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.)"
Re:This seems strangely familiar (Score:5, Interesting)
I think the complaint of the MCPs is Microsoft is demanding payment for product the customer isn't paying for. Specifically, my impression is that Microsoft wants to be payed for the full 3 year contract (over 3 years), even though the customer that purchased the software went bankrupt after the first year. It's a good deal from Microsoft's point of view ...
Discussion point: time to short MSFT? (Score:2, Interesting)
What happened in Iceland seems to be a general liability for Microsoft. It strikes me that almost all of Microsoft's products, whether you believe they're a net good thing or net bad thing for the IT industry and other sectors, have two things in common: 1) they cost money; and 2) they're optional in the sense that there are free alternatives that are at least usable, if not superior.
Faced with an economic downturn that's more or less worldwide in scope, and likely several years in duration, does anyone see any possible way MSFT's revenues can be maintained at current levels? Organizations looking to lower their costs will eventually notice the money hose going to Redmond, and wonder if it can be turned down or disconnected altogether. In almost all cases the answer to that question is "Yes."
It seems that one way to take advantage of a bear market like this one is to identify large-scale players with vulnerable bottom lines and short-sell them. Thoughts?
Re:Discussion point: time to short MSFT? (Score:3, Interesting)
A bridge too far. Just as MSFT shares were relatively stale during the latest bull market (early '06?), they're likely to hold up during this bear market. Why? A hell of a lot of cash on that balance sheet. Were it not for that, I'd say, "Commence firing." But they have a sizeable cushion and flexibility from the war chest they amassed in the 90's.
Re:This seems strangely familiar (Score:5, Interesting)
If the flaming article is right, and if I've understood it correctly, that "cut" was negative: "Microsoft Certified Partners (MCP's), which are local companies that lobby the software, generally at a loss to themselves, as they know that Microsoft's lock-in is powerful enough that they can only get service contracts from the company if they offer a substantial discount on the Microsoft products." In other words, the MS licenses were a loss leader.
There's still a good argument that they're just like any business that gets stuck with unsold inventory when its customers get shot out from under it, but it doesn't sound like the MCPs were on a gravy train.
Of course, any other business whose retail customers disappeared could eliminate the bills from their wholesaler by simply stopping their wholesale purchases.
Re:xkcd (Score:4, Interesting)
This is, of course, when he's not maintaining his circle jerk of shock sites [wikipediareview.com], like 'lemonparty.org', 'jarsquatter.org', 'yourmom.org', 'yellaface.com', and many others, not linked for your protection. What a scary, sad way to make a living.
Then again, he is a scary, sad [encycloped...matica.com] "guy".
Re:This seems strangely familiar (Score:4, Interesting)
It really comes down to this: Honor contracts freely entered into and legally binding, or have a really hard time having companies being willing to sign contracts in your country. There's a lot more at stake here than just Microsoft - especially for a country like Iceland with virtually no manufacturing industry and heavily dependent on trade.
Re:Article text here. (Score:3, Interesting)
I'm at Convergence 2009 -right now-. Not a word has been mentioned of any Icelandic issue, though I doubt it would be.
I'm getting the impression that Microsoft is hurting for cash, however. They're heavily emphasizing expanding sales of their poorly performing products (Sharepoint) and have mentioned abandoning any and all endeavors to greatly improve or integrate the Dynamics line. Definitely getting the "Hold the Fort" impression here.
Which got my thinking: here's a room of a thousand MCPs, about to be matched with 6000 clients, all of which would do well to be without Microsoft. They need a common software base to customize, resell, install and expand as they are now, but the Microsoft tax is hindering them. Many of the MCPs exist solely because of Microsoft's inflexibility.
FOSS needs high-profile alternatives for the Dynamics line, ASAP. This is a money-tree for Microsoft that they've left ignored.
heh @ openoffice comment (Score:4, Interesting)
This switch is easy because not only is OpenOffice.org superior software in every respect, it's also feature-compatible with Microsoft Office, supports reading and writing of Microsoft's file formats Ã" even the ones that Microsoft Office itself no longer supports Ã" and is free to boot, both free as in freedom and free as in price.
To be fair, I used to think sort of the same thing - why use MS Office when OpenOffice is there and does most of that stuff?
Then I got MS Office at work - mostly to combat problems we had with compatibility with our clients sending us 'real' .doc files. OpenOffice would spit out something that didn't maintain the exact formatting, which pissed everyone off.
But the main thing for me is just the sheer awesomeness of the whole thing. I never used 2003 so didn't struggle at all with the new 'ribbon' thing, which I think is great. I find the whole Office package shits all over OpenOffice in terms of usability and performance.
I thought I'd get MS Office and only use it for stuff that had to be interoperable with our clients and use OOo for everything else - but I've switched to using MS Office for everything. Sorry, but it's better.
If you have to interoperate with anyone doing high-end Word stuff you might struggle to switch to OOo. But if you can make EVERYONE you deal with use it ALL at once and the formatting stuff isn't that big a deal - then sure, it'll work for you.
Only 300k people. (Score:2, Interesting)
I feel quite badly for iceland, they are suffering under a significant economic downturn affected by just a few banker types. However, even if/when the entire country goes to Open Source, Microsoft won't even notice the 20k annual licences or so that go with them. Only 300k people live in Iceland. More people live within 10 miles of me, and just about everyone else reading this. They just don't matter in the global scheme of things.
Re:Just so you know what you missed (Score:5, Interesting)
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.
That made me giggle a little. And then depressed that the guy who wrote it believes it.
"Unless, and this is important: Microsoft can redeem themselves towards the Icelandic economy if and only if they immediately reduce the price of all of their products to zero, permanently. Anything less will be an act of non-compliance towards the needs of the Icelandic economy, and can be considered an attack on the nationâ(TM)s sovereignty. Such an attack will inevitably be responded to by the market by way of an across-the-board adoption of free software."
Puuuuke.
Re:Business People ... (Score:3, Interesting)
Hmmmm....
The MCP's promised to pay, but not a single MCP anticipated a total collapse of their economy. That was an unknowable, unthinkable, completely unforeseen circumstance they couldn't have predicted.
What all you MS defenders fail to realize is that when the entire economy of a country goes bad no one in that country has the money to do business as usual, let alone pay their customer's debts. Trying to squeeze blood out of a turnip just doesn't work. All that type of behavior does when applied to human beings is create extremely hard feelings. Saying that someone didn't foresee the collapse of their entire nation's economy is a failing on their part is just stupid, and completely arrogant.
The fact is MS is so arrogant that they think they can bankrupt their own business partners and not get a severe backlash return. I guess they depend on jerks like you to support them, but no thinking, reasonable, human would accept your horse pucky.
BTW, I hope if our own economy collapses you're left holding the bag for things you couldn't have foreseen. I will consider that to be justice after your attitude towards others.
What a jerk!!!
Re:Discussion point: time to short MSFT? (Score:5, Interesting)
On the other hand, they don't really have any place to expand their revenue, unless they can get people in developing countries to start paying for windows, and with hardware prices coming down, they are going to have to start charging less in order to remain competitive, so they are looking at reduced revenue on multiple fronts, and not many places to increase revenue.
Would I short them? Heck no. It can take a long time for all of these to come into play, and as Milton Friedman said, the market can remain irrational much longer than you can remain solvent.
Re:This seems strangely familiar (Score:5, Interesting)
Mr. Chair Thrower, probably because of the hidden macho inside him, turned tables around and made it possible for guys like RMS to declare it is a war against commercial software. Thus OSS supporters would only need to use negative samples against incumbent commercial software, instead of positive samples of their own. If they were trying to get into a market, just only by benefits and positive aspects of OSS products, they would need positive samples of those. Again theory says that you would need (I might need a correction here, but...) from 10%-30% positive samples for a stronghold in the market. This is what they try to hammer in business schools to people: If you do no have a competition, market is naturally yours. If there is competition, every small gain made by new competitor(s) are bigger losses for the incumbent.
In my country BSA tried to claim, as a scare tactic, you can not have a license free software for office usage, and if you do not have a printed license then there is no license. They performed extensive computer scans in license free offices etc. This of course is complete BullCrap(tm). However as people (especially in rural areas) bought the idea for a while, MS hold the market in that sector of economy. But then one or two small companies started giving printed licenses with their OSS based products. They just sold licenses for one tenth or so prices of MS Office. You can guess the outcome. Competitor(s) made a small gain, MS lost ten folds of money.
Re:Screw this (Score:3, Interesting)
Here's what happened, in a nutshell: Microsoft shot their *own* *cheerleading* *squad* in the back. I humbly submit that this is perhaps not an optimal long-term survival strategy, particularly in the middle of a downturn.
This is the intrinsic Epic-Fail of socialist enterprises like Microsoft: in the end, they eat their friends.
Three cheers for Iceland!
Re:This seems strangely familiar (Score:5, Interesting)
Having your bank's own bank accounts frozen by a foreign power (the main reason Iceland's collapsing so fast) probably does count as "completely unexpected"...
Re:Screw this (Score:4, Interesting)
OO.o is just fine for home users that are only writing letters and occasionally making a little speadsheet.
yes.... what do you think most businesses using Word do? I find companies fall into 2 categories: those that use Word for writing little reports, maybe with a table, and lots of auto-generated formatting; and those who use full-on automation forms and scripted features who wish they could just write little reports.
But for business? I'm sorry but Calc is no way in hell comparable to Excel, and there are simply way too damned many businesses that live and breathe in Excel for this to be even a remotely viable solution.
We have an estimate spreadsheet in Excel like this, please please please let us use OO.o so I can dump the useless, awkward, difficult-to-use, I'm-sorry-Dave-those-figures-are-not-correct crock and get on with some work instead!
The first Open Source contry in the world (Score:1, Interesting)
Re:This seems strangely familiar (Score:3, Interesting)
Re:heh @ openoffice comment (Score:3, Interesting)
It's a paradigm shift. We use "Track Changes" quite a bit. It's a frigging nightmare to keep track of the correct revision, who did what, what's the latest version, etc. But everyone is so invested in it that it's impossible to change.
I tried really hard to get a real versioning system going, but really, no one is interested because MS Office is so entrenched it would take a major disaster to change it. Even then, I suspect it would be blamed on us the users rather than a totally broken "collaborative" app.
(We have another "web app" that only works with IE, that's completely broken, but upper mgt, who doesn't use it, has bought off on it completely and they want wider usage, in spite of *every single user* of this app saying it sucks hind tit on a wild boar.)
Re:This seems strangely familiar (Score:3, Interesting)
> [Icelanders] is a whole country of smart, literate people
I was under the impression that Iceland was an island populated by morons that let their own government sell their DNA data to the world (http://www.actionbioscience.org/genomic/hlodan.html)
Those very same people, also started to live on credit, without any concern about the realities of the economy of their island.
> Fucking over Icelanders is not a generally good strategy.
My general feeling is that fucking over Icelanders by politician and business should be seen as an advanced warning about what is going to happen about everywhere else in the world. I should add that, so far, it seems to be a pretty good strategy for the people doing the fucking.
Re:WWBD? (Score:4, Interesting)
From your comment I'm guessing that you are aware that such a thing already exists? If not, it's even funnier.
Search for Björk - Bachelorette (Alec Empire "The Ice Princess And The Killer Whale" remix)
This, I must say, is about the strangest combination of noise/music that I have ever enjoyed. Also, don't ever play this if you want to keep a good relationship with your neighbours. Holy shit, like.
It's just business, m'boy! (Score:2, Interesting)
Excepting that this is Microsoft, there's really nothing new to see here. A contract is a contract, no matter whether if it's with a 500 pound gorilla or with Guido from downtown (though the similarity is striking).
I had a relative that owned a wholesale food delivery service. Business was good, though the profit margin was small. During a small downturn in the economy back in the early 70s he had a couple restaurants declare bankruptcy on him. Unfortunately they were a couple of his biggest customers, and left him with pretty big bills. Well, guess what? He still had to pay his supplier, and that small fact finally drove him under (which would have happened anyway with the advent of Sysco, but that's a story for another day).
I guess the reasons we're complaining are that:
Granted, I like to get in on a little Microsoft-bashing myself, but I think that here they have them by rights. A little compassion would be nice, but perhaps they can appeal to the Gates Foundation for some of that.
Dt
Re:This seems strangely familiar (Score:4, Interesting)
In my country BSA tried to claim, as a scare tactic, you can not have a license free software for office usage, and if you do not have a printed license then there is no license. They performed extensive computer scans in license free offices etc.
And what, exactly, did the BSA give as a reason to perform these scans, I wonder? When they found FOS apps, were they acting on behalf of the free software's "owners" when they said you can't have a license if it's not printed? These BSA goons are insanely ballsy in my experience.
The BSA (I think) tried this sort of crap with one of my clients once. Some guys showed up at my client's office when I happened to be there. They were armed with a blue paper backed document that they told the receptionist was a warrant to inspect any computer and media for "valid licenses". The receptionist, thinking the warrant was valid, let them in but took it back to her boss. The business owner noticed rather quickly that the paperwork wasn't in any way a warrant but, instead, an "agreement" that once signed would grant permission to search everything in the office including personal cell phones. While she was reviewing the document, the goons told me to move away form he PC I was installing a hard drive in and started screwing around with the receptionist's PC without actual permission. The owner was pissed and called 911. The police were rather prompt in responding, too. I guess fake warrants kind of piss them off a bit.
I don't know what, if anything, ever came of it as I had to leave for an appointment with another client. The business owner said the goons left really fast all of a sudden. As best she could tell, a disgruntled employee reported "likely" software piracy. The sad thing is that this was one of the honest people ... some of my clients are knowingly using pirated apps.