2014, 5:03am
UPDATED : Thursday, 28 August, 2014, 5:03am

Software firm Kingsoft is looking to steal market share away from Microsoft's Office users on the mainland, taking advantage of Beijing's call for government departments and state-owned enterprises (SOEs) to move to domestic software and hardware because of cybersecurity concerns.

"The so called 'de-IOE' is certainly positive news for Kingsoft," Zhang Hongjiang, the chief executive of the Zhuhai-based, Hong Kong-listed firm, said, referring to a campaign that originally targeted the products of US firms IBM, Oracle and EMC.

The campaign has been going on for at least a year, but accelerated in May after Washington indicted five Chinese military officials for industrial espionage.

Microsoft has been targeted by mainland authorities on antitrust grounds.

Zhang Mao, the head of the State Administration for Industry and Commerce, earlier this week said that Microsoft's sales of its media player and internet browser software on the mainland had been "problematic" and the software developer had not been fully transparent with information about its Windows and Office sales.

In May, the mainland banned the use of Microsoft's Windows 8 operating system on all new government computers.

IBM is one US firm that has weathered the storm, announcing on Tuesday that Industrial and Commercial Bank of China (ICBC) had deployed a new IBM mainframe computer system.

It also sealed a technology sharing agreement recently with Shandong-based IT firm Inspur. The venture should help boost IBM's mainland sales, which dropped 11 per cent year on year in the second quarter.

Zhang said Kingsoft welcomed supportive policies from Beijing but was well aware that the "critical mission" was to produce a quality product. Kingsoft's Microsoft Office alternative, called WPS Office, has received favourable reviews overseas and has a 10 per cent share of the mainland market, said Yao Shanshan, an analyst at CCID Consulting's Software and Information Services Research Centre.

"If you look at the software products supported by the government over the past years, the only one that users would like to use and stay with is WPS office," Zhang said.

A number of banks, including ICBC, had switched from Microsoft Office to WPS last year, Zhang said. "We are increasing investment in WPS because enterprises are really beginning to use it."

Xiang Ligang, founder of information technology and telecommunications portal operator CCTime, said that in terms of basic functions, WPS was as good as Microsoft Office. "But Microsoft is in a dominant position, and it is not easy to catch up with them in terms of market share."

Yao said Microsoft's share of the mainland office productivity software market was between 70 and 80 per cent.

"The favourable policy of the government will show its influence," she said, pointing out since 2010 the market share of domestic software, including office software, had increased to 7 per cent from 5.7 per cent.

Kingsoft was in talks with major shareholder Tencent on the possibility of launching its mobile games and antivirus software on Tencent's popular WeChat instant messaging platform, Zhang said, but had yet to agree to "any concrete plans".

Rick Lai, an analyst at Guotai Junan International, said Kingsoft might also team up with smartphone maker Xiaomi to pre-install its applications.