Microsoft Shoots Own Foot In Iceland

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.)"

Comments

Screw this

[Anonymous Coward]

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.

Re:Screw this

[Timothy Brownawell]

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:Screw this

[Jurily]

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:Screw this

[Tenebrousedge]

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.

This seems strangely familiar

[cstec]

"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.

Re:This seems strangely familiar

[jschen]

Microsoft's customer in this case is the MCP. Unless the MCP goes bankrupt and the contract gets voided (assuming things work similarly in Iceland as in the US), why shouldn't Microsoft be demanding payment? Whether or not the MCP has a good use for the contract isn't Microsoft's problem.

Re:This seems strangely familiar

[Renraku]

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.

Re:This seems strangely familiar

[jschen]

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

[Nefarious Wheel]

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.

Re:This seems strangely familiar

[Arker]

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:This seems strangely familiar

[Mistlefoot]

So Ford leases company A cars. Company A leases them out to end users. The end users go bankrupt and have no need for the cars. Ford forbids company A from for releasing the cars to anyone else as the agreements indicate that the leases are not transferable. Company A says - Ford is telling me that I cannot transfer these cars to anyone else - that Ford is enforcing the agreement that Ford made with the end user - Then Ford can deal with the bankrupt end user. If the agreement is between company A and the end user then they can transfer the licenses and sell them in say, England, or Canada or the US. But per Ford the agreement for money is between Ford and company A and the agreement with what can be done with the car is between is between Ford and the End user. That it's software and not a car doesn't make this correct.

Re:Wait, what?

[Hooya]

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?

I feel so sad for these poor MCPs... NOT!

[Anonymous Coward]

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:Or I will gouge out your eyeballs...

[FearForWings]

BSOD and skull fucking I can deal with but why didn't anyone tell me I could get an STD from Microsoft.
But seriously what the fuck is with the link: ../microsoft-skull-fucks-icelands-economy-contracts-syphilis/ How is any page with this kind of name even remotely legitimate news.

Uhmmm.

[Evil Shabazz]

Certainly I'm no expert in Icelandic contract law, but frankly, why is this any different than any other form of reseller?

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.