2. Company Profile Industry : Computer software, Consumer electronics Computer hardware, Video games IT consulting, Online advertising, Automotive software Founded: April 4, 1975 , Albuquerque, New Mexico Founder(s) Bill Gates Paul Allen Headquarters One Microsoft Way Redmond, Washington, United States Key people Steve Ballmer (CEO) Brian Kevin Turner (COO) Bill Gates (Chairman) Ray Ozzie (CSA) Craig Mundie (CRSO) Revenue $62.484 billion (2010) Operating income $24.098 billion (2010) Profit $18.760 billion (2010) Employees 89,000 (2010) Website www.microsoft.com
3. History Founded By Bill Gates with Paul Allen Started selling a version of BASIC (a programming language) with Altair 1980, IBM selected Microsoft to develop a OS for its PCs Paul Allen left Microsoft in mid 1983s Microsoft introduced Windows in mid 1980s 1993, it introduced Windows NT to competed with UNIX
4. History cont. 1998, US Justice department filed antitrust charge that Microsoft had stifled Internet Browser competition and limited consumer choice 1995, Founded Microsoft Network (MSN) Experienced toughest economic downturn due to burst of dot-com bubble Aimed to position its OS and to diversify in the other software, IT services and other web based serives
5. Development factors in Emerging IT Industry Customers were expecting to get more out of their technology investments Procurement department became more involved in the IT purchasing process In Addition, CEOs became more demanding of the return on Investment (ROI) on new technology spendings
7. Trailing 3 calendar year revenue and operating profit CAGR* * based on three year growth figures for operating income, excluding certain items and stock based compensation expense for calendar year 2003. A reconciliation of the non-GAAP measures presented above to to reported GAAP operating income for the relevant periods can be found in slide #13.
8. Towards the next big thing Although the IT industry looked rather gloomy in 2006, analysts predicted, based on previous cycles, that industry would take off again in 2007 or 2008. In particular a number of factor would drive the next growth cycle for the technology. Some foresaw that software spending would reach US$325 billion by 2008, and the growth rate of the market was expected to be in the range of 3% to 7% annually.
22. Strategic Repositioning It followed low level of Diversification as its main focus of business was centric i.e. in Software and Web based Services. The Desktop software market was Matured Continued to diversify in Non-PC Markets and expanded into enterprise software, Consumer product and Service market. Re-Organized the company into three units Platform Product and Service Division Business Division Entertainment and Device Division
29. Looking Ahead….. Bill Gates knows how to compete with anyone who charges money for products… but his head explodes whenever he has to go up against anyone who gives away products for free - George Colony Chairman & CEO, Forrester Research By pursuing diversification strategy Microsoft continued to move beyond its comfort zone. Continued to hold monopoly in OS market, the only product that could challenge Microsoft’s dominant position would be Linux MSN Services were another critical component in its diversification strategy.
30. Microsoft, Google, and Yahoo! Had been fighting fiercely to become the primary gateway to the internet or the leading Web Portal SAP and Microsoft had been in partnership to jointly develop a product. Microsoft would be competing with players Sony, Apple, iMac, iPod, & Electronics Segment
31. Conclusion With it Diversification Strategy, Microsoft had entered various new market in which it had no proprietary advantage. To Sustain in a fast changing competitive landscape, It had to significantly leverage existing and new partners with established players in the newly targeted industries Need to monitor the dynamic changes in the relevant ecosystems and adjust it alliance in markets
