Courtyard House: A Major Power's Heavy Industry, Hand-Crafted Nuclear Fusion

Summer 1982, New York.

IBM headquarters, the Armonk Building.

Inside this building, known as the heart of the "Blue Giant," a strategic deployment meeting is currently underway targeting a rival in the Far East.

On the projector in the conference room, a demonstration video of Red Star Computer and WPS system was being shown.

"Gentlemen."

IBM's current CEO, John Opel, pointed to the screen with a somber expression, saying, "We must admit that we have fallen behind in the personal computer (PC) field."

"This Chinese company called 'Red Star' has not only come up with a more advanced graphical interface system than us, but what's even more frightening is that they are building a completely new ecological barrier."

Opell's voice was low and somber. "If the WPS format becomes the global office standard, then IBM's typewriter business will be completely wiped out, and our PC business will also be unable to make any progress."

"We can't wait any longer."

The vice president of marketing stood up, a belligerent glint in his eyes. "We must fight back immediately. Project Chess (the real codename for the IBM PC) must be released ahead of schedule."

"But... our operating system isn't ready yet," the technical lead hesitated. "Bill Gates from Microsoft said that DOS 1.0 still has a lot of bugs."

"I can't worry about that anymore."

Opell slammed his fist on the table. "Hardware first! We're going to leverage IBM's massive supply chain to wage an unprecedented price war!"

He held up one finger and drew a line in the air:

"Priced at $1565."

A collective gasp filled the conference room.

$1565!

This was an incredibly low price at the time. Keep in mind that Red Star Computers sold for $1999 overseas, while Apple's Apple II cost a whopping $2600.

IBM is using the power of capital to squeeze its competitors to death!

"We need to let that Chinese man surnamed Su know."

Opell sneered, "Any clever tricks are utterly useless against an industrial assembly line. I'll make sure Red Star Computers... doesn't sell a single unit!"

……

A month later, the global PC market was plunged into a bloodbath.

IBM PC 5150 officially released.

With the Blue Giant brand name and an astonishingly low price, this bulky-looking machine quickly swept the European and American markets.

The newspapers were full of IBM's big names: "The real computer comes from IBM."

At the same time, the crackdown on Red Star Computer began.

Supply chain disruptions, distributor defections, media smear campaigns...

Hongxing Electronics' overseas orders plummeted by 40% in a week.

Beijing, Red Star headquarters.

Old Chen was as anxious as an ant on a hot pan, pacing around Su Zheng's office.

"Minister Su! Something terrible has happened!"

Old Chen waved a telegram, "The distributors in the US can't hold on any longer! IBM is too ruthless, $1565! That's practically selling at a loss! Even though our costs are lower, with tariffs and shipping, we'll need to sell for at least $1800 just to break even. How are we supposed to fight this?"

"Furthermore, they also partnered with software companies."

Ye Xinyi added from the side, "Lotus and WordStar have both announced that they only support IBM PCs. None of the mainstream office software currently on the market can be used with our Red Flag OS."

"This is ecological blockade."

Su Zheng sat calmly in his chair, toying with a pen in his hand, seemingly unhurried.

"They want to cripple us with a hardware price war, and then lock in users with software compatibility issues."

Su Zheng smiled. "Standard capitalist tactics. Old-fashioned, but very effective."

"Should we lower our prices too?" Old Chen gritted his teeth. "At worst, we'll stop making a profit! For market share, we'll fight them to the death!"

"No."

Su Zheng shook his head. "Competing with IBM in terms of cash flow is suicide. Their annual revenue is higher than our country's GDP (exaggeration). We can't compete on price."

"So what do we do? Wait to die?"

"Who said we're going to compete on price?"

Su Zheng stood up and walked to the whiteboard.

He drew two circles on the whiteboard.

One of them said "IBM" and inside it said: Hardware $1565 + DOS $40 + Lotus $495 + WordStar $495 = Total price $2595.

The other one says "Red Star" and only contains: Hardware $1999.

"Old Chen, did you understand?"

Su Zheng pointed to the formula, "IBM machines are cheap, but they're 'bare metal.' Users buy them just a pile of metal. To get anything done, they need to buy an operating system and office software. All that software combined costs more than the computer itself!"

In this era when software is extremely expensive, a genuine copy of Lotus 1-2-3 costs $495, equivalent to a month's salary for an average worker.

"And we..."

Su Zheng picked up a red marker and wrote two words heavily inside the circle of the "red star":

All Free.

(Completely free)

"Starting today, we are announcing a new policy."

Su Zheng's voice wasn't loud, but it carried a domineering air that could overturn the world.

"All users who purchase Red Star computers will receive a lifetime free genuine copy of 'Red Flag OS', as well as... the complete 'Red Star Office' suite of office software (including WPS, Spreadsheet, and PowerPoint)."

"We want to tell the world: software should not be an expensive luxury. It should be... the dowry of hardware."

"free?!"

Old Chen was stunned. "Minister Su, that was written by hundreds of programmers working day and night! Just like that, we're giving it away? How are we supposed to make a living then?"

"Rely on service."

Su Zheng's eyes gleamed with the wisdom of the future—a dimensional reduction attack from the Internet thinking of decades later.

"We don't sell software discs, we sell 'Red Star Service'."

"Enterprise users want secure data backup? Pay up, and we'll build you a data center."

"Government users want customized development? Pay up, and we have a team of experts."

"If you're a regular user and want to learn how to use a computer, pay the fee, and we offer training and certification."

Su Zheng laughed: "That's what they call... the wool comes from the pig's back."

"IBM wants to make money by selling metal boxes? Then we'll turn software into water and air. Let's see how those software companies can compete with IBM then!"

……

A week later, in West Germany, the Hannover Electronics Fair (the predecessor of CeBIT).

This is Europe's largest electronics trade fair. IBM and Red Star Electronics' booths faced each other directly, creating a tense atmosphere.

At IBM's booth, the sales manager was enthusiastically promoting the product:

"Our machine is only $1565! The lowest price in the world!"

The onlookers were intrigued: "How much would it cost if I installed a spreadsheet software to calculate my bill?"

销售经理：「呃……您需要购买Lotus 1-2-3，售价495美元。还需要买DOS系统，40美元。总共……2100美元。」

The customer's smile vanished: "So expensive?"

Just then, a commotion suddenly broke out at the Red Star booth across the street.

A huge banner hung down, with a line of large characters written in German, English, and French:

Buy One, Get All Free!

(Buy one get the whole set free!)

Su Zheng stood on the stage, holding a Red Star computer in his hand.

"$1999!"

He shouted, "This isn't just a computer. It includes $2000 worth of top-of-the-line office software! It includes lifetime free system upgrades! It includes a complete graphical interface!"

"What you've bought isn't just parts, it's a complete productivity tool!"

"Just plug it in and it works! No extra cost required!"

boom!

The crowd instantly switched sides.

Anyone can do the math.

A complete solution for $1999 versus a patchwork solution for $2595. Plus, Red Star's WPS has a graphical interface, making it a hundred times better than that code-heavy DOS!

"I want the red star!"

"To hell with IBM! To hell with Lotus!"

Customers flocked to Red Star's booth like a tidal wave. IBM's sales manager stood in front of the empty booth, his brochures scattered all over the floor, looking like an abandoned clown.

……

The outcome of this battle was even more disastrous than Su Zheng had anticipated—for IBM, in particular.

It's not just that the hardware isn't selling.

Even more frightening is that Su Zheng's "free strategy" directly overturned the tables of software companies like Microsoft and Lotus.

Once users get used to the free and easy-to-use WPS, who would spend $500 to buy that difficult-to-use Lotus?

Bill Gates slammed down the phone in anger in his Seattle office.

"That Chinese man is a madman! He's a destroyer of the industry! He's ruining the future of the software industry!"

Despite the criticism, Microsoft had to announce overnight that DOS would be priced at $10, but this did nothing to help the overall situation.

Three months later.

IBM's financial report shows that its PC division suffered significant losses.

Although hardware sales barely met the target, the return rate was as high as 30% due to the lack of software ecosystem support.

Red Star Electronics, by adopting the "hardware and software integration + service fee" model, not only made money on hardware, but also amassed a staggering $200 million in orders in the enterprise service market.

Those major IBM clients—General Electric, Boeing, and Citibank—all switched to Red Star. This is because Red Star offered more than just computers; it provided a complete suite of digital transformation services.

……

Beijing, late autumn.

Su was walking through the Diaoyutai State Guesthouse, where fallen leaves covered the ground.

An American in a suit was standing there waiting for him.

He is a vice president at IBM. Compared to his high spirits a few months ago, he now appears somewhat hunched over.

"Mr. Su."

The vice president held out his hand, his voice bitter, "We... admit defeat."

"Oh?"

Su Zheng didn't shake hands; he simply put his hands in his pockets, gazing at the distant red leaves. "Isn't IBM trying to make me disappear from the face of the earth?"

"Those were Oppel's personal remarks and do not represent the board of directors."

The vice president wiped his sweat. "The board has already fired him. We're here to discuss... cooperation."

"cooperate?"

"Yes. IBM wants to obtain a license for 'Red Flag OS'. We are willing to pre-install Red Flag software on IBM PCs."

This is practically a surrender statement.

The proud blue giant finally lowered its arrogant head.

"Can."

Su Zheng nodded. "However, the licensing fee..."

He held up five fingers.

"Fifty million?" The vice president breathed a sigh of relief.

"No, $50 per machine."

Su Zheng smiled. "And, we need to add a line of text to the boot screen."

"What character?"

"Powered by RedStar".

The vice president's face turned deathly pale instantly.

This is not just about making money; it's about forever branding IBM with the red star!

But he had no choice.

If they don't agree, IBM's PC business will be completely dead.

"make a deal."

The vice president signed the contract with trembling hands.

Watching the Americans walk away, Su Zheng took a deep breath of the crisp autumn air.

"The Blue Giant bowed his head."

Ye Xinyi appeared behind him at some point and spoke softly.

"yes."

Su Zheng turned around and looked into the distance.

"But there is an even bigger giant watching us."

"Who?"

"The Bear Country"

Su Zheng narrowed his eyes, "And... that US military-industrial complex hiding behind the scenes."

"The commercial war is over, but the technological blockade will only get tougher."

"We need more money, more foreign exchange, to buy more sophisticated machine tools and to manufacture faster chips."

"Where will the money come from?" Ye Xinyi asked.

Su Zheng took a small game cartridge out of his pocket.

It has several colorful squares printed on it.

"From it."

Su Zheng's lips curled into a mysterious smile. "In the next chapter, we're going to make the whole world go crazy for these little cubes."

"We want to use 'electronic heroin' to harvest wallets all over the world."

……