19 November 2003 The Chinese government is to roll out more than 200 million open-standards based desktop computers in one of the most dramatic setbacks for Microsoft in years.

In the first step on that road, a Chinese government-backed IT consortium is to buy between 500,000 and one million Linux-based desktops from Sun Microsystems a year, starting at the end of 2003. It is not clear how many years the deal lasts.

The systems will be priced at $100 per employee per year and will run Sun’s Java 2 Standard Edition programming environment and Sun’s Star Office desktop applications suite. They will also come installed with a range of open source software, including the Mozilla web browser.

The deal represents a serious blow for Microsoft. The country’s IT market is growing at 20% a year, with annual software sales expected to reach $30 billion by 2005, according to IDC. Earlier this year, Microsoft’s chairman and chief software architect, Bill Gates, had a two-day visit to Beijing during which he met with the Chinese president, Jiang Zemin.

Clearly revelling in the coup, Sun CEO Scott McNealy told the Comdex trade show in Las Vegas yesterday: “This makes us instantaneously the number-one Linux desktop player on the planet.”

However, it is not yet clear whether the bulk of China’s 200 million new desktops, which Sun describes merely as “open-standards-based solutions”, will be supplied by Sun.

China has already developed its own version of Linux and Open Office, called Red Flag Linux and RedOffice respectively.

And competition is likely to come from, among others, IBM, which recently unveiled plans to begin supporting Linux desktops from 2004.