Disgraced Red Flag Linux Dims China-made OS

As the Chinese government is paying increasingly closer attention to the information security， there are growing calls for the local-made core operation system in China. However， there have been no impressive fruits by now. By contrast， Red Flag Linux， a China-based IT company that was given the task to challenge Microsoft， did not survive its 14th year.

Red Flag Linux just made the announcement of assets transfer at the end of June. It plans to transfer all the company’s registered trademarks， software copyrights and other as- sets. Before the announcement， Red Flag Linux was reported to bear the debt of over 20 million yuan.

Red Flag Linux’s quit has dimmed the outlook of Chinamade operation system. The increasing reliance on foreignmade operation system has become a harsh problem for China and sent this country into a dilemma. What will the Chinese own operation system be like in the future？

Shattered Dream of “Red Flag”

With the broken capital chains and resigned employees， Red Flag Linux’s doom started in this February. In that month， the company which was said to be the leading role in the rank of China-made operation system announced the start of dissolution and liquidation， marking the end of its 14 years’ development.

According to the current news， the 20-milllion-yuan debt of Red Flag Linux mostly consists of the unpaid wages of the employees. After that， the court sealed the trademarks and software copyrights of Red Flag Linux. The labor union， which is the largest debtor， had the right to require the court to auction these assets any time.

On June 27， Red Flag Linux officially published the aforementioned announcement on China Computer Industry Website， planning to transfer the company’s entire portfolio of trademarks and copyrights through public bidding.

In the announcement， Red Flag Linux required the bidders to have four conditions： the domestic-funded enterprises that are devoted to the development and spread of Chinamade operation systems， the companies with enough technological and financial power to continue and improve Red Flag Linux’s products， the companies that are willing to carry on the product maintenance and upgrade Red Flag Linux promised to it users， and the companies that have the will and power to finish the following examination and tracking of the governmental projects of core electronic parts， high-end chips and basic software in place of Red Flag Linux

The bankrupt company stressed that only the companies meeting the four conditions spontaneously are qualified to be bidders. Meanwhile， if the bidder can acquire the entire Red Flag Linux， it is going to have the preference to gain the aforementioned assets.

The employees in the clearing team of Red Flag Linux said that they did not receive many calls about bidding in the first few days after the announcement， but this did not mean that the company and its assets were not popular. The outsiders have already listed potential bidders iSoft Infrastructure Software Co.， Ltd and Sogon Information Industry Co.， Ltd， both are subsidiary companies under China Electronics Technology Group Corporation.

This June， iSoft announced the takeover of the customer service of Red Flag Linux after its bankruptcy. Meanwhile， iSoft has already employed dozens of core workers of Red Flag Linux in development， technological support and sales. These actions are considered to be the prequel to the overall takeover of Red Flag Linux and its staff.

Zhao Xiaoliang， general manager of iSoft， said that the company had already seen the announcement of Red Flag Linux and was keeping an eye on it， but there are some conditions needing discussion.

“We are able to meet many conditions in the announcement， but we think the last one to be improper when it comes to the disposal of assets，” Zhao said. The governmental projects of core electronic parts， high-end chips and basic software are not to be easily taken by other companies. Now the team of Red Flag Linux has been dissolved. The problems of finance， marketing， industrialization and decisions about the whole projects are not so easily integrated and digested by the bidders.

Zhao Xiaoliang said that iSoft was now determined to develop China’s own operation system and that was why it was keeping an eye on Red Flag Linux. “We are now reviewing how many benefits can be brought if we acquire Red Flag Li- nux. The software copyrights have some basic value， but not the most important appeals. What matters is the trademark of Red Flag Linux. It is valuable because it can still be recognized by a lot of people， thanks to the achievements Red Flag Linux made initially.”

Zhao Xiaoliang has heard of other potential bidders and he believed that those competitors， once chosen， are very likely to carry on the essence of Red Flag Linux even though some of them are not within the IT industry.

The Future of China-made OS

In the trend of pursuing local-made software with the new policies of encouragement and dividends， the quit of Red Flag Linux is quite unexpected yet an act out of no choice.

It is known that this company was founded in June 2000. It is a Sino-foreign joint-invested enterprise. One of its stakeholders is the top research institute in China the Chinese Academy of Sciences （CAS）. After its foundation， Red Flag Linux was given the historical mission of “letting China own the operation system with independent copyrights”. It is once a lighthouse for the Chinese people who dreamed of having their own operation system. The Red-Flag Linux operation system it launched used to be quite influential in Chinese and overseas markets and had recruited a certain number of users.

In the grand bidding for the projects of core electronic parts， high-end chips and basic software in 2010， Red Flag Linux also took the leading role in the key project of “R&D of universal desktop operation system and its industrialization”. It also co-worked with other companies or institutes in other four projects.

The CAS attributed the closure of Red Flag Linux to the improper management of its executive team in one of its reports. As it has said， the company was in a mire of misappropriated management for a long while and had to rely on the financial support from the CAS for its survival.

However， the employees of Red Flag Linux said that the company had to use its reserve capital and even the employees’payrolls in advance to offset the financial gap in the project of core electronic parts， highend chips and basic software. This directly led to the tenseness of the capital chain in March 2013 and the tenseness had finally evolved into the broken capital chain.

Nevertheless， Red Flag Linux has already gone into the clearing procedures. Its failure has presented a question that cannot be avoided： how the companies of developing China-made operation systems can develop independently？

Zhao Xiaoliang said that it took a certain amount of time to develop the China-made operation system. All parts from making it accepted by the market to mproving it to the industrial level need great efforts of the involved enterprises.

“The mobile OS， for example， is going to be an important field in the future. But honestly， we do not know how to do well in this sector，” Zhao Xiaoliang said. Apple’s iOS and Google’s Android have already taken a majority of the mar- ket. They are easy to use and enjoy good development. It requires multiplied efforts of Chinese enterprises to seek breaches and set foot in this field and such a result might not be achieved in five years.

In Zhao Xiaoliang’s opinion， the Chinese government has already made great efforts in the development of China’s own operation system， but the enterprises still need to be more open to embrace more partners and accept the advices of others.

For example， China is the largest smartphone market in the world， but there is no trace of China-made mobile OS in that field， Wang Yanhui， secretary-general of China Alliance of Mobile Phone， said that the OS and chips decide the allocation of benefits of the industry and they thusly have great economic value. However， an operation system that does not match the industry and market is nothing but a“demonstration” or“sample”. It is far from a full-fledged product.

There are still many Chinese enterprises that are staying away from the market. Their appearance is more or less a result of the political need such as the information security of China. Therefore， they need the financial aid from the government to survive and have no market expansion ability. They would die quickly when they are exposed to the competitive market and deprived of the governmental assistance.

“Yet we still have the confidence and determination to do this. Many people in the industry have already changed their minds. We know that being simply focused on the technology is far from enough and we need to keep up with the market，” said Zhao Xiaoliang.