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.)"

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slashdotted

[pejyel]

Article has been online for 5 minutes and the site is already down - gotta be a record!

Re:Link to article

[elashish14]

Microsoft has made a business out of selling licenses to run software that can be copied at no marginal cost, this everybody knows. Essentially, they manufacture software, but their product isnâ(TM)t computer code, itâ(TM)s legal code. Contracts.

They make deals with companies, the most common type being three year non-exclusive non-transferable usage rights contracts for the Microsoft Windows operating system and the Microsoft Office software package. A severe amount of licenses for Microsoft Dynamics NAV (formerly Navision Financials, and I shall refer to it as Navision) are sold as well.

The companies and institutions that buy these generally donâ(TM)t buy these directly through Microsoft. Instead, they sell contracts in bulk to Microsoft Certified Partners (MCPâ(TM)s), which are local companies that lobby the software, generally at a loss to themselves, as they know that Microsoftâ(TM)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.

Now, the licensing term is three years, but the licensing fee is made in the form of annual payments. Here is where the fun begins.

Now, say an economy collapses. Say some fifteen hundred companies in your local economy go bankrupt. Now, say that Microsoft comes to collect its annual fee from the MCPâ(TM)s. The MCPâ(TM)s say, of course, âoewait, the company that we sold this license to has gone bankrupt, we shouldnâ(TM)t have to pay.â

âoeAha!â says the suit from Redmond. âoeYou made a contract with us, and another with them. Their inability to uphold their end of the contract does not invalidate your commitment to us.â

This is what Iâ(TM)ve heard from pals in the industry. Pals whoâ(TM)re being screwed over right now. In short, the MCPâ(TM)s have to pay the licensing fees for the bankrupted companies.

The sheer shock of having to do so is starting to hit the Icelandic economy, hard. Already battered by the collapse of almost all privately held financial institutions and the subsequent bust of nearly fifteen hundred companies, Icelandâ(TM)s MCPâ(TM)s are next.

The devil here is in the details. Microsoft was just collecting what was due, forcing an issue that, for most places would be perfectly reasonable to do. Well, no. But it could be argued. Hey, this is about revenue.

But the backlash effect has been astounding. Several of Icelandâ(TM)s largest MCPâ(TM)s are now fighting for survival in a sea already at significant turmoil due to the economic depression. Shit had already hit the fan, but now theyâ(TM)re being skull-fucked by Microsoft to boot.

And what would you do? Well. My sources tell me a lot is afoot. Several MCPâ(TM)s are bailing out, switching over to Free Software and restructuring their business model. Keep the revenue inside Iceland, sell better technical services for less money and yet double their revenue. âoeWhy didnâ(TM)t we do this earlier?â

Why indeed. With Microsoftâ(TM)s stranglehold on the economy, a long series of lock-ins has made life difficult for the dozens of people involved in trying to push free software in Iceland. With the government alone spending in the vicinity of 1 billion Icelandic kronas annually on Microsoftâ(TM)s wares â" a number not even taken together separately in the accounting books, as it is all written up as âoemiscellaneous running costsâ â" itâ(TM)d be a really smart move to switch, if only they could.

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, itâ(TM)s also feature-compatible with Microsoft Office, supports reading and writing of Microsoftâ(TM)s file formats â" even the ones that Microsoft Office itself no longer supports â" and is free to boot, both

Better formatting

[elashish14]

Microsoft has made a business out of selling licenses to run software that can be copied at no marginal cost, this everybody knows. Essentially, they manufacture software, but their product isnt computer code, its legal code. Contracts.

They make deals with companies, the most common type being three year non-exclusive non-transferable usage rights contracts for the Microsoft Windows operating system and the Microsoft Office software package. A severe amount of licenses for Microsoft Dynamics NAV (formerly Navision Financials, and I shall refer to it as Navision) are sold as well.

The companies and institutions that buy these generally dont buy these directly through Microsoft. Instead, they sell contracts in bulk to Microsoft Certified Partners (MCPs), which are local companies that lobby the software, generally at a loss to themselves, as they know that Microsofts 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.

Now, the licensing term is three years, but the licensing fee is made in the form of annual payments. Here is where the fun begins.

Now, say an economy collapses. Say some fifteen hundred companies in your local economy go bankrupt. Now, say that Microsoft comes to collect its annual fee from the MCPs. The MCPs say, of course, âoewait, the company that we sold this license to has gone bankrupt, we shouldnt have to pay.â

âoeAha!â says the suit from Redmond. âoeYou made a contract with us, and another with them. Their inability to uphold their end of the contract does not invalidate your commitment to us.â

This is what Ive heard from pals in the industry. Pals whore being screwed over right now. In short, the MCPs have to pay the licensing fees for the bankrupted companies.

The sheer shock of having to do so is starting to hit the Icelandic economy, hard. Already battered by the collapse of almost all privately held financial institutions and the subsequent bust of nearly fifteen hundred companies, Icelands MCPs are next.

The devil here is in the details. Microsoft was just collecting what was due, forcing an issue that, for most places would be perfectly reasonable to do. Well, no. But it could be argued. Hey, this is about revenue.

But the backlash effect has been astounding. Several of Icelands largest MCPs are now fighting for survival in a sea already at significant turmoil due to the economic depression. Shit had already hit the fan, but now theyre being skull-fucked by Microsoft to boot.

And what would you do? Well. My sources tell me a lot is afoot. Several MCPs are bailing out, switching over to Free Software and restructuring their business model. Keep the revenue inside Iceland, sell better technical services for less money and yet double their revenue. âoeWhy didnt we do this earlier?â

Why indeed. With Microsofts stranglehold on the economy, a long series of lock-ins has made life difficult for the dozens of people involved in trying to push free software in Iceland. With the government alone spending in the vicinity of 1 billion Icelandic kronas annually on Microsofts wares â" a number not even taken together separately in the accounting books, as it is all written up as âoemiscellaneous running costsâ â" itd be a really smart move to switch, if only they could.

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, its also feature-compatible with Microsoft Office, supports reading and writing of Microsofts file formats â" even the ones that Microsoft Office itself no longer supports â" and is free to boot, both free as in freedom and free as in price. The only important difference is that OpenOffice.org doesnt support all of Microsoft Offices weird macros, and it doesnt come with a drop-in replacement for Microsoft Access, the only database software