Microsoft moves to protect business from bank crunch
Windows whatever the weather
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. ®
Not a good time to supply to Corps(e)
Mark my words as someone who has been caught out twice by this in the past.
Change your payment terms to a much shorter time. Payment at the end of the day, payment weekly, or payment on receipt.
If you have to battle for money now, you are in a big problem, the normal ways of making everyone's life a misery until payment is made won't work as they just won't have the cash.
Trick is to slow up work, move onto your own projects, and take a few holiday days, just to feel the water. And be ready to pull your unpaid, copyright work from the system, don't feed the system any more, and keep your work in another location. Renegotiate contract if you have to and be ready to walk.
In the case of physical stock get ready to go down there with the biggest people in your organisation and just take back anything unpaid for. Nothing more amusing than bursting in on the receivers and demanding any unpaid stock immediately. Just walk in and grab your stuff back, dumping the return receipts as you go. Key is to do it fast, most of the people will be shell shocked anyhow. You do have to make sure that you sold under your terms though, and that allows for goods reclaim.
I have been in places where supplier CEOs have all got together and just camped in reception until they have been paid. This is what the credit crunch is all about really, inability for corporations to pay suppliers (including workers).
Big business has too many accountants, and each started to go away from core business, into finance and restructuring of assets. The idea is to keep all monies working for you, and very little money on hand to pay debts, bad business.
So the clever money will move into VC and business angels, hopefully we should see a load of SMEs start up.
But, it is very prudent to never go back to tick, charge them per day, or on deliverables. I think it would be good to see people in jobs get paid everyday as well, that would stop people taking advantage of credit. A payroll represents 12 months of interest on half the monthly payroll.
Corps liked contractors because they would give 2months of credit, bill at end of month and one month to pay, that meant the Corps had 12 months of interest on the 2 time the monthly payout to a contractor per annum (interest at 8 times greater than perms). There are a lot of advantages to not employing people, but instead hiring the services of someone.
But, screw that for a game of soldiers now, your chance of being paid is a very small % until the mess gets sorted out, and quite frankly a lot of people will never be getting paid for work done now, or about a month ago, as the Corps go to the wall.
Re: Time to audit
" So this is as good as time as any to do an audit on whether your staff actually need the expensive office license you are paying for and see if a free version wouldn't be better."
Yep, using openoffice for those who are using office casually, these businesses could save tons of office licenses, and have it only for someone that's got like custom office add-ons or some macros or VBA that don't run properly on it (OpenOffice *does* have macro and VBA support, so just having some doesn't mean it won't work.)
Personally, I'd go further. I'd rip Windows out of the server environment as much as possible, which would also save significantly. For desktops where the person's probably using a word processor, web browser, and E-Mail, I'd use something like an Ubuntu desktop; I would probably rig up a windows-looking theme, if someone sees the new desktop and panics, roll the appearance back (ala the win2000 theme for Windows XP). If there's some windows-specific apps, I would try wine first, and if that's a problem consider a windows terminal server (which would cost, but save over having windows on every machine). I would take a bit of a "holistic" approach to this, though, if some are using loads of windows-specific apps they might as well run windows, and if someone really is going to piss and moan over it, I'd probably say "fine" and let them keep it too. Once people are used to the change, the support time for the new boxes will be so reduced, the remaining Windows boxes will just give you something to do in your spare time 8-).
This is what happened in to Portland, Oregon school district in 2002, and some neighboring ones in Washington and Oregon. They were asked to show receipts for all software on their computers and show all software is licensed within 60 days. Oh they don't have receipts or time to check thousands of computers? Go into volume licensing at $45 a machine, including Macs that may not have any Microsoft software at all. Solution? They burned rubber converting to K12LTSP as fast as possible, paid cash money for whatever microsoft software remained and told Microsoft to take a hike.
In the short term, LTSP is too radical for businesses that are not used to Windows Terminal Server or Citrix, they have desktops already. But, as machines age (i.e. fail, or hit some replacement age) I'd phase in some LTSP-type setups, it should save on maintenance and power use (and, in the LTSP rig I've played with, had higher performance.. openoffice, for instance, the first user to use the LTSP server might have to wait for it to load, but then since it's in RAM subsequent users wait under 2 seconds on a relatively slow server machine.) I played with it, it's NICE... the Ubuntu one's exactly like Ubuntu for instance (you turn on a few checkboxes in the config, and USB memory sticks, printers and scanners "just work", and can be shared or not at the whims of the admin.)
A subtle difference
IT would be a shame if the big boys like microsof got to use leverage to hang on to money when small suppliers of good/services will be left to go spin. A software vendor such as MS will only be making less money as opposed to loosing money as their product has minimal cost of distribution (which no doubt they have already made back) unlike a physical product such as office furniture, paper, etc.
Basically as they dont have to buy raw materials they dont loose out (as much) unlike other providers. I know this is a bit of a freetard argument re virtual products cost nothing, but there is some truth in it and id rather see other people get paid.