First Microsoft, now IBM – Who’s next in China’s ‘war on tech’?

small__5812275975Is China preparing to launch all-out war on US technology providers? That remains to be seen, but the dispute between the two superpowers is certainly heating up with reports that Chinese authorities are “reviewing” if local banks should dump IBM’s servers for something else.

The report, which cites four people familiar with the matter, comes from Bloomberg. It states China is “reviewing whether Chinese commercial banks’ reliance on the IBM servers compromises the country’s financial security.” The word “high-end servers” is also used in the text, which suggests China is targeting either mainframes or POWER systems. It’s significant because banking applications for both platforms are usually dependent on IBM’s hardware. However, this also means that if China’s banks are told to find alternative servers, it’s unlikely to be something they could accomplish easily.

No doubt China realizes this, and so one has to wonder just how accurate Bloomberg’s report really is. Nevertheless, even the threat of banning IBM’s gear could hurt Big Blue, whose hardware division isn’t exactly in the best of health right now. The implication that IBM could somehow be in cahoots with the US government certainly won’t help its sales – indeed, the allegations are about as helpful as a hole in the head as far as Big Blue is concerned.

The threat is also a useful weapon for China in its ongoing war of words with Washington, serving as a reminder it only takes a few strokes of a pen to cause it some headaches. And that’s precisely what it did just last week, when China said it plans to start vetting US-made hardware to ensure it’s not infested with spyware. This followed an announcement two days earlier it had banned Microsoft’s Windows 8 operating system from being used on all government computers. That decision was ostensibly made because China said it was upset over the end of support for Windows XP and didn’t want to find itself in the same situation again, though its timing – just days after the US charged five Chinese army officers with cyberspying – suggests retaliation may have been a bigger motivation.

In any case, Bloomberg says China’s President Xi Jinping will ultimately decide whether or not the IBM server review is to be acted upon at a later date. Will Jinping pull the trigger? Or will the ‘superfoes’ finally reach an understanding before it’s too late? Stay tuned!

photo credit: Eric Constantineau – via photopin cc