Slashdot Mirror
Microsoft Makes Millions Renting Campus Space to Vendors
theodp writes "In a move that would do Bill Lumbergh (YouTube homage) proud, Microsoft has been pulling in about $25 million a year through its unusual practice of charging its vendors for occupying office space on its campus while working on Microsoft projects, according to the real estate firm that manages the program. And that's before a planned July 1st rate increase that Microsoft informed vendors of earlier this week, which will boost the 'chargeback' rate for its 'shadow workforce' from $450 per month ($5,400 per year) for every workstation to $510 per month (or $6,120 per year). So, is there a discount if you're moved downstairs into Storage B?"
Red meat of Slashdot is getting people riled up about Microsoft.
Would it be news if Microsoft paid vendors $450 less per month than company B? Now, wouldn't it be even less news if vendors took this into account and adjusted their fees upwards by $450? This is just an accounting trick that probably has no real world impact on the vendors.
Business needs to see that needless filling of cubes just because is a waste of money of their own as well as their employees. Telecommuting is the responsible way of the future for environmental and quality of life reasons for the community at large.
Yahoo's failure was one of management, not of telecommuting itself.
I've worked in companies where every project was required to pay internal IT dept bills for services rendered, so what?
This is an accounting mechanism that forces projects to account for all costs Bourne by the corporation in support of the project. I suspect internal projects are also billed at an equal amount, but the bills remain internal.
It helps facilities lose the stigma of being a cost to the organization and instead it is funded by the internal groups that consume their resources.
At $450/540 a month, that's a pretty good rate for a piece of real estate, a desk, unmetered power and Internet access... Can I feta desk in MS office space for the same price? I currently rent a small 240 sq ft office for my work and it runs $525 for the space, plus utilities & ISP costs - $540/month all-in in an MS facility sounds good to me.
Ken
OK, so you have a worker occupying workspace, using power, air conditioning, network/wifi, phones, insurance liability...all the trappings of a typical office worker in any typical company anywhere. Except they're not working for Microsoft. So, to recoup these costs, Microsoft charges them rent. And this is a problem...why?
The only thing unusual here is that /. thought this was story-worthy. And $25M is a pittance compared to the company's bottom line so it's not like they're making out like bandits here.
In the end they will lay their freedom at our feet and say to us, Make us your slaves, but feed us. - Fyodor Dostoyevsky
And they'll end up abusing it.
The vendors are using their office space, their bathrooms, their electricity, etc. It's called rent.
Ultimately, it's a cost of doing business. It works out to about $3 per hour, so employees wind up getting paid less unless you can recoup those costs from what you charge to MS. My guess is employees wind up getting paid less unless they have a very specific in high demand skill set.
I'm a consultant - I convert gibberish into cash-flow.
By vendors, I assume they mean contractors they hire in to write code?
So they agree a deal with a contractor, then short change them by a desk rent fee. Should have read the small print, more fool them.
Headline says Microsoft is "making millions". I think it would be more accurate to say Microsoft is "just about breaking even" on renting office space to vendors. As others have pointed out, ~$500/month for one worker is actually a pretty darn good deal.
I'm an engineer - and I hate it when my fellow techies reveal how incredibly clueless they are about mundane business matters like overhead and G&A expenses. It's embarrassing to the tech profession.
Don't know why it is such great news.
I mean, Microsoft is being smart and it seems like what they charge is a pittance and the vendors can probably use this as a tax deductible expense.
After all, vendors are in the business of making money with their products, in this case, Microsoft based products, so, Microsoft gives them a hell of a great deal, and I mean, it seems like a cheap price for them to work on their products, having access to Microsoft themselves. I think it's just smart.
It seems to me that Slashdot (or Dice Holdings) is bothered when Microsoft makes money, whether it be through their products or anything else. And the references to the movie Office Space are off-topic.
The contractors at my company are required to use a company provided laptop, which is rented out. Every month the contractors include that expense in the invoice. It's expected and standard practice.
In the Microsoft-mind, a vendor should feel honored and privileged to be able to have a client with such world recognition that they should be willing to rent office space from the Redmond complex. It's arrogance plain and simple and Microsoft is slowly and steadily becoming less relevant in computing today. We'll see how longer MS can capitalize on its own name to charge for office space in its own complex. I wonder how many vendors eventually just say "fuck it!" and walk away
I am now afraid that slashdot reports me, At my triplex I charge $400 nothing include.
Please slashdot shhhhhhh
"Some vendors complain privately that Microsoft pushes them to reduce the rates they charge the company, then asks them to put workers on campus, and then hits them with these additional charges."
So these are companies SUPPLY a service to Microsoft, and its a charge-back so it's money coming back into Microsoft for deals that normally go outwards.
So this ISN'T Asus, Dell etc. this is not companies making PCs and buying Microsoft Windows, they are not vendors TO Microsoft and it's not a chargeback in that case.
It sounds like semantics to me, as if they've hired some companies and they pay rent, yet the article refers to contractors as a separate group.
If the vendors didn't want to be there, they wouldn't pay. They're willing to pay, and Microsoft charges for the access.
BFD
I don't exactly like Microsoft, but Jesus H. Fucking Christ, if you had an empty room in your house, you'd charge to rent it out, wouldn't you?
I've never ever paid rent on any of my contracts, why on earth would you? The company requires you to work on site, they set the terms that require you sit at that desk. Why on earth would you then rent the desk from them? If I hire an electrician to rewire my house, do I then charge him rent for being in my house?
And the article mentions some vendors pay it and some don't, which sounds more like a tax dodge, perhaps some vendors are from a different state (or country) and MS pay less tax as a result of an interstate billing trick, or similar. But it does sound like it's just budget fighting between departments with the facilities department trying to bill anyone they can.
The new rate was $500/month per cubicle, plus $10/month for a special "Replacement fund for office furniture damaged by the CEO".
So how does MS stack up as a landlord - are these rates good compared to other offices in the area?
that is why labor laws need to change / end job based health insurance.
But based health insurance is just one benefit.
But in big places with lot's benefits it can also come down to for JOB X the boss think that all there works can just benefit B to get the tools needed for there job free but then what happens is the contractors can't get get or have to go under the table / buy it on there own.
under the law / IRS rules the degree of control can make if they say to much about what you can do / what tools you use you may be a employee and the company has to pay up there part of the tax obligations.
http://www.irs.gov/pub/irs-utl/emporind.pdf
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-(Self-Employed)-or-Employee%3F
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Behavioral-Control
Types of Instructions Given
An employee is generally subject to the business’s instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work.
When and where to do the work.
What tools or equipment to use.
What workers to hire or to assist with the work.
Where to purchase supplies and services.
What work must be performed by a specified individual.
What order or sequence to follow when performing the work.
PC market is shrinking, Ballmer is raising prices, this is just another price rise on a locked in buyer.
so many companies are blinded by the possibility of acquiring vast amounts of Microsoft Money(like monopoly money) they're still paying Microsoft in hopes of getting there. There are lots of road-kill scenarios which should have caused pause to this but there are also many examples of companies wedding Microsoft and doing quite well. No doubt it's the smaller vendors who are falling for this scam Microsoft is able to capitalize on and it'll continue for years to come.
It does appear that these days are numbered as a large portion of the market shifts from the desktop and Microsoft continues to fail on the mobile platforms.
This does make me wonder if Microsoft is moving money back into these vendors pockets out of another department(marketing?) for the ability to do some creative financing budgets.
I can only agree about health care. Can we become a real country, please?
I think there is a lot to be said in terms of morale for standard benefits packages... but then that just incentivizes using non-employees.
talking about landlord landlords do they have to follow all the landlord tenant laws?
Microsoft is charging non-MSFT companies for occupying MSFT space for testing/using products that in all likelihood is in the vendors' best interest. Which is, you know, why the vendors are paying, willingly, for that office space. Because it benefits them. Because they make money for testing it or believe it's a solid investment in their future. Oh no. Horror.
Are there signs of coercion here? That MSFT is twisting vendors' arms to occupy office space at their various campuses globally to make a piddly $25M/year?
Shameful this made it beyond the /. editors' round file.
"'Mmm, yeah, I'm going to have to go ahead and ask you to pay $6,120 to come in to work on Sunday..." More Bill Lumbergh quotes.
Someone is charging money for renting a space. How is that news? I sincerely hope microsoft starts raising the rent on developers, even to the point where they start having to switch operations over to Android development. Its about time microsoft started charging for the privilege of being on the worlds most monopolistic desktop. I wouldn't even be surprised if developers were 'taxed' a 'single M$ developer' tax for each project: they would have to pay the salary of one microsoft 'internal' developer, even though they won't directly get the benefits of having that developer. Their application might expose a critical flaw in the microsoft system, which will need to be fixed, and because their application exposed the flaw, they have to pay to get it (potentially) fixed.
MS is fucking their last customers over one final time, by undercutting start ups and other software companies trying to make a living.
This must be their last straw that they are pulling *ggg*.
They charge for power, phone drop, internet drop. But, it's to get approval for products that could easily be in a contract worth 100x that amount.
You've already outed yourself Jeremiah Cornelius by forgetting to hit the 'Post Anonymously' button, so just fuck off!