Microsoft is Leaving Russia

Posted on June 8, 2022 by Paul Thurrott in Microsoft with 6 Comments

Months after the invasion of Ukraine, Microsoft has finally acknowledged the inevitable and is shutting down its operations in Russia.

“As a result of the changes to the economic outlook and the impact on our business in Russia, we have made the decision to significantly scale down our operations in Russia,” a Microsoft statement explains. “We will continue to fulfill our existing contractual obligations with Russian customers while the suspension of new sales remains in effect.”

“We are working closely with impacted employees to ensure they are treated with respect and have our full support during this difficult time,” the statement adds, referring to the 400 or so employees who will be impacted by this decision.

Microsoft announced in March that it was suspending all new product and service sales in Russia as a result of that country’s invasion of Ukraine. But it was vague about how or if it would support existing customers.

IBM also announced today that it would suspend business operations in Russia because of the war in Ukraine.

Join the discussion!

BECOME A THURROTT MEMBER:

Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Register
Comments (6)

6 responses to “Microsoft is Leaving Russia”

  1. John Craig

    Just a thought, but surely these big tech firms could do some meaningful damage to the Russian war machine if they do a 100% pull out.


    Servers switched off, operating systems no longer updated, licences revoked, apps pulled, total infrastructure blackout.


    Team Putin walks into the office tomorrow and boots up, Microsoft Office doesn't load, the OS throws up constant offline error messages, no email, no maps, no Teams, no Zoom, access to cloud computing is just gone.


    Ditto for Android and iPhones.


    I appreciate I'm taking a complex problem and talking like it's as easy as unplugging a kettle, but in this hyper connected world, these tech companies could seriously undermine Russia if they had the balls to flip the off switch entirely.



    • F4IL

      Wouldn't this undermine their credibility as companies selling products and reliable services to their customers? Who decides if they only do it to Russia and not a potential competitor or some other country down the road?

      • nine54

        This. Unless there is a national embargo on the country in question, this seems like a slippery slope. Why is the invasion of Ukraine a red line while human rights issues in China, for example, are not? And what's stopping companies in other countries from doing the same to the U.S.? And perhaps most importantly, why should Russian individuals and businesses be penalized for their government's actions, which they may condemn along with others?


        If there are national security concerns with selling certain products, then ceasing business might make sense. But, it's not a stretch to see this type of response applied as a form of protest over the results of an election, or a piece of legislation, etc. It's just another way businesses can exert political pressure and influence when many folks want businesses to stay out of politics.

      • Truffles

        Exactly.


        These corporate morality plays will come back to bite western companies. After all, it's not as if Microsoft is going to withdraw from the US market if the government embarks on another Iraq WMD fiasco, and people will be asking why Ukraine is different to a nation of brown people in the middle east.


        These voluntary exits will also guarantee that through-out the non-western world, governments are at this very moment planning how to exclude vulnerable western brands from their local tech stacks. It's not just tech - in Russia right now the vacuum caused by the voluntary withdrawal of western global brands are being filled by local or Asia based brands. The example that comes to mind is Renault which leased their multi-billion dollar Moscow production line for $1 - not as scrap, but as a going concern. Same with BP which sold its Russian petroleum business at a huge discount to an Indian company and had to write-off $35 billion of its investment in Russia.

        • nine54

          Great points. Some foreign policy folks would argue that this is why embargo/boycotts are either ineffective or, worse, counter-productive. Look at the countries that the U.S. has embargoed. We think this will cause the people to rise up and demand change from their government. But has that actually happened? Did it happen in Cuba despite 50+ years or embargo? Did it happen in North Korea?


          These countries ultimately just find other trading partners, some of which might be other embargoed countries. So, instead of creating any kind of compelling change, we've instead 1) pushed them into what we would call unsavory alliances and 2) made diplomacy harder by eliminating economic channels.


          Like you said, look at Russia. Certainly the sanctions and these corporate exits are having an effect, but others are coming in to fill the void. Consider the countries that abstained from the UN vote about the Ukraine invasion: the U.S. isn't the only superpower now, and the West has to be careful about dividing the world in half.

  2. agilefrog

    Lenovo will shortly be standing alone as the sole remaining PC tech firm still actively doing business in Russia.