Selling Out to a Company on the Decline

Dr. Roy Schestowitz

2009-01-07 10:35:52 UTC
Modified: 2009-01-07 10:35:52 UTC

Don't give in to Microsoft

THE MYTH OF an invincible, unavoidable and inevitable Microsoft is not justified. There are apparently redundancies to be announced shortly.

In a report today, Goldman Sachs' Sarah Friar says layoffs at Microsoft are "likely" and would be "good for the shares."

We wrote about this several days ago and even IDG covers it.

Combine these gloomy prospects with the widespread expectation that Microsoft's revenues may fall short of expectations for the first quarter since 2000, and there certainly seem to be hard times ahead for the gang from Redmond.

There are also some enlightening comments about Microsoft layoffs. So who would actually be willing to join in? Who would give up on basic principles?

Melvin Calimag, an author who has mostly published Linux-hostile articles (examples in [1, 2]) since his journey to Redmond, is now doing another article about Microsoft's embrace-and-extend of open source in the Philippines. Their motives ought to be clear [1, 2, 3].

With interoperability as a goal, Microsoft Philippines has forged a deal with a Filipino-owned open source software development house to "jointly build developer tools" and to "enable the creation of more interoperable programs."

Translation: it needs to run on Windows.

The American software giant’s partnership with Exist Global is the first such deal that Microsoft has formed with an open source company in the Philippines.

Redmond, Washington-based Microsoft has lately been accelerating its collaboration with the open source industry. The company announced last September the opening in the Philippines of its first interoperability lab in Asia located at the CICT building in Quezon City. It also said it will soon unveil a similar facility at the University of the Philippines.

[...]

Under the partnership, Microsoft is providing information including software development kits, technical documentation and other publicly available materials, as well as Microsoft software that will aid Exist develop the data testing and integration tools.

"The importance of strong integration into Visual Studio for the adoption of .Net projects will be paramount. The support and contribution from Microsoft through this partnership will ensure that. There is also strong demand for automated testing being an essential part of automated builds, and provision of a .Net testing project like NFixture will meet that demand," Damarillo noted.

As we wrote a month ago, seeing Winston Damarillo sell out like this is disappointing, but Dana Blankenhorn tries denying that there is a problem with it.

Unholy, Sparky? Really? The story describes a deal between Winston Demarillo’s Exist Global and Microsoft to “enable the creation of more interoperable programs.”

This ZDNet blog is also feeding Steve Ballmer's friends at Gartner. In the same blog on the same very day, and courtesy of Paula Rooney: "Gartner doles out sobering predictions for open source use in the enterprise for next 5 years." This group's lack of integrity didn't prevent Bob Sutor from referencing this either. It's important to be aware that Gartner contributes to confusion around the term "open source" -- much like Microsoft desires. ⬆

"David Smith commented that Gartner will not bash MS if MS chooses to slip Vista."

--Jamin Spilzer, Microsoft

Comments

David Gerard

2009-01-07 15:25:35

The comments on the current thread on Mini-Microsoft are really quite amazing to read. Assuming anonymous blog comments can be believed, Microsoft is trying to push out ~ 15% of current staff any way they can without having to call it a "layoff."
Roy Schestowitz

2009-01-07 15:27:55

I began hearing about this several months ago (people getting the boot). That sure sounds like Microsoft. Also in the news today:

http://www.pcworld.com/article/156525/satyam_chief_quits_admits_faking_financial_results.html?tk=rss_news

It sure brings not-so-distant memories:

“Microsoft’s perspective is best reflected by Bob Herbold, Chief Operating Officer, to whom the CFO reports. Bob very sincerely replied, “Bill, everyone is doing it.” My response was that Microsoft is a leader and that others are now seeking to emulate these fraudulent practices they have legitimized. Naturally Bob was not pleased by this perspective and that was our final conversation. A second informal response came when Microsoft asked PR Newswire to stop issuing my press releases.

“Microsoft is PR Newswire’s largest client.”

http://www.billparish.com/msftfraudfacts.html
AlexH

2009-01-07 15:35:31

@David: I think you have to take those comments with a pinch of salt; "Mini-MS" is a blog with many people pining for the "good old days" at Microsoft where they were small, lean and dangerous.

MS undoubtedly has to cut head count, but a 15% cut would likely scare the horses. Most other equivalent businesses are looking at 5% or something.
Roy Schestowitz

2009-01-07 15:36:58

Not based on the figures that I've been tracking/accumulating (see IRC logs for details).
David Gerard

2009-01-07 15:39:19

@AlexH - oh, absolutely. Even if the anecdotes are true, the plural of "anecdote" still isn't "data." However, it is certainly enough to warrant closer journalistic investigation. (Though the current wave of stories don't really do anything beyond using that minimsft thread as a source, whether stated or not.)
AlexH

2009-01-07 15:39:24

@Roy: yeah, but that 15k number has basically come from one source if you track it back and everyone else keeps repeating it.

MS have to announce the cuts in their quarterly report because a. they affect the stock price and b. they need to comply with labor laws. They can't hide large cuts.
Roy Schestowitz

2009-01-07 15:41:11

But they have temps on contracts.
AlexH

2009-01-07 15:47:34

However they're actually employed, they still need to announce it.
Roy Schestowitz

2009-01-07 15:52:55

They can just not renew the contract.
AlexH

2009-01-07 16:03:07

Unless they have many thousands of people whose contracts all conveniently come up in January, that's not really going to help them.

Plus, they still have to announce it. Anything which can materially affect the company's future performance has to be disclosed, that's how the public stock exchanges work.
Roy Schestowitz

2009-01-07 16:08:12

Ideally -- yes.
David Gerard

2009-01-07 21:19:12

Yeah, everyone's waiting for the other shoe to drop.

Popcorn?
Roy Schestowitz

2009-01-07 21:20:33

That would be rude.

5 Reasons Why Not to Be Shocked by Microsoft Layoffs

http://www.marketingpilgrim.com/2009/01/5-reasons-why-not-to-be-shocked-by-microsoft-layoffs.html

Microsoft Planning Layoffs?

http://news.digitaltrends.com/news-article/18789/microsoft-planning-layoffs

Sign of the Times: First-Ever Microsoft Layoffs?

http://www.von.com/news/sign-of-times-first-ever-microsoft-layoffs.html

Report: "Massive layoff" unlikely at Microsoft

http://blog.seattlepi.nwsource.com/microsoft/archives/158470.asp?source=mypi

Microsoft layoff rumors continue their swirl

http://www.networkworld.com/news/2009/010509-microsoft-layoff-rumors.html

Microsoft layoff rumors swirl

http://uk.gamespot.com/news/6202771.html

Microsoft Mulling Layoffs?

http://blogs.barrons.com/techtraderdaily/2009/01/05/microsoft-mulling-layoffs/

Microsoft layoff rumors swirl

http://blogs.zdnet.com/sommer/?p=285

IBM, Microsoft, Massive Layoff Rumors

http://www.adotas.com/2009/01/ibm-microsoft-massive-layoff-rumors/

Rumor: Microsoft to Cut 15,000 Employees this Month

http://www.dailytech.com/Rumor+Microsoft+to+Cut+15000+Employees+this+Month/article13841.htm

Microsoft Feels the Economic Pinch

http://rcpmag.com/blogs/weblog.aspx?blog=3044

Microsoft Rumored to be Considering Job Cuts

http://uk.i4u.com/article22469.html

Microsoft restructure rumours abound

http://www.vnunet.com/vnunet/news/2233271/microsoft-restructure-plans

Microsoft prepares to chop workforce in first major jobs cull

http://www.dailymail.co.uk/money/article-1104450/Microsoft-prepares-chop-workforce-major-jobs-cull.html

Microsoft Thinking Over Thousands Of Redundancies

http://www.topnews.in/microsoft-thinking-over-thousands-redundancies-2104421

Microsoft To Lay Off [Your Guess Here]

http://www.examiner.com/r-5095305~Microsoft_To_Lay_Off__Your_Guess_Here_.html

Redundancies on the way at Microsoft?

http://www.developmag.com/news/31028/Redundancies-on-the-way-at-Microsoft

Rumors Of Microsoft's 15,000 Person Staff Cuts

http://www.webpronews.com/blogtalk/2009/01/06/rumors-of-microsofts-15000-person-staff-cuts

Stop Shrinking, Microsoft

http://www.fool.com/investing/value/2009/01/05/stop-shrinking-microsoft.aspx

Thousands of jobs under threat at Microsoft

http://www.gamesindustry.biz/articles/thousands-of-jobs-under-threat-at-microsoft
David Gerard

2009-01-07 21:28:21

As I said: all tracing back to Mini-Microsoft comments as the source. All the second sources named in those articles are sourced from minimsft (particularly FUDzilla) with a bit of "analysis" (random opinionation to fill space) or quotes from analysts who don't actually know anything solid either (again, to fill space). The state of tech journalism continues to be dismal.
Roy Schestowitz

2009-01-07 21:31:37

Why did Microsoft decline to comment on (deny) the rumours?
AlexH

2009-01-07 21:33:09

@David: particularly since minimsft seems to be backtracking over the previous rumors, since people rumbled that MS would have to let all the H1-Bs go first.
David Gerard

2009-01-07 21:34:22

Because they're idiots, obviously. I mean, if you knew lots of your employees read and comment on Mini-Microsoft and continued to say nothing like this ... presumably someone thinks it's a good idea to neither confirm nor deny. That doesn't actually constitute a confirmation.

(I'm thinking about what Wikimedia does with particularly stupid rumours that grow legs. Mind you, we do actually deny them once they get to the secondary reports. Not that Wikmedia is comparable to Microsoft, we're much more inept than evil.)
David Gerard

2009-01-07 21:35:21

And also, not to say that the rumours aren't 100% true. That is indeed possible.
Roy Schestowitz

2009-01-07 21:36:54

Why does Microsoft not deny them when asked?
David Gerard

2009-01-07 21:40:38

Presumably because imitating Apple got them this far!

Or because they're so dysfunctional they really don't know what to do for damage control. Or someone thinks the current rumour mill is actually a good idea o_0

Even when there's malice aplenty, presuming stupidity is frequently in order.
Roy Schestowitz

2009-01-07 21:42:26

They'd better do something about the people who are whispering. Their stock sank today.

Intel's miss weighs on Microsoft shares

"Shares of Microsoft Corp., the world's largest software maker, sank Wednesday after chip maker Intel Corp. said fourth-quarter sales missed already lowered expectations."

http://www.forbes.com/feeds/ap/2009/01/07/ap5889938.html
David Gerard

2009-01-07 21:47:08

You can bet the stock price has their full attention. Like a rabbit in headlights.
Roy Schestowitz

2009-01-07 21:58:47

I'll do a post about this pretty soon.

http://www.hd-report.com/2009/01/06/both-microsoft-and-sony-closures-imminent/

http://www.contactmusic.com/news.nsf/article/e-40%20suffers%20from%20falling%20value%20of%20microsoft%20stocks_1090882

http://www.webpronews.com/topnews/2009/01/07/microsoft-setting-aside-seattle-expansion-plans

Satyam Chief Quits, Admits Faking Financial Results

"In a resignation letter submitted to Satyam's board, B. Ramalinga Raju said the company's balance sheet carries inflated bank and cash balances, non-existent accrued interest, understated liabilities, and overstated credit amounts owed to the company."

http://www.pcworld.com/article/156525/satyam_chief_quits_admits_faking_financial_results.html?tk=rss_news

“Microsoft’s perspective is best reflected by Bob Herbold, Chief Operating Officer, to whom the CFO reports. Bob very sincerely replied, “Bill, everyone is doing it.” My response was that Microsoft is a leader and that others are now seeking to emulate these fraudulent practices they have legitimized. Naturally Bob was not pleased by this perspective and that was our final conversation. A second informal response came when Microsoft asked PR Newswire to stop issuing my press releases.

“Microsoft is PR Newswire’s largest client.”

http://www.billparish.com/msftfraudfacts.html

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Selling Out to a Company on the Decline

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Intel's miss weighs on Microsoft shares

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