Feeds

Microsoft moves to protect business from bank crunch

Windows whatever the weather

Remote control for virtualized desktops

Microsoft is taking steps to make sure it's not left out of pocket as banking customers seek bankruptcy protection against their suppliers.

The company's filed a motion with a US bankruptcy court to ensure it's kept abreast of latest developments in the $8.2bn Washington Mutual bankruptcy case.

Microsoft filed the notice because it has: "Existing contracts for software licenses and consulting services with Washington Mutual and we want to make sure those contracts are properly administered through the bankruptcy process," a company spokesman told The Seattle PI's Joseph Tartakoff in the wake of the filing.

Microsoft's business with big institutions uses annuity-based licensing, where payments on products like Windows or Office - are spread out to make billing easier for the customer and to ensure Microsoft has guaranteed income over a number or years. US Chapter 11, though, shields companies against paying creditors such as Microsoft while they devise a plan for reorganization.

Given Microsoft counts most investment and retail banks among its customers, it's reasonable to assume Lehman Brothers is also a major Microsoft customer. Also, there will be other institutions running Windows who - while not filing for protection - have been succumbing to acquisition or are looking weak.

That's going to create uncertainty over when and how Microsoft gets paid for existing contracts. And if Microsoft is concerned about Washington Mutual, then it'll be worried sick by Lehman's, America's biggest ever bankruptcy filing - bigger than WorldCom, bigger than Enron.

Asked by The Reg if it was a filing similar motion on Lehman, a Microsoft's spokesman said the company "routinely participates, by filing notices of appearance and other pleadings, in all bankruptcies in which Microsoft is either a creditor or has contracts with the bankrupt entity."

He refused to say which cases Microsoft is filing in. ®

Top 5 reasons to deploy VMware with Tegile

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
How to determine if cloud backup is right for your servers
Two key factors, technical feasibility and TCO economics, that backup and IT operations managers should consider when assessing cloud backup.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.