Microsoft Makes Millions Renting Campus Space to Vendors 95
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?"
Re:Kinda like Fox News (Score:4, Insightful)
As opposed to paid Microsoft shills and astroturfers posting their lies and modding down anyone who posts the truth about that evil empire?
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As opposed to paid Microsoft shills and astroturfers posting their lies and modding down anyone who posts the truth about that evil empire?
I don't work for Microsoft (I'm with the networking evil empire) but I still know a bullshit story about a common practice when I see one.
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It's not irrational to hate a news station that lies constantly. Fox News lies orders of magnitude more than any other station.
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No. Probably less than most stations. It's just that their lies are different from the lies you're used to.
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One does not have to buy into either side of this particular binary reality. ...thankfully.
What is the problem here? (Score:5, Insightful)
Good (Score:2)
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.
Re:Good (Score:5, Insightful)
When people aren't having to drive to work they aren't putting load on infrastructure (roads, buses etc) at the same time as everyone else. That means they create less pollution than someone that has to drive to work. A person that doesn't contribute to traffic and likewise doesn't make that contribution to pollution is better for the community than the person that does. The greenest commute is the one you don't have to make.
I previously worked for a fortune 25 company that had one third of it's work force telecommute from home. They estimated that the cost of providing office space to tens of thousands of employees were well over a billion dollars a year. They also were able to claim credit for green savings for the environment in different manners (the greenest office building is the one you don't have to build).
They also had the benefit of being able to use the flexibility of telecommuting as a competitive advantage when hiring and retaining employees. They were also better able to monitor the employees that telecommuted than the ones in the office and so they were more productive. Yahoo's problem was strictly one of management failure, not one of telecommuting failure.
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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.
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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
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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:
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And you completely missed the point.
The point is that in in-person communication you can see if the person is busy, and interact in a human way - like, you see he has nothing in calendar but is working hard with headphones on - so come back later and leave silently. I would rather receive a question about how busy I am and when I can answer and a remark "the details are in email" than an angry email with font size +14 and color=red. The first approach avoids flamewars, the latter, well, it is up to the pers
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The point is that in in-person communication you can see if the person is busy, and interact in a human way
That would be really nice, it's a shame the management morons where I work consider WIFI on their laptops to be more important that anything else anyone might be doing. There are strong advantages to working from home or working irregular hours where I work, the main one being you actually get some work done.
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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.
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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.
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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)
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.
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I've worked in companies where every project was required to pay internal IT dept bills for services rendered, so what?
MSFT requires this as well. MSIT (Microsoft IT) bills other departments for support provided
Much though I love bashing MS I have to agree. Charging both internal and external people for office space is normal practice in every big company I've ever worked for. Providing a desk isn't cheap, I doubt MS are making a profit on this.
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LibreOffice licenses are free. It's an option for some organizations at least.
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If i'm following your Treadstone here, basically this high overhead accounting system is a gov't thing to do.
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One company I did w
Unusual? (Score:5, Insightful)
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.
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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.
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You're missing the point. This fee is not assessed for contractors working for Microsoft on Microsoft projects but who are working on the contractors premises. If Microsoft were to remove this fee, it won't be fair to contractors who have people working in their own offices.
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You are missing the point... They are working for Microsoft. These are contractors working for Microsoft on Microsoft projects.
The proper analogy here is you call a contractor to renovate your kitchen, then charge him $50 a day for the workspace in your house.
Damn. I like that idea.....
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Exactly, MS increases it's "rental" charge, the vendor increases their hourly rate to recoup the cost, and essentially, the entire $25 million MS "made", they already paid to the vendor in the first place. It's like if I give my kid a $100 allowance and then "charged" $10 for his rent. I might as well have just given him $90 to start with.
Ooh, unless I want him to move out, I suppose.
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You're missing the tax dodge. MS sells the building to a foreign subsidiary, all revenue is recognized off shore and US tax free (they claim expenses to make sure the subsisiary looses money) then the extra costs from the vendor decrease MS revenue and reduces their profit, which decreases the taxes in the US. The subsidiary is in a tax haven and pays no taxes. The end result is MS offshores what they are charging for cubes and ultimately pays no taxes (due to this and other scams).
Any time you see a stiuat
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No, it's guaranteed to be standard corporate practices. I am, at this moment, sitting in an office owned by the company that owns the entire building that I work in, and the office that I am sitting in is paid for out of my department's budget, paid back to the company that our department is a part of. It allows the company to account for every inch of rentable office space and separate what it's gaining from other tenants, and what it's not gaining from it's own departments. There is no tax dodge. In fact,
Give someone some resource for free (Score:4, Insightful)
And they'll end up abusing it.
MS has the unusual practice of charging rent (Score:1)
The vendors are using their office space, their bathrooms, their electricity, etc. It's called rent.
Costs (Score:2)
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no, this is employees of all the companies that microsoft does business with
asus, dell, HP, symantec and dozens of others. they have employees at microsoft's offices to help enginees their products
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Actually, you're sort of on to something, but not necessarily the way you mean it.
As a result of various lawsuits which accused Microsoft (accurately, IMO) of using contractors ("a dash" employees, aka dash-trash, for the a- designation on their email addresses) as a de-facto permanent labor force without the benefits, contractors now have various limitations built into their contract, including, I believe, a 90 day mandatory period between contracts totally a year of employment. (It is worth noting that ev
that is why labor laws need to change / end health (Score:2)
that is why labor laws need to change / end job based health insurance.
But based health insurance is just one benefit.
But in big places with lot's benefits it can also come down to for JOB X the boss think that all there works can just benefit B to get the tools needed for there job free but then what happens is the contractors can't get get or have to go under the table / buy it on there own.
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I can only agree about health care. Can we become a real country, please?
I think there is a lot to be said in terms of morale for standard benefits packages... but then that just incentivizes using non-employees.
Not "Making" Millions (Score:1)
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.
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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)
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.
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Every expense is tax deductible for a company. So it most definitely is.
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This does seem deductible though, unless something else complicates matters like the companies being related parties etc.
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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.
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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
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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)
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.
Rent is usually expensed (Score:3)
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.
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Well, if you have to pay rent you just include it in your bid.
If your competitor can do the job without needing to be on-site they might be able to outbid you. Usually the whole idea of this sort of thing is to try to get people to not be onsite.
As far as vendors being treated differently, I suspect that this is just the difference between contingent labor and what most would consider true contracting.
A contingent worker is just a body - they show up, get paid by the hour, and do whatever their assigned su
under the law / IRS rules degree of control (Score:2)
under the law / IRS rules the degree of control can make if they say to much about what you can do / what tools you use you may be a employee and the company has to pay up there part of the tax obligations.
http://www.irs.gov/pub/irs-utl/emporind.pdf [irs.gov]
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-(Self-Employed)-or-Employee%3F [irs.gov]
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Behavioral-Control [irs.gov]
Types of Instructions Given
An employee is generally subjec
Microsoft Thinking (Score:1)
Re:Microsoft Thinking (Score:5, Interesting)
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.
talking about landlord landlords do they have to f (Score:2)
talking about landlord landlords do they have to follow all the landlord tenant laws?
Office Space II: Bill Lumbergh Takes Redmond (Score:1)
"'Mmm, yeah, I'm going to have to go ahead and ask you to pay $6,120 to come in to work on Sunday..." More Bill Lumbergh quotes. [imdb.com]
Really, how is this news? (Score:1)
Someone is charging money for renting a space. How is that news? I sincerely hope microsoft starts raising the rent on developers, even to the point where they start having to switch operations over to Android development. Its about time microsoft started charging for the privilege of being on the worlds most monopolistic desktop. I wouldn't even be surprised if developers were 'taxed' a 'single M$ developer' tax for each project: they would have to pay the salary of one microsoft 'internal' developer,
Joint Interoperability Test Command does as well (Score:1)