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Does Microsoft Use Extortion to Sign MOUs?

Posted in Antitrust, Deals, Microsoft at 10:33 am by Dr. Roy Schestowitz


Summary: Microsoft’s “sign our deals or we sue you” strategy

A Microsoft Memorandum of Understanding (MoU), aka "Project Marshall", is a deal that prevents competition from Microsoft rivals. It is how Microsoft shuts the door to exclude superior and more affordable offers from all sorts of other companies. For actual examples see:

A regular site participant told the following story, which we have not yet summarised, so here is the raw log:

zer0c00l Today i came to know that ms has threatened my educational head on licensing issue Apr 23 11:37
zer0c00l my head of the department told me personally Apr 23 11:37
schestowitz oiaohm: watch picture: http://blogs.wsj.com/venturecapital/2009/04/2… Apr 23 11:38
zer0c00l they threatened of lock down the whole educational institution Apr 23 11:38
zer0c00l so they agreed and signed a MOU with ms Apr 23 11:38
schestowitz Wow. Apr 23 11:38
schestowitz Which educational head Apr 23 11:38
schestowitz Regional? Apr 23 11:38
zer0c00l my college Apr 23 11:38
schestowitz Ha Apr 23 11:38
schestowitz Do you have written proof? Apr 23 11:39
schestowitz It can be anonymised Apr 23 11:39
schestowitz And be pass to the European Commission Apr 23 11:39
schestowitz They have fined to serve the criminals from Intel shortly. Apr 23 11:39
zer0c00l schestowitz, i dont have any written proof Apr 23 11:39
zer0c00l will try to get one Apr 23 11:39
zer0c00l but he said in our valedictory  function Apr 23 11:40
schestowitz Try getting proof Apr 23 11:40
zer0c00l “if you won’t buy 200 license we will engage anti-piracy operations on your institution “ Apr 23 11:40
zer0c00l ok Apr 23 11:40
zer0c00l sure i will Apr 23 11:41
schestowitz Word of mouth is good, but it’s better to show something. Apr 23 11:41
schestowitz zer0c00l: that is extortion Apr 23 11:41
schestowitz It’s illegal Apr 23 11:41
schestowitz And it’s very typical Apr 23 11:41
schestowitz I heard it before. Apr 23 11:41
zer0c00l hmm Apr 23 11:41
zer0c00l bad ms Apr 23 11:41
schestowitz Anything else you were told? Apr 23 11:42
zer0c00l no Apr 23 11:42
zer0c00l i will try to collect for sure Apr 23 11:42
zer0c00l i raised a question regarding the software usage, Apr 23 11:42
zer0c00l so he replied back with these answers Apr 23 11:43
zer0c00l he said we were forced Apr 23 11:43
oiaohm IBM and Oracle are going to get into a little bit of a fight soon. Apr 23 11:43
schestowitz Was there illegal use/copies? Apr 23 11:43
zer0c00l no Apr 23 11:43
schestowitz I mean, typically there is. Apr 23 11:43
schestowitz In certain nations it’s common Apr 23 11:43
oiaohm MS is kinda going to find themselves in the middle. Apr 23 11:43
zer0c00l they are now using some volume licensing Apr 23 11:43
schestowitz And Microsoft has publicly endorses counterfeiting, so long as people move to another OS Apr 23 11:43
schestowitz oiaohm: IBM has already manage a new migration route to DB2 Apr 23 11:44
schestowitz So they don’t stand idly. Apr 23 11:44
oiaohm postgresql vs Mysql Apr 23 11:44
zer0c00l they paying ms some 1 million yearly Apr 23 11:44
oiaohm db2 vs orcale. Apr 23 11:44
oiaohm Let the war being. Last one standing. Apr 23 11:44
oiaohm Both now make there own servers. Apr 23 11:45
oiaohm We have not see a hardware maker face off in a long time. Apr 23 11:45
schestowitz zer0c00l: for how many licences/people? Apr 23 11:47
oiaohm The fun part by the end of it.  Either IBM will aquire Orcale or Orcale will aquire IBM or a draw. Apr 23 11:47
zer0c00l atleast there will be  some 800  computers in the college Apr 23 11:48
schestowitz oiaohm: their market cap isn’t far apart Apr 23 11:48
zer0c00l they have only 200 licenses Apr 23 11:48
schestowitz 1 million for 1000 PCs? Apr 23 11:48
zer0c00l office, visual studio Apr 23 11:48
zer0c00l it includes Apr 23 11:48
schestowitz Extra addictives :-) Apr 23 11:49
schestowitz Get kids to program /for/ Microsoft Apr 23 11:49
zer0c00l schestowitz, yes thats the plan Apr 23 11:49
schestowitz And lock their data inside the OOXML capsule that only Microsoft Office can open when they grow up Apr 23 11:49
oiaohm I have found ms will get quite cheep when you say in a school envorment MS has 2 options 1 software for nothing 2 Linux gets installed everywhere. Apr 23 11:49
schestowitz zer0c00l: nice company… Apr 23 11:49
zer0c00l :( Apr 23 11:49
zer0c00l schestowitz, but the professor has now poised to change the system Apr 23 11:50
oiaohm Most times MS chooses the cheap licences. Apr 23 11:50
oiaohm Be away of MS other licencing system.  Per student zer0c00l Apr 23 11:50
zer0c00l he asked me to install GNU/linux in each and every systems Apr 23 11:50
oiaohm aware Apr 23 11:50
zer0c00l i have installed 200 systems so far Apr 23 11:50
zer0c00l just dual booting it Apr 23 11:50
oiaohm Yep that normal MS threat. Apr 23 11:50
oiaohm See we have linux here. Apr 23 11:51
schestowitz oiaohm: yes Apr 23 11:51
zer0c00l :) Apr 23 11:51
schestowitz oiaohm: let me find ref Apr 23 11:51
schestowitz That I found this morning. Apr 23 11:51
schestowitz “Linux club helps firms hide from Microsoft” Apr 23 11:51
schestowitz “Local authorities and companies who are interested in ditching their proprietary software in favour of open source are being encouraged to join a confidential scheme that aims to protect them from the attentions of firms such as Microsoft.” Apr 23 11:51
schestowitz “The initiative, called The Incubator Club, is said to be a response to the tactics employed by some major software vendors against firms and organisations who consider using Linux.” Apr 23 11:52
schestowitz “According to Eddie Bleasdale of Netproject, an IT consultancy firm that runs The Incubator Club, Microsoft has repeatedly tried to stop potential Linux migrations — sometimes with notable success.” Apr 23 11:52
schestowitz ““Whenever we’ve gone public about a client moving to Linux, Microsoft has come in and offered remarkable incentives for them to stay as they are,” Bleasdale told the Open Source in Local Government conference in London on Tuesday. “ Apr 23 11:52
oiaohm Per student licencing gets very stupid. Apr 23 11:52
schestowitz Source: http://news.zdnet.co.uk/sof… Apr 23 11:52
schestowitz But in this latest case it’s extortion Apr 23 11:52
schestowitz “Pay us for all machines or we sue you” Apr 23 11:52
schestowitz Microsoft uses patents too now Apr 23 11:52
zer0c00l schestowitz, yes Apr 23 11:52
schestowitz The vague patent threats Apr 23 11:52
oiaohm School with Per student has to pay like 25 dollars per student and you can install as many copies of the software you like. Apr 23 11:52
oiaohm So much for anti pirate. Apr 23 11:53
schestowitz So even if you don’t have any licensing issues (with Windows) they’ll raise Linux-patents issues Apr 23 11:53
schestowitz Seen before Apr 23 11:53
schestowitz They use it against large companies Apr 23 11:53
schestowitz Horacio spoke about it in 2007 Apr 23 11:53
schestowitz The companies don’t want to identify themselves Apr 23 11:53
schestowitz Those that sell out, that is. Apr 23 11:53
oiaohm Lot of large companies threaten back. Apr 23 11:53
oiaohm Its the smaller companies it works on. Apr 23 11:54
*mib_t0pudo (i=c910e07d@gateway/web/ajax/mibbit.com/x-deacd5ba8fb7030e) has joined #boycottnovell Apr 23 11:54
schestowitz oiaohm: maybe some companies won’t bother fighting back Apr 23 11:54
schestowitz The idea is to make Linux “Scary” Apr 23 11:54
oiaohm Most large companies have large patents. Apr 23 11:54
schestowitz So they won’t want the trouble and just be swayed into Linux Apr 23 11:54
schestowitz That’s Allison’s thesis (or was it gpl-violations’) about TomTom Apr 23 11:54
oiaohm Reason why they hit back they take the point of view MS might anyhow. Apr 23 11:54
oiaohm For invalid software installs. Apr 23 11:55
oiaohm So they extract extra moment. Apr 23 11:55
schestowitz Try to scare device makers who use Linux and don’t want to encouter difficulties Apr 23 11:55
oiaohm MS only try to scare weak looking device makers. Apr 23 11:56
oiaohm Once that look to have good cash reserves they don’t touch. Apr 23 11:56
schestowitz Layoffs mentioned in mini-msft now: http://minimsft.blogspot.com/200… Apr 23 11:56
schestowitz oiaohm: yes, TomTom reported bad financial results days before MS sued over FAT Apr 23 11:56
schestowitz No coincidence IMHO Apr 23 11:56
schestowitz They use a vulnerable and demoralised company at times when investors put pressure Apr 23 11:57
schestowitz And OIN has not struck back like it promise Apr 23 11:57
schestowitz So Microsoft is now going around secretly collecting protection money, saying that TomTom paid, therefore there is no mdeniability Apr 23 11:57
schestowitz *deniability Apr 23 11:57
oiaohm There has been a lot of other things going on. Apr 23 11:58
oiaohm OIN has been sitting back and watching.   Lot of .net supporting companies having been jumping ship. Apr 23 11:59
schestowitz oiaohm: how is this related? Apr 23 11:59
*magentar has quit (Read error: 104 (Connection reset by peer)) Apr 23 11:59
oiaohm The patent attack on TomTom proved MS patent promise is not worth spit. Apr 23 12:00
oiaohm So particular .net companies are looking for other solutions like blender. Apr 23 12:00
oiaohm OIN winning against MS might slow that down. Apr 23 12:00
oiaohm Yes sometimes it pays to sit back and do nothing and let nature happen. Apr 23 12:01
oiaohm I really would hate to be in the OIN chair right now trying to pick the best move. Apr 23 12:02
MinceR it happens too slowly Apr 23 12:02
MinceR m$ should be killed quickly. Apr 23 12:02
oiaohm Patent attacking MS now would not be sure to kill them quickly either. Apr 23 12:02
oiaohm They have enough money still to draw it out. Apr 23 12:02
oiaohm Yet there money reports say they are in a down wards spirle. Apr 23 12:03
oiaohm Rule of business if a tactic has worked well copy it. Apr 23 12:03
schestowitz brb Apr 23 12:04
oiaohm MinceR: the hard thing is picking the right point to hit MS at its weakest. Apr 23 12:05
oiaohm Great MS is delaying it must not be good.  After the close of trade they will release the 3Q. Apr 23 12:08
oiaohm If its good you normally release it at the start of trade to make stock trade high. Apr 23 12:08
schestowitz oiaohm:  I don’t agree Apr 23 12:09
schestowitz Also, Ubuntu 9.04 has just been officially release Apr 23 12:09
schestowitz Microsoft will do more damage unless it’s clipped now Apr 23 12:09
schestowitz European Commission need to intervene too Apr 23 12:10
schestowitz For all I can gather, Microsoft is now more aggressive then ever Apr 23 12:10

In additon, below we append an E-mail that shows the very same victim being pressured to pay for software ‘upgrades’ (some people consider them downgrades).

Appendix: Evidence of Microsoft forcing the customers to upgrade

This communication was sent from a non-monitored alias. Please do not reply. If you have questions concerning this communication, or the information contained therein, please write to your local Microsoft Reseller/Distributor for further assistance.

Removal of Products from Student Media program

Dear [anonymised],

Due to legal reasons, Microsoft ® will end availability for the 2003 Microsoft ® Office System on June 30, 2007.

Action Needed! For those of you who need student media for Office 2003 products, please note that the 2003 Office release will only be available through June 30th 2007. Orders of student media for 2003 Office System must be received by Microsoft no later than June 30, 2007 (this date is the date the order must be received by Microsoft, not the date the order is submitted to your reseller). For further information, please visit: http://www.microsoft.com/education/StudentMedia.mspx

This notice details the Microsoft End of Life plan regarding product availability and support for the 2003 Office release.
Product List

These products will be removed on June 30, 2007

Microsoft ® Office FrontPage ® 2003

Microsoft ® Office OneNote ® 2003

Microsoft ® Office Professional 2003

Microsoft ® Office Standard 2003

Microsoft ® Office Project 2003

Microsoft ® Office Project Professional 2003

Microsoft ® Office Visio ® Professional 2003

Microsoft ® Office Visio ® Standard 2003

Support for the 2003 Release

Customers who purchase the 2003 Office Release with a new computer will continue to receive support for the 2003 release products based on their OEM’s or System Builder’s policy. Customers who purchased the 2003 Office System from a retailer or through Microsoft subscriptions will have access to Mainstream Support until April 14, 2009. This means retail customers can place calls to Microsoft Customer Service and Support about Office 2003 related issues for the following:

* Incident Support (no-charge incident support, paid incident support, support charged on an hourly basis)
* Security update support, and
* The ability to request non-security Hot Fixes

At the end of mainstream support, Microsoft offers end-user customers 60 months of Extended Support for the 2003 release until April 8, 2014. Extended support will allow for:

* Security update support at no additional cost, and
* Paid incident support options only

During the Extended Support period, non-security related Hot Fix support requires a separate Extended Hot Fix Support contract to be purchased where per-fix fees will apply. Microsoft will not accept requests for design changes, or new features during the extended support phase.
Microsoft Support Policy FAQ


Microsoft Support Policy Lifecycle

Microsoft Volume Licensing

SYSTEM NOTIFICATION: Site Access Instructions for New Agreement Administrators


Dear xxxxx

Thank you for selecting the Microsoft Volume Licensing and/or Services program for your organization.

We are pleased to provide you with your unique access details for the Microsoft Volume Licensing Services (MVLS) web site. According to your Agreement, you have been nominated as your organization’s contact for all communications relating to your company’s Microsoft Master Business or Volume License Agreement(s).

How can MVLS help your organization?

The MVLS web site has been specifically designed to help make it simple for you to track and manage your Microsoft information and Agreements in one place.
On the MVLS website you can:

* View of all your Microsoft Business and Licensing Agreements on one secure site
* Access your licensing order information and purchase history
* Access your Volume License Product Keys, which you will need to activate certain Microsoft products
* Manage your Software Assurance and MSDN Benefits

How to register on the MVLS web site:

Step 1) Visit https://licensing.microsoft.com.

Step 2) If prompted, sign on to Microsoft .NET Passport.You may use an existing .NET Passport or create a new one. To create a Passport, please visit http://www.passport.net

Step 3) Complete the Registration page by entering the appropriate information and including the specific agreement number that was sent in a separate communication to your Agreement key contact (Notices or Primary contact).
For security reasons, your Agreement number has been forwarded to you separately, in a Volume Licensing Agreement Welcome Acceptance letter, which you should receive shortly through e-mail or postal mail. Alternatively, your Agreement number can be obtained directly from your selected Microsoft Channel Partner or Microsoft Services contact.

Once you have registered, and the information you entered has been validated, you will become an Administrative User for your agreement(s). You will then be able to add other users whom you also wish to be responsible for agreement management within your organization.

If you are not the person responsible for the administration of this Microsoft Agreement, then please forward this email to the correct person and notify your Channel Partner or Microsoft Services contact of the correct individual’s contact details, so they may be updated appropriately in our records. Thank you in advance for your help.

If you do experience any problems accessing the MVLS web site or have any questions please feel free to contact our support center via email: MVLSApac@microsoft.com where it will be quickly and efficiently handled.

Yours sincerely,

The Microsoft Volume Licensing Services Team


View As Web Page

Dear xxxxxxx

Microsoft is pleased to introduce a new way to fulfill media beginning December 1, 2007 for our Campus and School Agreement (CASA) customers with active media update subscriptions.

Currently, CASA customers with media update subscriptions receive the updates for all CASA products originally shipped to them in the Microsoft® media Welcome Kit ? whether or not they ordered the product(s). Customers have told us that these monthly shipments can be a waste of time and resources, and are often hard to manage.

Under the new media fulfillment process, effective December 1, 2007, you will receive subscription updates only for the products you have ordered. You will continue to receive these product updates in the languages of your choice. These changes will be made automatically; there is no need for any action on your part.

We hope you find this change helpful. We thank you for using Microsoft licensed products, and we look forward to continuing to support your software needs.

Yours sincerely,
Microsoft Operations Pte Ltd


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