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Businesses Microsoft The Almighty Buck News

Microsoft Makes Millions Renting Campus Space to Vendors 95

Posted by timothy
from the hey-so-does-harvard dept.
theodp writes "In a move that would do Bill Lumbergh (YouTube homage) proud, Microsoft has been pulling in about $25 million a year through its unusual practice of charging its vendors for occupying office space on its campus while working on Microsoft projects, according to the real estate firm that manages the program. And that's before a planned July 1st rate increase that Microsoft informed vendors of earlier this week, which will boost the 'chargeback' rate for its 'shadow workforce' from $450 per month ($5,400 per year) for every workstation to $510 per month (or $6,120 per year). So, is there a discount if you're moved downstairs into Storage B?"
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Microsoft Makes Millions Renting Campus Space to Vendors

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  • by muhula (621678) on Saturday March 30, 2013 @07:37AM (#43317629)
    Would it be news if Microsoft paid vendors $450 less per month than company B? Now, wouldn't it be even less news if vendors took this into account and adjusted their fees upwards by $450? This is just an accounting trick that probably has no real world impact on the vendors.
  • by onyxruby (118189)

    Business needs to see that needless filling of cubes just because is a waste of money of their own as well as their employees. Telecommuting is the responsible way of the future for environmental and quality of life reasons for the community at large.

    Yahoo's failure was one of management, not of telecommuting itself.

    • by loufoque (1400831)

      Working in the office is much better to exchange with your co-workers.
      It also makes it much easier to separate working time and family time.

      I've telecommuted, and I can tell I am much more productive in the office.

      • by xous (1009057)

        I don't know how your office was setup but ours is a complete zoo.

        It's 100% open concept with about 4-5ft high dividers. The noise is insane. It's horribly distracting.

        The only way I get any work done is jacking into my cellphone for music to block all the annoying chatter out. If this was the only problem you might be able to say it was just bad design.

        Another problem is interrupts. People constantly ask me stupid questions when they can see me instead of following the process and opening a ticket. If I p

        • by zyzko (6739)

          It really depends.

          I share an office with our after sales people - so there is *a lot* of telephone calls going on all the time, and curses on failures and cheers on success. But there are also the fellow techs there, if the on-duty support person has a question he doesn't know the answer immediately to he can just whip up a quick "is there anyone willing to take a challenge on x?". Sure, IM and company-wide IRC channels etc. can supplement that (we have both) but it is not the same thing.

          The killer is here:

        • by 1s44c (552956)

          I don't have the dividers but I know how you feel. Those stupid hand waving morons with their stupid questions that they could figure out themselves if they would just engage their brains annoy me too. Especially the needy management types who cry for help for every simple thing.

      • I think for some that may be true. For me a mix works best. 2-3 days a week in the office, take in person meetings, see problems first hand that need that treatment. Then the rest of the time working at home, on my BETTER equipment (such as multiple 24" screens vs 19" screens) and getting quiet time. I save 2 hours a day commuting of which usually half gets turn into more office work and half gets turned into more free time for me.
      • by 1s44c (552956)

        Working in the office is much better to exchange with your co-workers.
        It also makes it much easier to separate working time and family time.

        I've telecommuted, and I can tell I am much more productive in the office.

        It just depends on what you are trying to get done. If you need uninterrupted quiet time to finish some project it's far easier at home. If you need to interact with your co-workers it's far easier at work. Personally if I have to do anything that takes a few hours of actual work I find myself wishing I was at home just to avoid all the people who insist on small talk.

      • by Tamerlin (940577)

        Working in the office is much better to exchange with your co-workers.
        It also makes it much easier to separate working time and family time.

        Exchanging information with idiots isn't productive. Most staff in corporate IT are idiots, ergo exchanging information with them isn't worth the bother. Most of them use the remote work option to work perpetually anyway, which is proof that they're not actually any good.

        The last place I worked at where a lot of folks worked remotely was a culture of work; these people wrote spaghetti code and worked constantly.

        I've telecommuted, and I can tell I am much more productive in the office.

        On my last telecommuting gig I had the option of working in an office without windows or at

  • And? (Score:5, Insightful)

    by kenh (9056) on Saturday March 30, 2013 @07:46AM (#43317647) Homepage Journal

    I've worked in companies where every project was required to pay internal IT dept bills for services rendered, so what?

    This is an accounting mechanism that forces projects to account for all costs Bourne by the corporation in support of the project. I suspect internal projects are also billed at an equal amount, but the bills remain internal.

    It helps facilities lose the stigma of being a cost to the organization and instead it is funded by the internal groups that consume their resources.

    At $450/540 a month, that's a pretty good rate for a piece of real estate, a desk, unmetered power and Internet access... Can I feta desk in MS office space for the same price? I currently rent a small 240 sq ft office for my work and it runs $525 for the space, plus utilities & ISP costs - $540/month all-in in an MS facility sounds good to me.

    • It sounds like a good deal until you start having to dodge flying chairs...
    • by ne0n (884282)

      This is an accounting mechanism that forces projects to account for all costs Bourne by the corporation in support of the project. I suspect internal projects are also billed at an equal amount, but the bills remain internal.

      If i'm following your Treadstone here, basically this high overhead accounting system is a gov't thing to do.

    • by tlhIngan (30335)

      I've worked in companies where every project was required to pay internal IT dept bills for services rendered, so what?

      This is an accounting mechanism that forces projects to account for all costs Bourne by the corporation in support of the project. I suspect internal projects are also billed at an equal amount, but the bills remain internal.

      It helps facilities lose the stigma of being a cost to the organization and instead it is funded by the internal groups that consume their resources.

      One company I did w

  • Unusual? (Score:5, Insightful)

    by prisoner-of-enigma (535770) on Saturday March 30, 2013 @07:56AM (#43317671) Homepage

    OK, so you have a worker occupying workspace, using power, air conditioning, network/wifi, phones, insurance liability...all the trappings of a typical office worker in any typical company anywhere. Except they're not working for Microsoft. So, to recoup these costs, Microsoft charges them rent. And this is a problem...why?

    The only thing unusual here is that /. thought this was story-worthy. And $25M is a pittance compared to the company's bottom line so it's not like they're making out like bandits here.

    • Re: (Score:2, Insightful)

      by recoiledsnake (879048)

      The only thing unusual here is that /. thought this was story-worthy

      Unusual? Slashdot will post any garbage if it's anti-Microsoft.

      http://tech.slashdot.org/article.pl?sid=09/02/16/2259257 [slashdot.org]
      http://arstechnica.com/information-technology/2009/02/oh-the-humanity-windows-7s-draconian-drm/ [arstechnica.com]
      http://mobile.slashdot.org/story/13/03/17/1914209/microsoft-to-abandon-windows-phone [slashdot.org]

      No wonder the site is basically dying leaving only zealots as people with half a clue leave the site.

  • by rolfwind (528248) on Saturday March 30, 2013 @07:56AM (#43317673)

    And they'll end up abusing it.

  • The vendors are using their office space, their bathrooms, their electricity, etc. It's called rent.

  • Ultimately, it's a cost of doing business. It works out to about $3 per hour, so employees wind up getting paid less unless you can recoup those costs from what you charge to MS. My guess is employees wind up getting paid less unless they have a very specific in high demand skill set.
  • by Anonymous Coward

    Headline says Microsoft is "making millions". I think it would be more accurate to say Microsoft is "just about breaking even" on renting office space to vendors. As others have pointed out, ~$500/month for one worker is actually a pretty darn good deal.

    I'm an engineer - and I hate it when my fellow techies reveal how incredibly clueless they are about mundane business matters like overhead and G&A expenses. It's embarrassing to the tech profession.

    • Headline says Microsoft is "making millions". I think it would be more accurate to say Microsoft is "just about breaking even" on renting office space to vendors.

      It would be more accurate to say that Microsoft is "charging millions". But then we all know how well accuracy is regarded here.

  • Smart (Score:4, Interesting)

    by houbou (1097327) on Saturday March 30, 2013 @08:12AM (#43317725) Journal
    Don't know why it is such great news.
    I mean, Microsoft is being smart and it seems like what they charge is a pittance and the vendors can probably use this as a tax deductible expense.
    After all, vendors are in the business of making money with their products, in this case, Microsoft based products, so, Microsoft gives them a hell of a great deal, and I mean, it seems like a cheap price for them to work on their products, having access to Microsoft themselves. I think it's just smart.
    • by AvitarX (172628)

      Every expense is tax deductible for a company. So it most definitely is.

      • by stepdown (1352479)
        Not every expense is recognised by the tax authorities, the classic example being depreciation.

        This does seem deductible though, unless something else complicates matters like the companies being related parties etc.
        • by AvitarX (172628)

          Depreciation is too deductible, you buy a durable good and It's revenue neutral, then you take the depreciation over the life of the good.

        • by Rich0 (548339)

          Depreciation is certainly deductible, provided you follow the relevant accounting rules. In fact, depreciation generally works against a company from a tax perspective.

          Suppose you earn $1M after various expenses, but you bought a $1M machine. Without using depreciation you would just deduct that $1M from your income and pay no taxes. Governments force you to depreciate it, which means that you end up deducting $100k/yr for 10 years, or something to that effect. The result is that this year you pay takes

          • by stepdown (1352479)
            I should have qualified that by saying that the accounting calculation of depreciation is usually very different from the tax figure.

            In the UK at least no depreciation is allowable, instead capital allowances are given, sometimes a 100% deduction in the first year to encourage investment.
  • Why the hate? (Score:2, Insightful)

    by Anonymous Coward

    It seems to me that Slashdot (or Dice Holdings) is bothered when Microsoft makes money, whether it be through their products or anything else. And the references to the movie Office Space are off-topic.

  • by Manfre (631065) on Saturday March 30, 2013 @08:22AM (#43317761) Homepage Journal

    The contractors at my company are required to use a company provided laptop, which is rented out. Every month the contractors include that expense in the invoice. It's expected and standard practice.

  • In the Microsoft-mind, a vendor should feel honored and privileged to be able to have a client with such world recognition that they should be willing to rent office space from the Redmond complex. It's arrogance plain and simple and Microsoft is slowly and steadily becoming less relevant in computing today. We'll see how longer MS can capitalize on its own name to charge for office space in its own complex. I wonder how many vendors eventually just say "fuck it!" and walk away
    • by rudy_wayne (414635) on Saturday March 30, 2013 @09:16AM (#43317983)

      It's arrogance plain and simple and Microsoft is slowly and steadily becoming less relevant in computing today.

      You're absolutely right. Microsoft is so totally irrelevant that last year they only had $68 Billion in revenue and only had the highest profits in the company's history. Yep, you nailed it. Microsoft is failing and failing fast.

  • "'Mmm, yeah, I'm going to have to go ahead and ask you to pay $6,120 to come in to work on Sunday..." More Bill Lumbergh quotes. [imdb.com]

  • by Anonymous Coward

    Someone is charging money for renting a space. How is that news? I sincerely hope microsoft starts raising the rent on developers, even to the point where they start having to switch operations over to Android development. Its about time microsoft started charging for the privilege of being on the worlds most monopolistic desktop. I wouldn't even be surprised if developers were 'taxed' a 'single M$ developer' tax for each project: they would have to pay the salary of one microsoft 'internal' developer,

  • They charge for power, phone drop, internet drop. But, it's to get approval for products that could easily be in a contract worth 100x that amount.

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