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A Silver Lining in the Virus Cloud?

By Bruce Einhorn The computer virus that staggered the world's e-mail systems hit hard in Asia (see BW, 9/08/03, "The Internet Epidemic"). In China, about a third of PC users have been infected. Across the region, networks have struggled to keep up with the enormous amount of e-mail generated by the SoBig virus.

"Traffic basically slowed to a crawl" because of SoBig, says Suresh Ramasubramanian, manager of security and antispam operations at Outblaze, a Hong Kong-based operator of e-mail systems for companies such as U.S.-based, Hong Kong telecom operator PCCW, and Japanese toymaker Sanrio (of Hello Kitty fame). Each day, Outblaze handles e-mail for more than 30 million users. The virus is swamping the company's servers with 80 to 100 messages per second. And it's especially hard to block these viruses. "SoBig keeps changing, so we have to keep changing," he says.

Ironically, as Asia confronts the challenge of these damaging global computer viruses, it may be forced to change some of the ways consumers and businesses use PCs, and the results could be quite positive. Consider: While all parts of the world with Internet connections are exposed to the virus, Asia in many ways is more vulnerable, says Ramasubramanian. Here's why:

Ironically, part of the risk may be due to the relatively advanced state of the Internet in the region. In places like Japan, Korea, and Hong Kong, there are far more home users of broadband than in the U.S. As home users, they don't update their security as frequently as office broadband users.

Moreover, because many of these broadband connections are through cable modems that are, as the operators boast, "always on," it's easier for the virus to spread. Somebody using boring old dial-up simply isn't as fully exposed. "Dial-up is a squirt gun. Broadband is a garden hose," Ramasubramanian says. That makes it much easier for the virus to get in and spread.

Asia may be advanced when it comes to broadband usage, but it's behind when it comes to elimination of pirated software. And that's one more reason why Asia is vulnerable. The popularity of counterfeit software is a major problem throughout the region. In China, for instance, more than 90% of the software is counterfeit. Other countries are not quite as bad, but it's still quite easy to buy cheap knockoffs in the shops of Hong Kong or Bombay. And people using counterfeit software to run their computers are more at risk.

Consider a user of a pirated copy of Windows XP. The Microsoft (MSFT) system allows people using legitimate versions of its software to download security patches from the Microsoft Web site. But somebody using a fake version of XP quickly discovers that he or she is locked out, since Gates & Co. only offer the security updates to licensed users of XP. "If you're running a pirated version of XP, you're stuck," says Ramasubramanian.

The popularity of low-cost PCs in places like China also creates greater potential for infection. While Chinese computer giant Legend commands a big share of the market and foreign players like Dell (DELL) and IBM (IBM) are powerful, too, many Chinese continue to buy parts and assemble "do-it-yourself" (DIY) computers on their own or rely on dealers who assemble the no-name machines. Either way, while these PCs are inexpensive, they often have pirated software installed.

And even if the machines have legitimate operating systems, they often don't come with anti-virus software, which adds to the cost. Hao Ting, the spokeswoman for Beijing Rising Technology Corp. -- which claims to be China's largest antivirus software company, with $12 million in sales last year and 10 million Chinese users of its antivirus software -- confirms that a big problem in China is the popularity of these no-name PCs. "Brand-name computers have antivirus software installed, but DIY computers don't," she says.

The SoBig virus, and the Blaster virus that preceded it in August, have been good for Rising's business. The company got 8,000 toll-free calls at its Beijing-based call center on Aug. 13, compared to 1,000 on an ordinary day. On Aug. 14, the number jumped to 10,000. For the whole week, Hao says, there were 30,000 calls for help from puzzled users. Then, just as the Blaster virus was fading, SoBig hit. Hao says that 90% of Chinese e-mail users have been exposed to the SoBig virus, with 30% actually getting infected.

These virus outbreaks may end up helping the development of the IT industry in China and other parts of Asia by making the risks of pirated software -- and the attractions of name-brand PCs -- more obvious. Of course, some experts hold that the vulnerability of Windows-run machines to the SoBig virus may further encourage Asians to switch to Linux. Ramasubramanian, for one, thinks that's likely. "There are a lot of places moving to Linux for security reasons," he says.

Even before this summer's viruses hit, Chinese and Indian officials were talking up Linux as an attractive, low-cost alternative to Windows. Now they have another reason to make the change. At the very least, the viruses' impact is forcing Asia's PC users to reevaluate how they can improve the security of their home computers. Einhorn covers technology from Hong Kong for BusinessWeek. Follow his weekly Online Asia column, only on BusinessWeek Online

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