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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.)"
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 ...
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.
This is, of course, when he's not maintaining his circle jerk of shock sites, 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 "guy".
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.
Possible; I'm not going to try to predict what will happen with the rest of this recession, but in the last year Microsoft stock lost 50% of its value, which is right in line with the NASDAQ as a whole. If you look at this chart, you can see that Microsoft has become a standard blue chip stock.
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.
Qxe4
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.
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"...
"Software is too expensive to build cheaply"