Microsoft Shoots Own Foot In Iceland 476
David Gerard writes "The Microsoft Certified Partner model is: an MCP buys contracts from Microsoft and sells them to businesses as a three-year timed contract, payable in annual installments. Iceland's economy has collapsed, so 1500 businesses have gone bankrupt and aren't paying the fees any more. But Microsoft has told the MCPs: 'Our deal was with you, not them. Pay up.' The MCPs that don't go bankrupt in turn are moving headlong to Free Software, taking most of the country with them. (Warning: link contains strong language and vivid imagery.)"
MCP Glamour (Score:3, Insightful)
I bet they're proud of that Microsoft partner banner at reception...
Screw this (Score:5, Insightful)
You know what, I'm not even going to bother clicking on a link composed of obscenities, even if it is about Microsoft making another PR blunder.
I'd like some anti-Microsoft news that at least appears reputable, and not overly sensationalized "ZOMG Balmer blew up M$ eats babies" crap like the stuff I've seen here for the past few weeks.
Give me something to read, please, not something designed to assimilate me into another angry mob.
This seems strangely familiar (Score:5, Insightful)
"Hey, I only joined the military for the free college tuition. I never said anything about shooting people!"
These MCP's were all happy to sign up, resell MS's products and take their cut for doing almost nothing. Now they're not selling and they don't want to pay their bill? Puh-lese. The cheese section is apparently in Iceland, along with the whine.
Business People ... (Score:4, Insightful)
Business People tend to remember the company that pushed them into bankruptcy. They don't forgive and forget easily.
I can't see everyone "just switching" to Linux, but this could create much motivation to try. Survival in business is a strategic imperative. If someone threatens that survival, then business people tend to connect the dots, and adapt accordingly.
Re:This seems strangely familiar (Score:5, Insightful)
Shitcan middle management (Score:4, Insightful)
From TFA: "So with the Navision thing going on the situation normally pans out like this: Company/institute X switches to Free Software nominally, installing Ubuntu and OpenOffice.org on all computers, except those of the top management who need to have access to Microsoft Navision Financials. The middle management then complains that theyâ(TM)re important enough to have Microsoft Office and that they feel devalued as employees for being forced to use the free, open alternative that doesnâ(TM)t suck. Eventually the middle management gets their way, and then the lowest employees start heaving the same sighs. Before you know it Company/institute Xâ(TM)s Free Software policy is a piece of paper rotting in a drawer somewhere."
Adapt. Improvise. Overcome. Fire the entrenched middle managers. If they don't want to liberate their departments from this morass, save their countrymen a pile of kronas, and just generally improve their situation, well...who needs 'em?
Time for them to head to the conference room where Bob Slydell and Dom Porterwood are waiting.
Re:Screw this (Score:5, Insightful)
I'd like some anti-Microsoft news that at least appears reputable, and not overly sensationalized "ZOMG Balmer blew up M$ eats babies" crap like the stuff I've seen here for the past few weeks.
You're new around here, aren't you?
Or more likely, been around long enough to get tired of all the childish crap and instead want sane discussions about what happened and sane arguments over what to do about it.
Re:This seems strangely familiar (Score:4, Insightful)
From a legal and short term financial standpoint, sure. However, the end result will be that established partners will themselves go belly-up, or that they'll try to find an alternative. So it is Microsoft's problem, in so far as it changes their future business prospects in the region.
Re:This seems strangely familiar (Score:4, Insightful)
Well... yeah! I know it's a bizarre concept in today's world trillion dollar bailouts seem the norm, but prior to six months ago, if you signed up for a three year contract you were required to pay for three years. Why should they be treated any different from other failed businesses? No one was holding a gun to their head making them buy those contracts.
Re:This seems strangely familiar (Score:5, Insightful)
I'm sure they'd all like to be paying their bills, but when you set up a fiscal triage line, how important do you think payments to a multi-billion dollar corporation that sells software is going to be compared to say, keeping the lights on and paying the employees?
This is actually quite common in business. Just like how you or I would pay for electricity and food over our credit card bills if we wanted to survive.
Companies and countries without money... (Score:3, Insightful)
...looking for free alternatives to overpriced stuff. News at 11.
Nothing new really. We know Microsoft is going to die sooner or later. They've had their run in the industry but just like the RIAA their current models don't work well anymore in the current economies so they'll either adapt or die kicking and screaming in the courtroom. They chose the latter (just like the RIAA) because it seems to be the easiest way out (short term goals). The other way requires retooling and reshaping a lot of company structure, eliminating unnecessary management.
Re:Article text here. (Score:5, Insightful)
Quote "The easiest switch would be to go to OpenOffice.org from Microsoft Office. This switch is easy because not only is OpenOffice.org superior software in every respect ...".
Looks like a nice impartial artice.
Re:This seems strangely familiar (Score:3, Insightful)
However, who wants customers if they're not going to pay?
A non-paying customer moving to OSS is not a lost sale.
Re:This seems strangely familiar (Score:5, Insightful)
Where's the line between Force Majeure and simply a regrettable business decision? Globally, lots of people in all walks of life are suffering from their decisions (whether sound at the time or not) made during better times that are haunting them in these rough economic times. What about this situation is unique to the MCP? How would the situation look if we allowed people across the board to declare Force Majeure?
As for no salesmen = no sales, it's commonly accepted that Microsoft is a de facto monopoly. If we take that to be true, then there may not be much cost to MS in hanging the MCPs out to dry. The MCP's customer still needs the MS product, and a new MCP undoubtedly will fill in the void when times get better.
Re:This seems strangely familiar (Score:5, Insightful)
The country controls their own court system.
A company that's hostile to all companies in your country is probably not going to do well, regardless who is or is not right.
And it all comes down to: Honor contracts to a foreign company with a failing financial market, or ignore contract disputes and switch to Linux and FOSS.
Re:This seems strangely familiar (Score:5, Insightful)
Oh, wait...
Re:Screw this (Score:4, Insightful)
Wait, what? (Score:5, Insightful)
The MCPs that don't go bankrupt in turn are moving headlong to Free Software
Software resellers are moving headlong to Free Software? What is their business model supposed to be?
I'm going to assume this line is trying to say "The MCPs that don't go bankrupt in turn are going to bankrupt themselves for the Free Software cause, for no particular reason".
Re:This seems strangely familiar (Score:5, Insightful)
As for no salesmen = no sales, it's commonly accepted that Microsoft is a de facto monopoly. If we take that to be true, then there may not be much cost to MS in hanging the MCPs out to dry. The MCP's customer still needs the MS product, and a new MCP undoubtedly will fill in the void when times get better.
Exactly correct. Whereas there is an effective water monopoly in place as a supplier, resellers are infinitely replaceable. One man goes to the wall, another will take their place. No martyrs, only failures.
A good model for others to follow! (Score:1, Insightful)
I think Open Source Software is great, I recommend them to any client that can safely be moved away from Windows. Most homes and business, only need an office suite (OpenOffice.org), a Web browser (Firefox) and just few other applications, which have a parallel in the Open Source world.
To keep them comfortable, during this transition, I usually install the Linux along the Windows partition, so they have access to both. Most have decided to stay with Linux!!!
I do strongly encourage them to support the said OSS, however much they can. It's the ethical thing to do.
Good Luck...
Re:This seems strangely familiar (Score:5, Insightful)
This remark is particularly insightful, IMHO. However, the goods WERE sold. The question is more along the lines of "why can't they simply repossess them?"
THEN you get to the "Oh, wait..." :)
Re:This seems strangely familiar (Score:4, Insightful)
In short, they can choose to have no money, or some money. They can't chose to have all the money though. Rationally, they should choose "some". In fact, they appear to have chosen "none".
Re:Wait, what? (Score:5, Insightful)
TFA isn't a masterpiece of unbiased discourse; but that part is fairly clear.
Re:Business People ... (Score:3, Insightful)
More correctly: Business People tend to remember the people they blame for pushing them into bankruptcy - their own failings they tend to forget.
In this case, the MCP seems to have forgotten they signed a contract saying they would pay.
Re:This seems strangely familiar (Score:5, Insightful)
You have a point. Clearly MS is within their rights in terms of the contracts.
However a wise businessman in their position would be willing to "work with" their "partners" under such circumstances. Sticking to their rights here will blow up in their face, and cost them in the long run.
Which is really a good thing, anyway, both for Iceland and the world, if it results in increased Free Software awareness, usage, and development.
Re:Wait, what? (Score:5, Insightful)
From what I gathered from the article, most MCPs were selling licenses at a loss anyhow since that is how they could compete with the other MCPs - all with the hope that they could make that up in support contracts.
If that's true, then they were starting with a loss - and sold support.
Why not start at $0 and sell support?
Re:This seems strangely familiar (Score:4, Insightful)
I feel so sad for these poor MCPs... NOT! (Score:5, Insightful)
So let me get this straight; several MCPs in Iceland decided to dance with the devil, buying three-year software contracts from Microsoft for Office and some other applications. After purchasing said contracts directly from Microsoft, these MCP then turned around and sold the same contracts to other companies in Iceland, charging an annual fee to those companies while, I imagine, paying Microsoft on some type of installment plan. Now, when the economy tanks and the folks who paid last year aren't around this year when the bill comes due, these MCPs are surprised, shocked if you will, that Microsoft wants them to pay for the contracts they purchased directly from Microsoft? Truly, am I missing something here?
It doesn't take even a back-of-the-envelope calculation to see that, if you buy a three year contract from vender 'A' and sell it with an annual maintenance fee to customer 'B', you have in fact become a creditor for customer 'B'. It should therefore come as no surprise to these MCPs that, yes, Microsoft really does want them to pay for the contracts they purchased from Microsoft. I can't imagine anyone at Microsoft stuck a gun to their heads and said, "Sell Microsoft software contracts or die." If you dance with the devil, and willingly did business with Microsoft, than you'd better be prepared to pay for the software contracts you purchased from the company.
Perhaps I'm just not enough of a Microsoft-hater, but I fail to see the 'skull fucking' here. What I do see is an angry rant from, I assume, someone who's likely receiving calls from bill collectors in Redmond. I'm sorry that MCP thing didn't work out for you, and if you want to switch from plugging Microsoft products to promoting Open Source Software, than more power to you. But please don't ask me to overlook the poor business decision you made in becoming a de-facto creditor to your customers. If you don't like the way Microsoft does business in Iceland, you don't have to join their game. Take your marbles and go play in some other park with rules more suitable to your taste.
Re:foot shooting (Score:3, Insightful)
Alas, looking is not enough. I've been a great fan of FreeBSD for many years (like you, I see), and a dozen or so years ago I could have sworn that by now we would all be running *BSD and Linux. However, for normal people (those who have no idea what 'make' or 'kernel' mean) being ticked off is not enough. They have to have a viable alternative - one that does not require extensive tinkering. That also means a wide availability of common business and entertainment software. Even folks like me give up when faced with reality. We need to share our computers between work and fun. Good luck telling your company they should switch all software to open source (please don't give me anegdotal evidence of such things happening - in the scale of the business landscape, they are unnoticeable).
Even for personal use, I am not so sure I want to switch to all *BSD/Linux. I can get zsh and all common utilities (including vi) running on my Windows machine along with all business software. I cannot get the reverse if I change the OS. Sorry, Gimp is not Photoshop, and nothing in the open source comes close to Adobe suites (an advice to use LaTex instead of Framemaker gets the rest of your arguments automatically disqualified).
I think the penetration of the natural space for open source - server space - was a great success. Desktop is a different game, and I am not sure that the current open source development model is well suited to that space. Strangely enough, the "If you don't like it, why don't you write it yourself" advice does not resonate too well with most normal users.
Re:This seems strangely familiar (Score:4, Insightful)
They made their bed (Score:4, Insightful)
They'll lie in it.
If some employees of their company go on to found a company that's not so foolish, they will have learned.
But the company that danced with the devil and doesn't want to pay? Why would you trust them now? Maybe tomorrow they'll decide the service contract you paid them for requires too much effort or cost to fulfill.
As we used to say back when I was in this game, a deal is a deal is a [expletive deleted] deal.
Re:This seems strangely familiar (Score:3, Insightful)
True, country controls its own court system, and is free to favor local companies. However, if said country has also made international commitments and is part of such trade organizations, all things being equal, other countries would expect said country to treat legal entities from other countries fairly.
Otherwise they risk ruining relationships with the trade organizations and/or its member countries, and losing credibility in having legal entities from said country being treated equally fairly abroad.
Re:Or I will gouge out your eyeballs... (Score:5, Insightful)
But seriously what the fuck is with the link:
Comment removed (Score:4, Insightful)
Re:Screw this (Score:5, Insightful)
this article should have in giant letters at the top "WRITTEN BY A TOTAL ZEALOT!!!" in giant red letters, so those of us who would actually care about the facts wouldn't bother.
We already have that.
Posted by kdawson
Re:Just so you know what you missed (Score:5, Insightful)
I particularly liked the part about how, unless Microsoft permanently reduces the cost of all their software to zero it's an attack on Icelands sovereignty.
It's not, however it's a good reminder not to rely on foreign companies too much.
As retarded as he sounds writing that, he might have a point: If they can't pay, they're likely to migrate to free alternatives.
Uhmmm. (Score:5, Insightful)
If I am a local grocer (the MCP) in a town, and I have just bought 10 tons of corn from the local farm (Microsoft) on agreement to pay for the corn over the next 3 years, but then suddenly all the area folks (other local businesses) cannot afford to buy corn from me anymore - what kind of nonsense suddenly absolves me of having to pay for the corn?
Sure, maybe Microsoft could be doing more negotiating on the contracts to help keep people in business - but guess what? They're a business too. Just because you don't like them doesn't make their contracts any less valid. Just because it's software and not a commodity doesn't make the contracts any less valid. If you take on the risk (the agreement to pay over 3 years, assuming you have revenue to pay for those 3 years), and your risk goes sour - you damned well better have to eat your sour grapes.
Incidentally, that's what is wrong with the bailouts in the US - the US goverment - ie, G W "Idiotboy" Bush and his Republican cronies told all the Wall Street CEOs - take on all the risk you want with other peoples' money, we got your back if it goes bad.
Re:This seems strangely familiar (Score:5, Insightful)
Re:This seems strangely familiar (Score:3, Insightful)
But we know that for years now, MSFT has been frantically trying to prevent the use of OSS by "important" organizations. Once a few of them start actually doing it, and find that they can live well with it, also paying customers might defect. That's why MSFT has been practically giving away their software to those that don't want to pay if they are deemed important enough customers (such as government organizations).
Though the tone of the article is inflammatory, the point is that MSFT is taking a risk and maybe even breaking its own policies of the past here; once the icelanders proove that one can do business with OSS just as well, this will create a dangerous precedence for them; at least in Iceland and maybe also elsewhere.
Re:This seems strangely familiar (Score:1, Insightful)
What you're missing is the fact that they don't need to buy back unused contracts, they can print more. Now if these were physical goods we were talking about you would have a point.
Re:Screw this (Score:5, Insightful)
Aw come on now. If you call this childish, what would you say to that Cat Agreeing to an EULA story that got nearly 1000 replies.
At least that story was kinda funny in a perverse way. The thought of someone taking legalese nonsense and trying to respond with their own nonsense sticks it to the legal profession and pokes fun at the corporations trying to control software this way. The only thing that makes it kinda sad is that it went beyond a joke and is wasting real life legal resources.
Today's story on the other hand isn't humorous. It's just a childish profane rant demanding a megacorp give away their sofware.
Only 350,000 Icelanders, make no dent on MS (Score:4, Insightful)
The population of Iceland is less than 350,000, barely as big as a medium-sized town. It's less than a single pixel on Microsoft's profit graph. I bet that not only do they not care about Icelandic MCPs going bust, but they don't care if the whole country - all 350,000 of them - does or does not use Microsoft software.
Re:Screw this (Score:2, Insightful)
Re:This seems strangely familiar (Score:3, Insightful)
Insurance companies also include force majeure as a get-out clause in their policies.
You don't think it's remotely possible that "complete collapse of all privately-held financial institutions" would be classed as Force Majeure by the insurance company, hmm?
Re:Or I will gouge out your eyeballs... (Score:2, Insightful)
I don't know why you're all so anti-microsoft! I mean, they can't let the complete collapse of a country's economy affect their bonuses, you shelfish fucks!
Re:Only 350,000 Icelanders, make no dent on MS (Score:3, Insightful)
Re:Screw this (Score:5, Insightful)
Software was originally given away freely. It's important to remember that.
Closed-source and/or for-profit software also has its place, but Microsoft might do well to (again) imitate Apple.
Also, in today's existence, it's difficult to not carry some measure of anger against the 'megacorp'. What have they touched that is not tarnished? What have they given us that is not tainted? Men have always harmed other men in pursuit of their own self-interest, but never is this more soul-less or harsh than when the ultimate goal of the organization is Profit.
Re:This seems strangely familiar (Score:3, Insightful)
[I]f one is beholden to continuous payments to a third party, it's a good idea to get [insurance]. This is basic financial disaster management - plenty of businesses will sit down and think, "what would happen if the building caught fire?", but few will think, "what happens if my customers suddenly can't pay?"
Also, many will get business insurance but few will think "what happens if AIG goes bust?" :-)
Re:This seems strangely familiar (Score:4, Insightful)
They might still have a right to get money from the middleman, but doing so could come with some bad press. They could request enough that the middleman goes bankrupt as well, and they may get what money is currently there. Otherwise they could accept that the middleman pay at a pace they can possibly do without going bankrupt. In the end the slow pace may give them more money.
An interesting question is whether the middleman could just sell those licenses to other companies now. Microsoft would probably say that is not allowed. I don't know if the court would find a contract valid if it requires payment for a license that is only allowed to be used by one company that is now bankrupt. If they actually are allowed to resell the licenses to other companies, that could flood the market with cheap licenses, probably something Microsoft does not want. The easy way to avoid that would be to accept that the contracts can be terminated without payment in this scenario. The other ways are to claim it is against the contract, or make the company go bankrupt with Microsoft being the only creditor with an interest in picking them up (and valuing them a lot less than they originally were paid for them).
Of course I'm no expert in Icelandic law, so this is all just guesswork. I wonder if Microsoft knows Icelandic law well enough to predict how this would turn out.
But I can't see this being good for Microsoft's sale of licenses in this way in the future, which should matter a lot more to them than what little money they can get from a few Icelandic companies.
Re:Screw this (Score:3, Insightful)
It's better than "some guys I don't kow" - which is what most PR flacks are - and yet they're given credence because they're PAID shills.
Where's the logic in that? It's the same as the "professional financial advisors" hyping the stock market last year - "buy on the dips / dollar-cost averaging - you can't lose", whereas dollar-cost averaging is the surest way to lose, it's there so dumb fucks who can't do math continue to buy stocks and keep the market liquid so those with a clue can sell out.
How is this Microsoft's fault? (Score:2, Insightful)
MCPs and Banksters (Score:4, Insightful)
It doesn't take even a back-of-the-envelope calculation to see that, if you buy a three year contract from vender 'A' and sell it with an annual maintenance fee to customer 'B', you have in fact become a creditor for customer 'B'. It should therefore come as no surprise to these MCPs that, yes, Microsoft really does want them to pay for the contracts they purchased from Microsoft. I can't imagine anyone at Microsoft stuck a gun to their heads and said, "Sell Microsoft software contracts or die." If you dance with the devil, and willingly did business with Microsoft, than you'd better be prepared to pay for the software contracts you purchased from the company.
You must have noticed the financial party we have been having for the last few years. Why should MCPs be any more sensible than the rest of us? Being sensible wasn't fashionable. The MPCs, like almost everybody else, have been busy buying into the mass delusion that boom lasts forever and recession is a thing of the past. When people are partying anybody being sensible isn't listened to and that usually doesn't change until the partygoers get a major reality check such as being arrested for drunk driving. In Iceland that reality check came in October 2008 in the rest of the world it will probably sink in more slowly.
Perhaps I'm just not enough of a Microsoft-hater, but I fail to see the 'skull fucking' here. What I do see is an angry rant from, I assume, someone who's likely receiving calls from bill collectors in Redmond. I'm sorry that MCP thing didn't work out for you, and if you want to switch from plugging Microsoft products to promoting Open Source Software, than more power to you. But please don't ask me to overlook the poor business decision you made in becoming a de-facto creditor to your customers. If you don't like the way Microsoft does business in Iceland, you don't have to join their game. Take your marbles and go play in some other park with rules more suitable to your taste.
What usually happens in a situation like this is that the distributor and the supplier reach an agreement where some of the debt is perhaps written off and the rest is paid back according to some sort of payment plan. The idea being that you as a manufacturer of a product are better off taking a hit which isn't good but results in the survivial of the network of distributors that you have built up over decades. If you don't do this the competition will swoop down and soak up your market share faster than you can say "negative EBITA". With a whole slew of IT people being unemployed you can rest assured that if Microsoft starts killing off MCPs, dozens of FOSS start-ups will pop up like mushrooms on a forest floor over the next few years to take their place and compete with Microsoft. These MCPs are companies with massive experience in selling MS products, servicing them and lobbying government into buying MS products instead of deploying FOSS. For Microsoft the party is over for the time being just like it is for their customers. Over the last few years Microsoft's corporate customers have become accustomed to burning through borrowed money as if it was firewood but over the foreseeable future that will change. Businesses will be lucky if they can get any credit at all and that, more than anything else, will make FOSS a more attractive option. I am not saying that FOSS will take over the European software market but Microsoft could lose some ground if they don't play their cards right.
The funny thing is (Score:3, Insightful)
Re:This seems strangely familiar (Score:3, Insightful)
On the other hand, this "international economy" thing makes it more than a little dangerous to dishonour contracts with a foreign company by flouting the rules.
Other countries may do the same back to you in retaliation, which may cost more than just paying up in the first place - depending on your relationship.
Re:This seems strangely familiar (Score:3, Insightful)
I wouldn't be angry either, but I would be very concerned... Voiding properly executed contracts without a legal basis for doing so is a very bad sign.
Re:Screw this (Score:5, Insightful)
> Yeah, the world would be such a happy fucking place without corporations.
I'm a Reagan conservative when I'm not all the way out in Ayn Rand territory. And I'm starting to think the corporation, at least as we know it, is a mistake. As soon as the founder is gone some clueless twit with an MBA is given control over billions in capital without any clue how capital is made or grown, no responsibility if (usually when) he fails or commits a major ethical lapse and a golden parachute when he screws the place up so bad it becomes takeover fodder. Stockholders have no moral hazzard other than their financial stake, which is often traded purely on such a short term horizon that the corporation is forced, even if the CEO isn't an idiot, to do stupid short sighted things.
The public chartered corporation once served a purpose in that it allowed huge capital intensive projects to be undertaken in the nominally private sector. There is still a need for something that serves that purpose but the rules need to be adjusted such that only such big infrastructure projects will be attractive investments.
Re:This seems strangely familiar (Score:3, Insightful)