The document is a project report on Microsoft written by Dhruv Modi. It provides an overview of Microsoft's history, products, services, competitors, strengths, weaknesses and recommendations. Microsoft was founded in 1975 and has become a giant in the technology industry. The report analyzes Microsoft's business structure, revenue sources, research and development spending, acquisitions and investments. It also discusses Microsoft's opportunities in mobile and tablets, need to improve security and drive innovation. Recommendations include splitting Windows and applications, competing better in mobile and tablets, and focusing on security and innovation.

1. Project on Microsoft
Made By: Dhruv Modi
Higher Diploma in International
Management
Student ID: 35954

2. Abstract:
Microsoft’s mission is to provide people and businesses
with the power of computing anytime, anywhere, and on
any device and to given extent today it is the biggest giant
in the industry. In the following project the information
related to Microsoft Company, its origin and history,
various products and services offered by it are studied. Also
the study aims to understand the market position of
Microsoft by keenly observing its foreign direct
investment, key competitors and identifying its weaknesses
and strengths. Microsoft in itself has earned a huge name in
the ITES industry and its name has become synonymous
with computers today. The project has strived to encompass
the various core competencies of Microsoft and some
suggestions and recommendations for future.

3. Introduction: Microsoft
Microsoft Corporation is an American multinational
software corporation headquartered in Redmond,
Washington that develops, manufactures, licenses, and
supports a wide range of products and services related
to computing. The company was founded by Bill Gates
and Paul Allen on April 4, 1975. Microsoft
Corporation, incorporated on September 22, 1993,
their mission is to enable people and businesses
throughout the world to realize their full potential by
creating technology that transforms the way people
work, play, and communicate.
3
Microsoft Annual Report 2012, Business
description

4. Product & Services
1.) Windows & Windows Live Division: This division develops and
markets PC operating systems, related software and online services,
and PC hardware products. This collection of software, hardware, and
services is designed to empower individuals, companies, and
organizations and simplify everyday tasks
2.) Server and Tools: This division develops and markets server software,
software developer tools, services, and solutions that are designed to
make information technology professionals and developers and their
systems more productive and efficient
3.) Online Services Division: This division develops and markets
information and content designed to help people simplify tasks and
make more informed decisions online, and help advertisers connect
with audiences. OSD offerings include Bing, MSN, adCenter, and
advertiser tools.
4
Microsoft Annual Report 2012

5. Product & Services (Contd.)
4.) Entertainment and Devices Division: This division develops and
markets products and services designed to entertain and connect people.
The Xbox 360 entertainment platform, including Kinect, is designed to
provide a unique variety of entertainment choices through the use of
our devices, peripherals, content, and online services. Skype and
Windows phone are also developed under this segment.
5.) Microsoft Business Division: This division offerings consist of the
Microsoft Office system (comprising mainly Office, Office 365,
SharePoint, Exchange, and Lync) and Microsoft Dynamics business
solutions, which may be delivered either on premise or as a cloud-based
service.
5
Microsoft Annual Report 2012

6. Revenue Under Different
Business Structure
BUSINESS STRUCTURE
Windows® and Windows Live®
$19.49B
$19.03B
$18.37B
Server and Tools
$15.38B
$17.10B
$18.67B
Online Services
$2.2B
$2.53B
$2.87B
Entertainment and Devices
$6.17B
$8.91B
$9.59B
Microsoft Business
6
FY10
$22.19B
$19.08B
$23.99B
Microsoft Citizenship Report 2012, Page No. 9
FY11
FY12

7. Market Analysis of Microsoft
Direct Competitor Comparison
Microsoft
Apple
Google
Market Cap
Employees
Qtrly Rev Growth (yoy)
Revenue (ttm)
Gross Margin (ttm)
EBITDA (ttm)
Operating Margin (ttm)
Net Income (ttm)
EPS (ttm)
P/E (ttm)
PEG (5 yr expected)
P/S (ttm)
7
283.44B
97,000
0.18
76.01B
0.75
30.37B
0.36
16.41B
1.94
17.51
1.42
3.73
Yahoo! Finance, Microsoft Citizenship report
2012
392.81B
72,800
0.11
169.10B
0.40
57.38B
0.31
39.67B
41.90
9.99
0.51
2.32
292.72B
53,891
0.31
53.50B
0.58
16.81B
0.25
11.22B
33.42
26.40
1.29
5.47
Oracle
139.39B
N/A
0.00
37.18B
0.81
17.36B
0.39
10.92B
2.26
13.32
0.98
3.75
TTM : Trailing Twelve Months
YOY :Year Over Year

8. Research & Development: Key
propellant of Microsoft`s Growth
In FY12, Microsoft have invested $9.8 billion in research and
development— equal to 13 percent of revenue—focused
primarily on product development. To stay competitive, they
make strategic, long-term investments in research and
development across a broad array of technologies, tools, and
platforms spanning communication and collaboration,
information access and organization, entertainment, business and
e-commerce, advertising, and devices.
R&D
FY11
FY12
Spending
$8.71B
$9.04B
$9.8B
Spending as % of Revenue
8
FY10
14%
13%
13%
Micorsoft Citizenship report 2012, Page No. 13

9. Microsoft : Acquisitions
(From 2012)
Date
Business
Country
June 25, 2012
Yammer
Social networking
United States
July 9, 2012
Perceptive Pixel
Multi touch hardware
United States
October 4, 2012
PhoneFactor
Two-factor authentication
system
United States
October 16, 2012
StorSimple
Cloud-storage appliance
vendor
United States
October 17, 2012
MarketingPilot
Marketing automation firm
United States
January 3, 2013
id8 Group R2 Studios Home automation
United States
March 4, 2013
MetricsHub
Cloud monitoring
United States
March 19, 2013
9
Company
Netbreeze
Social analytics
Switzerland
Microsoft Investor Relation – Acquisition History

10. Microsoft : Investments
Year
2012
2009
2007
2003
2002
2001
2001
2001
2001
2001
2001
2001
2001
10
Press Release
February 12, 2012
January 12, 2009
October 24, 2007
July 28, 2003
March 25, 2002
Dec. 21, 2001
Dec. 12, 2001
Nov. 20, 2001
Oct. 10, 2001
Oct. 10, 2001
July 23, 2001
May 10, 2001
April 24, 2001
Microsoft Investor Relation – Investment History
(From 2001)
Company
24/7 Inc.
N-trig
Facebook
Immersion Corp.
SmartPipes
KT
Infolibria
i-Deal
Amicore
Groove Networks
Sendo
Telecom New Zealand
Commerce One

11. 1.) Poor acquisitions
and investments
2.)Criticism over
security flaws
3.) Mature PC markets
4.) Slow to innovate
Oportunities
11
Weakness
1. Brand loyalty
2. Brand reputation
3. Easy to use software
4. Strong distribution
channels
5. Acquisition of Skype
SWOT
Strenghts
Threats
1.) Cloud based
services
2.) Mobile advertising
3.) Mobile device
industry
4.) Growth through
Charaka Danansooriya 2012
acquisitions
1.) Intense competition
in software products
2.) Changing consumer
needs and habits
3.) Open source projects
4.) Potential lawsuits

12. PESTLE
Political
Economic
Social
12
• political intervention in new deals
• IPR
• Anti trust law
• Fluctuation and Unpredictable behaviour of foreign
currency
• Tax and Import/Export barriers
• Microsoft affecting Investors in US after 4th Quarter
results (30th June 2013)
• Accessibility of technology to different capable
people (Disabled people, poor people)
• Empowering Youth
• Donating software to nonprofits worldwide
• Realizing potential with new skills in students
Charaka Danansooriya 22-04-2012

13. PESTLE
Technological
Legal
Environmental
13
(Contd.)
• Fostering Innovation
• Microsoft put 13 - 14% of their revenue in
Research & Development
• Infrastructure
• Intellectual Property Rights
• Employee working hours, and Employement
enrichment
• Laws on business regulation (Against Monopoly
and forced competitor acqusitions)
•
•
•
•
Saving Energy & Green IT
Carbon Neutral
Cloud Computing
Requesting all Customer to recycle their product
after using

14. Recommendations
1. Divestiture
At a minimum, Microsoft's Windows operating system monopoly should be
split off into a separate company from the application and Internet divisions.
This would end the inherent opportunities for abuse of one company competing
in application markets while controlling the "field" of competition as well. It
may also prove necessary to separate Microsoft's application and Internet
divisions.
2. The mobile market
14
The mobile space could be one of the biggest issues facing Microsoft. The
company's Windows Mobile platform is still toiling away in a market that's
being dominated by innovative, touch-screen platforms, like Apple's iOS and
Google's Android operating system. Microsoft plans to release Windows Phone
7 later this year to compete with those providers, but it's debatable just how
viable the company's platform will be. By being late to the new mobile market,
and forgetting what consumers really wanted, Microsoft has some serious
explaining
www.eweek.comto do when it finally delivers Windows Phone 7.

15. Recommendations
3. Tablets
Although Steve Ballmer talked about tablets at his company's Worldwide
Partners Conference, it's quickly becoming clear that Microsoft doesn't have a
tablet strategy in place that can even come close to rivalling Apple's iPad. Part
of the fault for that can be attributed to HP, which originally planned to offer a
Windows-based HP Slate but recently announced that its tablet will run WebOS
instead. Some might believe that HP's decision to go with WebOS has more to
do with its recent acquisition of Palm. But it might also tell the market that
Windows isn't as ready for tablets as Microsoft wants everyone to believe.
After all, HP would have gone with the best platform it could. It may be saying
that the best platform isn't Windows.
4. Security
Security continues to be one space where Microsoft misses the mark both in the
consumer market and the enterprise. With each Patch Tuesday, the company is
forced to deliver several updates to protect Windows users from potential harm.
It has even been forced to patch Office, Internet Explorer and other software
products. That's not a good thing. And it hurts its chances of fully appealing to
consumers and enterprise customers that are deeply concerned with losing
important data. Security means the difference between success and failure in
today's marketplace. And so far, Microsoft isn't doing well enough.

16. Recommendations
5. Innovation
Innovation has always been a problem for Microsoft. Although Windows was
an extremely innovative product when it first launched, Microsoft has failed to
deliver anything that even comes close to matching the innovation its
competitors have developed since. As much as the company wants to be
considered a major player in the tech space, it will not achieve that if it
continues to deliver iterative updates to products that customers don't want.
Innovation reigns supreme in today's tech market. And it's on Microsoft to start
innovating to meet those demands.

17. Bibliography
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[Accessed 21 July 2013].
Interbrand, 2012. Best Global Brands 2012. [Online]
Available at: http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-2012-Brand-View.aspx
[Accessed 2013].
Microsoft Corporation, 2012. Annual Report 2012, Redmond: s.n.
Microsoft Corporation, 2012. Citizenship Report, Redmond: Microsoft.
Microsoft Corporation, 2012. Form 10K 2012, Washington, D.C: UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
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Available at: http://www.microsoft.com/investor/Stock/AcquisitonHistory/All/default.aspx
[Accessed 21 July 2013].
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Available at: http://www.microsoft.com/investor/Stock/InvestmentHistory/All/default.aspx
[Accessed 20 July 2013].
Pandey, A., 2011. What is PESTLE. [Online]
Available at: http://bpmgeek.com/blog/what-pestle-analysis
[Accessed 12 July 2013].
Smith, J., 2013. The World's Most Reputable Companies. [Online]
Available at: http://www.forbes.com/pictures/efkk45ehkhg/no-7-microsoft-2/
[Accessed 21 July 2013].
Steven A. Ballmer, C. E. O., 2013. Future and Opportunities for Microsoft, Redmond: Microsoft.
Yahoo, 2013. Yahoo! Finance. [Online]
Available at: http://finance.yahoo.com/q/co?s=MSFT+Competitors
[Accessed 20 July 2013].