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12.01.08

Leaked: Microsoft Pays Companies to Recommend Windows

Posted in Courtroom, Deception, Dell, Microsoft, Windows at 5:43 pm by Dr. Roy Schestowitz

“<vendor> recommends Windows” is an paid-for advert, not a recommendation

Kid with laptop

SOME weeks ago we wrote about how Microsoft fakes recommendations and deceives the public. Now we have solid proof.

Let’s take it one step at a time and see how this works.

In short, Microsoft informs computer shops that if they put some Vista advertising in their newspaper advertisements (or other forms of ads), there will be money in the bank for them, paid in the form of marketing money from Microsoft.

This is how Microsoft gets all those Vista advertisements all over the place, including big OEMs. They pay you for it. It’s an advert, not a sincere recommendation. This may also explain why Dell’s adverts for Ubuntu-powered PCs are accompanied by pro-Windows messages, as Ken Stark pointed out recently (Dell was subjected to bad and exclusionary deals before).

Here is how the stunt runs. It begins with a message like this one (which we anonymised):


Hi [company name omitted]

Your company can get [amount omitted] in vouchers if you utilize [proportion omitted] by [date omitted] on a preapproved offer and post the final claim by
[another date omitted]. I have enclosed details of the promotion with this email, and am including information on how to utilise coop as well.

It would be fantastic to see you qualify for the vouchers! Given the end of life with Windows XP and the steady sales of Vista (GFK tracks that over 89% of managed retailers are selling Vista PCs to consumers), it would be great to put this towards a Vista sales incentive for your staff or channel partners.

Included/Attached
· Terms and Conditions
· Quick Guide to running a COOP Customer Offer

Any questions, let me know.

Regards

[name of Microsoft employee omitted]


Here is the Terms and Conditions document:


OEM Cooperative Marketing Execution Promotion

If you are defined as a System Builder or a Named Account in the OEM Cooperative marketing program and have an active enrolment status, you could be eligible for vouchers which you may choose to use to support a Windows Vista PC sales incentive with your sales team.

[...]

Terms and Conditions:

1.Timing of promotion. In order to be eligible for an incentive, you must comply with the specified deadlines. Microsoft reserves the right in its sole discretion to cancel, terminate, modify, recommence or suspend either or both parts of the promotion at any time.

2.Tax. Microsoft accepts no responsibility for any tax implications that may arise from this promotion. Microsoft will not remit any taxes on your behalf, nor will it provide any tax-related documentation to you. You are solely responsible for ensuring that any taxes arising from participation in the promotion are reported and paid to the appropriate tax authority. All amounts payable by Microsoft are inclusive of GST (if any). You should seek independent tax and financial advice.

3.Microsoft’s decision final. Microsoft’s decision in relation to all aspects of this promotion is final and no correspondence will be entered into.

4.Limitation and exclusion of liability. Subject to any applicable law which cannot be excluded, Microsoft and its related bodies corporate shall not be liable for any loss, damage or injury suffered or sustained (including but not limited to direct, indirect or consequential loss or loss arising from negligence) arising directly or indirectly out of or in connection with the promotion or any incentive.

5.Microsoft’s verification right. Microsoft may choose to verify any information provided by you in connection with this promotion (including, if Microsoft chooses to do so, by contacting your end-user customers), and if Microsoft reasonably believes that you have fabricated or altered any information, then Microsoft may determine that you are ineligible for either or both incentives. You must, if requested by Microsoft, promptly provide any requested information related to the promotion or your eligibility to receive an incentive.

6.Supply of incentives. If Microsoft is unable to supply the nominated incentive, Microsoft reserves the right, subject to the written direction of any competent legal authority, to supply another incentive of greater or equal value. For incentives that have a specified validity period, Microsoft and its associated agencies and companies accept no responsibility for your failure to take advantage of the incentive prior to it becoming invalid.

7.Information submitted by you. Information submitted by you will be used to determine eligibility for one or both parts of the promotion, provide fulfilment of the promotion, and for other Microsoft internal business purposes. Except as otherwise described in these terms and conditions, information provided by you will not be shared outside of Microsoft and its subsidiaries and affiliates without your permission.

8.Your participation. You may only participate once in the promotion, and any costs associated with your participation in the promotion is your responsibility. Microsoft may terminate your involvement in the promotion and/or withhold any incentives owing to you under this promotion if it believes, on reasonable grounds, that you have:
   a.breached any of these terms and conditions;
   b.not complied with the Microsoft Code of Ethics or
   c.otherwise infringed Microsoft’s copyright or trade marks.

9.Acceptance of these terms and conditions. Your submission of such “proof of execution” as required for Promotion means that you accept and agree to comply with these terms and conditions.


Also attached is this:


HOW TO Utilize Coop*

1.Decide on an offer.

2.Create the graphics (for e-DM or fliers or both) adhering to COOP guidelines which are:
   a.Relevant Tag line such as “We recommend genuine Microsoft Office 2007 SBE.”
   b.Company’s branding (logo) and contact details (this can just be an email or URL or phone#).
   c.30% of content supporting the sale of a fully assembled system preinstalled with genuine MS OEM product(s).

3.Send to your account manager for pre-approval.

4.Your account manager sends to US CORP for official pre-approval # (up to 3 working days)

5.Receive official pre-approval # from CORP.

6.Enter plan in the online tool https://www.microsoftcoop.com/default.aspx

7.Wait for online plan to be approved.

8.Buy give-aways and save your receipts for documentation.

9.Start offer (this date must be AFTER the dates the plan and advert were pre-approved officially by corp).

10.End offer (this date must be AFTER the start date).

11.Enter final claim for activity in online tool (this date must be AFTER the end date of the planned activity where you WILL NEED the following in digital file format to upload:
   a.Advert with pre-approval number from Microsoft corporate.
   b.Invoice for specific give-aways (the invoice date must be AFTER the dates the plan and advert were pre-approved officially by corporate but before the planned start date.)
   c.Digital pictures of the give-away item in your possession.

EXAMPLE FOR CURRENT INCENTIVE OFFER:
   – Start Date: 10th Nov 2008
   – End Date: 5th Dec 2008
   – Offer: “Buy any Vista Home Premium or Ultimate PC with Office 2007 before 5th Dec AND get a free <give-away-item>

* For complete information on how to utilize coop, please reference the Co-Op Partner Guidebook available here: https://www.microsoftcoop.com/aspx/additionalResources_SB.aspx


Attached is also the guidebook [PDF], which is labeled “Microsoft Confidential” (what are they trying to hide?).

For many shops these days, business is rather slow. Microsoft is exploiting pressure and/or greed to increase mind share (perception), as vividly described in the “Effective Evangelism” document which was 'leaked' out of Microsoft during a trial.

Can the ASA be lobbied to deal with Microsoft following allegations of market deception? This clearly distorts and confuses, does it not?

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36 Comments

  1. Sheldon Huelin said,

    December 1, 2008 at 6:54 pm

    Gravatar

    As I keep reading this blog I am hating Microsoft more and more. I’ve abandoned their office software for OO and Google Docs.

  2. G. Michaels said,

    December 1, 2008 at 9:35 pm

    Gravatar

    Congratulations Roy, you uncovered a super-secret document that details things which have been pretty much public knowledge for the past 12 years! And heck, things that pretty much every company in the planet does, but you actually manage to infuse an air of evil around it! Very good indeed.

    Your nymshifter immediately got busy and started shilling for you over at Slashdot. That was quick! Except that he uses a lot more dollar signs. Lots and lots and lots of dollar signs. It’s hilarious, really. And he wonders why so few of his submissions actually make it to the front page.

    Note: writer of this comment adds absolutely nothing but stalking and personal attacks against readers, as documented here.

  3. Eruaran said,

    December 2, 2008 at 2:45 am

    Gravatar

    “a super-secret document that details things which have been pretty much public knowledge for the past 12 years!”

    Its not “super secret” sure, but it is confidential (on the PDF), and many consumers are generally oblivious to the fact that the “[insert manufacturer name here] recommends” part of the ad is in itself paid advertising and not a recommendation as such.

    “pretty much every company in the planet does”

    No. Most simply give you free advertising and promotional materials (posters, dummy boxes, information cards, that sort of thing). Some companies offer incentives to promote their products, it usually involves pointing out to a mystery shopper why product X is better than product Y. And manufacturer X usually puts forward reasonable points that are actually true (otherwise its false advertising). This is not the same as blanket paid advertising that masquerades as a recommendation and must conform to a bunch of set requirements that maximize the false impression it gives the customer.

  4. Needs Sunliht said,

    December 2, 2008 at 5:43 am

    Gravatar

    It’s been clear all along that there are payments or other holds over businesses to get them to promote MS products. In many cases, there is no earthly reason for them not to be on a search-and-destroy mission against MS products, yet the web

    Interesting that *only* those paid are the ones promoting MS.

  5. Roy Schestowitz said,

    December 2, 2008 at 6:02 am

    Gravatar

    I’ve seen people claiming that this is obvious, which it is. The evidence, however, is rare and hard to come by.

  6. AlexH said,

    December 2, 2008 at 6:25 am

    Gravatar

    To be fair, the evidence is very much in the public domain and has been for a while.

    “Recommends Windows” is incredibly shabby, but the OEMs are party to this too.

  7. Roy Schestowitz said,

    December 2, 2008 at 7:17 am

    Gravatar

    I agree, Alex, but this detailed evidence is new and it shows not only Vista’s role but also the role of the OOXML trap called Office 2007.

  8. AlexH said,

    December 2, 2008 at 7:38 am

    Gravatar

    I don’t know how “new” it is; you’ve written about one small aspect of the programme which has been going on for years and doesn’t address the latest ways they manipulate their OEMs.

    What about the part where OEMs get paid when customers upgrade to Office later?

  9. helios said,

    December 2, 2008 at 7:44 am

    Gravatar

    Beautiful Roy…this is a piece of what we’ve been digging for the past 4 years. While yes, most of us intuitively knew it, having the “proof” is nice. We are close to getting the other piece of this and I’ll post it as soon as it breaks. We just have to be careful handling “our guy”. This could scare him back in but then again, there was no guarantee he was going to produce much more than he already has anyway.

    Nice shot buddy…clean and deadly.

    h

  10. Darryl said,

    December 2, 2008 at 7:52 am

    Gravatar

    whats the difference between this and say DELL, COMPAQ.. ect. putting out their brand name to retailers, it happens, and it happens to be completey legal, right and fair.

    We (consumers) know what we want, (as opposed to FOSS, trying to give us what THEY think we want). .

    If i see a computer i look at the maker of the hardware, (ie compaq) and i look at the “SYSTEM COMPONENTS” like RAM, CPU, VIDEO and OPERATING SYSTEM” after reviewing the equipment (including OS/Software), i evaluate the price to “WHAT I GET” and make an informed decision.

    SO placing an Advertisment about MS, INTEL, COMPAQ and so on is perfectly, normal and natural, and is WHAT SHOULD HAPPEN.

    FOSS/Linux, you are so bitter, someone is better than you, and you dont like it.

    GET A CLUE, fix your quality, and increadibly stupid number of Distros, get a quality assurance policy become customer and quality focused, forget about MS and get your own house in order.

    but NO FOSS/Linux just want to destroy MS, why ?? because they cant hope to compete with them on equal terms in way of quality and consistency and you dont like it..

  11. Jo Shields said,

    December 2, 2008 at 7:57 am

    Gravatar

    but NO FOSS/Linux just want to destroy MS, why ?? because they cant hope to compete with them on equal terms in way of quality and consistency and you dont like it..

    You’re a bit dim really, aren’t you

  12. Roy Schestowitz said,

    December 2, 2008 at 8:01 am

    Gravatar

    darryl at hotmail.com,

    whats the difference between this and say DELL, COMPAQ.. ect. putting out their brand name to retailers, it happens, and it happens to be completey legal, right and fair.

    The difference is that Microsoft uses other people’s mouths to make false recommendations. It’s akin to the “people-ready” fiasco, which was AstroTurfing.

    Microsoft pays star writers to recite slogan
    http://valleywag.com/tech/federated-media/microsoft-pays-star-writers-to-recite-slogan-271485.php

  13. toe said,

    December 2, 2008 at 8:16 am

    Gravatar

    Great article and nice to see evidence of it.

    I actually touch on this on my website http://www.ilovelinux.co.uk in which I sayt that ‘Dell recommends Windows Vista’ type ads are just clever marketing.

    There is a company over here in UK called Novatech who actually sold os free laptops and also claimed they work with Ubuntu and showed the Ubuntu logo.

    The laptops gave disappeared and all of a sudden ‘Novatech recommend Windows Vista’ has appeared on their website.

    Personally I think Vista is rubbish. http://www.vistaisrubbish.com

    toe

  14. Roy Schestowitz said,

    December 2, 2008 at 8:25 am

    Gravatar

    The PC I’m using at the moment I bought from Novatech a few months ago and I too was shocked to see their Web site deformed into a Microsoft marketing extravaganza (it’s like a Formula 1 car or its driver’s gear). The site no longer even mentioned GNU/Linux, but it was still possible to purchase O/S-free PCs.

  15. nomasteryoda said,

    December 2, 2008 at 9:13 am

    Gravatar

    I appreciate this find for what it is – the truth about what Microsoft does to “force” vendors to push their products. This happens with training for Microsoft products as well.

    Just so you know, I’ve been using Linux since 1999 and have been called a Linux nutter for sure, but I can attest to the quality, stability and overall value of Linux vs. Windows. I can do anything I need with Linux and use OpenOffice for “Office” files as do many people tired of the upgrade cycle that is Microsoft.

    As for Novell, I boycotted them after the Microsoft deal. Prior to that I used SuSe for several years because it was a good Distro. I’ve since moved on to Ubuntu, Fedora and Sidux. Having a variety of Distros is something the Linux community does well, though it can be confusing to someone coming from a lock-in single OS like Windows.

    Choice is good and keeps our brains from stagnating!! Besides, I really get tired of all the Windows malware I come across when someone says, “hey, can you fix my Windows, its broken again”. I simply say sure for $50 I’ll clean it up and make the system dual-boot with a Linux distro of your choice. “Why put Linux on it?” they ask. I say because you can surf the web safely in Linux when the Windows box tanks again in 2 months because you forgot to upgrade the antivirus software definitions or clicked some nice trojan infesting pop-up window. They finish the conversation with a “Thank you so much and here’s another $50 for putting Linux on my system!!”

    Oh, if they don’t have the original windows CD, I just wipe and put a Linux distro on it. People are flexible and understand money is hard to come by these days.

  16. Ed Landaveri said,

    December 2, 2008 at 9:15 am

    Gravatar

    Let us not forget that here in California it used to be a PC PowerSpec that it was distributed by Microcenter. It use to come wit FreeSpire (before it’s demise) and later only with Windows. The periodical advertisement that I receive every month shows them coming with Windows only. No mention about Ubuntu or OS free PC. Just the ludicrous: “PowerSpec recommends MS Vista”. Sure they were bought up also. Also to mention that during these days I have seen not any of the Ubuntu Netops on display neither at this store or it’s advertisement. It looks that MS is putting pressure not to display them or put them for sale. The same can be said regarding the other PC stores brochures. Shame on them.

  17. phil said,

    December 2, 2008 at 9:35 am

    Gravatar

    This kind of adverting is very misleading. Here a company is offering a product that the customer is interested in buying. Rather than seal the deal and take the money, they say “but wait – you are making a mistake! You should really buy …”.

    OK, so why are you offering the other product? Why waste warehouse space on something you don’t think is good?

  18. Ian said,

    December 2, 2008 at 10:19 am

    Gravatar

    “Recommends Windows” is incredibly shabby, but the OEMs are party to this too. – AlexH

    This. The best way this type of activity stops, outside of legal pressure, is when the manufacturers put a stop to it.

  19. Abe said,

    December 2, 2008 at 11:16 am

    Gravatar

    This practice has been going on for a long time, and it is a good thing that the evidence is in writing this time. The only way this will stop is when the majority of consumers are educated and enlightened about the sleazy marketing, and start taking this issue seriously. The current economic situation will help consumers to see the light and it will back fire on MS & their lackey vendors.

    Good work Roy. Publishing this evidence is how an effective way to educate the consumers but non-IT consumers rarely read such articles. Word of mouth should still be used since it is the most effective with the average John/Jane Doe.

    And for that dimwit who said FOSS/Linux guys are jealous, keep thinking that while we change the world.

  20. Ian said,

    December 2, 2008 at 11:21 am

    Gravatar

    @Abe,

    I think you make a mistake assuming consumers actually care about this. Educating consumers won’t make any difference at all since:

    1. For the most part, consumers don’t care
    2. It’s the OEMs that are ultimately responsible for doing this, therefore, responsible for shutting it down.

  21. RyanT said,

    December 2, 2008 at 11:51 am

    Gravatar

    1. For the most part, consumers don’t care

    Yes, they do. No one likes being outright lied to, and should come under more scrutiny than it has.

  22. Roy Schestowitz said,

    December 2, 2008 at 12:06 pm

    Gravatar

    End users don’t always choose their computers. They let geeks (sometimes their parents or children), CIOs or the shops decide for them and equipped with more information, the latter — not the consumer — can make informed choices that cull out spurious ‘recommendations’.

    I’ve seen some accusations elsewhere that this post states the obvious, but it’s not the stating; it’s the showing (of hard evidence).

  23. Ian said,

    December 2, 2008 at 12:10 pm

    Gravatar

    No one likes being outright lied to, and should come under more scrutiny than it has.

    I don’t disagree with any of that. However, I believe there is a large amount of apathy as far as an operating system goes. In my professional experience, there’s a healthy number of people that don’t even understand the concept of an operating system, let alone are consciously concerned with Microsoft advertising.

    The way I see it, to get anything changed, the OEMs will have to step up and do something about it or some type of legal issue would be brought up by a consumer advocacy group. Other than that, everyone who uses a computer will have to collectively realize what’s going on and actually care, which I don’t see happening.

  24. pcolon said,

    December 2, 2008 at 12:19 pm

    Gravatar

    It’s the tangible document you can point to. Something you can show to back up the claim. That’s what this post is giving you. Proof, not conjecture or the probability of guessing correctly.

  25. Ian said,

    December 2, 2008 at 12:32 pm

    Gravatar

    It’s the tangible document you can point to. Something you can show to back up the claim. That’s what this post is giving you. Proof, not conjecture or the probability of guessing correctly.

    That’s fine. Others might be arguing that, but I wasn’t.

  26. Abe said,

    December 2, 2008 at 7:43 pm

    Gravatar

    @Ian,
    Consumers normally don’t care but they seriously do care when their pocket book gets hits.

    I wasn’t talking about the OS, I was talking about all the free/dom software they will get when running Linux as opposed to the bundle of money they have to pay up for apps when running Windows.

    I thought that was obvious.

  27. G. Michaels said,

    December 2, 2008 at 9:41 pm

    Gravatar

    By the way Roy, you should mention this is in Australia, since the person who “leaked” this to you posts from two different ARIN IP addresses (one from BigPond, and these). Assuming it’s not a forgery, do you have something similar for the US or proof that this is done in the US?

    Note: writer of this comment adds absolutely nothing but stalking and personal attacks against readers, as documented here.

  28. Abbas Khan M.D. said,

    December 2, 2008 at 10:44 pm

    Gravatar

    I’m a Doctor. Some doctors do something similar to this. It’s called kickback. They pay other doctors to forward them patients (advertise them). Now my question is that, would you rather get referred to the “BEST” oncologist (cancer doctor) if you had cancer or one that is paying your doctor to refer you to him.

    I’m assuming for most people the story changes when something important like your health or life gets involved. Yeah software is not as important as someone’s life but the correct principle is what i was trying to display here.

    In the end, the point is you don’t want someone who you trust getting paid by someone to peddle their very cruddy software (or cruddy practice).

    -AK

  29. Ilde Giron said,

    December 2, 2008 at 11:02 pm

    Gravatar

    @G. Michaels
    “Assuming it’s not a forgery, do you have something similar for the US or proof that this is done in the US?”

    Are you trying to imply that as long as they don do it in the US, it’s ok with you?

  30. G. Michaels said,

    December 2, 2008 at 11:21 pm

    Gravatar

    No, I’m asking if they also do it in the US.

    Note: writer of this comment adds absolutely nothing but stalking and personal attacks against readers, as documented here.

  31. GreyCells said,

    December 3, 2008 at 5:05 am

    Gravatar

    Play Microsoft at their own game – I have yet to see:

    “[My company] does *not* recommend Microsoft Windows Vista|XP|95.”

    or

    “[My company] recommends you avoid Microsoft Windows Vista|XP|95 like the plague.”

    on any website – now *that* would be an advertising campaign that money could not buy…

  32. Ari T. said,

    December 3, 2008 at 6:21 am

    Gravatar

    I have never seen this document before, although I have been following this area for a few years. Thanks for posting it Roy.

  33. Merchy said,

    December 3, 2008 at 7:18 am

    Gravatar

    Why dont some of the linux distributers do the same?

  34. Roy Schestowitz said,

    December 3, 2008 at 7:25 am

    Gravatar

    Probably ethics.

  35. Ian said,

    December 3, 2008 at 10:12 am

    Gravatar

    Probably ethics.

    I doubt it. The reason they don’t do it is because, generally speaking, they can’t assert the kind of pressure on OEMs that Microsoft can.

  36. Roy Schestowitz said,

    December 3, 2008 at 10:17 am

    Gravatar

    That too. There’s lots of history here.

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