Microsoft develops customized product to address government's security concerns
BEIJING -- Microsoft Corp. has unveiled a new Windows 10 software customized for the Chinese government to improve security, including modifying the program to prevent data that is typically collected from being transmitted to other devices.
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The product addresses concerns by the Chinese government over network security, including the desire to locally store data -- such as details on the hardware or applications being run -- and to prevent overseas parties from accessing sensitive information.
In addition, games such as Solitaire that are normally bundled into the software were removed because they aren't needed by Chinese government employees, Microsoft said.
The Chinese government version also will have a customized Help function, said a representative for Microsoft, which formed a joint venture with state-owned China Electronics Technology Group to develop the program.
CETC owns 51% of the joint venture and has traditionally developed technology for the Chinese military and civilian use.
Microsoft developed the special Windows 10 version in an effort to do business in China. Other U.S. tech companies, such as Qualcomm Inc. and Intel Corp., have also struck joint ventures in China in recent years.
The modified version of Windows 10 is an example of how global companies are customizing products to meet Beijing's heightened security demands. Next month, China's new cybersecurity law -- which sets up a committee to conduct security reviews of technology products supplied to the Chinese government and critical industries -- will take effect.
To develop a version suitable for the government, Microsoft allowed its Chinese partner to review and inspect its source code in a secure environment, but didn't allow them to manipulate it, the representative said. Microsoft has been doing this as part of a broader government-security program with more than three dozen countries since 2003.
Some tech observers said limiting data storage to the devices could be less secure; if the device was hacked, a lot of information would be accessed. China was hit hard by the recent WannaCry attack, in part because bootleg versions of operating software.
"It's not very smart to have all data on one device," said a lawyer who works in the tech industry in Beijing. "It could make things less secure instead of more secure."
The modified Windows 10 represents a chance for Microsoft to regain an important market in China. Approximately 16 million PCs are used by the government, according to estimates from research firm IDC. This version is only available to Chinese government offices and state-owned enterprises in critical infrastructure sectors. The company's Windows 8 and 10 consumer versions aren't on government procurement lists.
The new Windows 10 version is already being used in pilot programs by the national customs agency, an economy planning commission in the city of Shanghai, and Westone Information Technology, a state-owned tech company. A Microsoft spokesperson said allowing these customers to use the software first let them ensure it was installed and deployed properly.
The program still must go through a Chinese government review before it can be included on official procurement lists.
The Microsoft spokesperson said the joint venture was in "active discussions" with necessary entities to complete government requirements, including finalizing a price and product name.
--Jay Greene in Seattle and Yang Jie in Beijing contributed to this article.
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(END) Dow Jones Newswires
May 26, 2017 02:47 ET (06:47 GMT)