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Caso administración Microsoft

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    Caso administración Microsoft Caso administración Microsoft Document Transcript

    • HKU91a t*h*, A si a C a se Researsh Centre THEI"}ISIVEfiSIfY HO¡G OF KONG lfmN w Kam Ka Serip$ALI FARHOOMAND MICROSOFT: THECREAT lS BURNING OUT? Microsoft was built on innovalion, and ourfuture - Bill Gates,chairman,and SteveBal chief exeffive officer. MicrosoftlIn July 2010, Microsoft, the global leader servicesand solutions.announcedrecordrevenue US$62.48 of billion for the ne 2010,an increase ofTYofromthe previousyear. This cameas a relief to i the previousyear had seenthecompanyreportits first-everannualdropFounded 1975,Microsofts in worldwide. The companyhadtraditionally been regarded bei as ge of softwareand services.However,for some time-particula of the last decade-it had been increasinglycriticised for havine massivedisruptivepotential in the market butrepeatedly allowing it lp away. huge employeebaseofbright and talentedengineershad not kept up with I innovationdisplayedby its competitors,whether itwas Apples iPod or i searchengine,NintendosWii, AmazonsKindle, orsocial services ás Facebookand Twitter. Despite its undisputedfinancialsuccess, Mic being described as having become a "clumsy, uncompetitiveinnovator".2 In a reflectionof this concern, on26May 2010,Microsoftspositionasthe technoloev,{i valuableplayer was overtaken the first time in manyyears, for companys US$219.2 billion marketcapitalisation almostUS$3 bybilli Mi"rorofi Microsoft@Q{) "Annual Report", Letter to Shareholders.i Brass,D. (4 February2010) "Microsofts CreativeDestruction", TheNew YorkTímes, (accessed May 2010). 18 B. (27 lllay 2010) "Apple TopplesMicrosofts Throne", CNNMoney.com, (accessed May 2010). 29Havovi Joshi prepared thk case under the supemision of Professor AIi Farhoomand for class discussion. This case is notintended to show efective or ineffective handling of decision or businessprocesses.@ 201I by The Asiq Case Research Centre, The Universily of Hong Kong. No part of this publication may be reproduced ortransmítted in any form or by any meaw----electronic, mechanical, photocopying, recording, or olhemise (including theinternet)-without the permission of The University of Hong Kong.Ref. t I /484C Thisdocument authorized useonlyby is for Copy¡ng posting an infringement or is of copyright. Permissions@hbsp.harvard.edu7.783.7860. or 61
    • 111484C Mic¡osoft: the Creative ls SparkBurning Out?On 4 October2010,GoldmanSachs downgraded Microsoftsstock,which it had initial public offeringin 1986:sincethe companys In our view the intrinsic value of the shares cannot be realized if the status quo remains intact. lVe believe that top-line momentum and hence investor sentimenton Microsofts core Window,s and Officefranchises is improveuntil the company gains a.firmerfoothold in thegrowing to mobile devices. ... In addition. we have increosed caution a more elongated PC refresh cycle, combined with the newer cannibalization from tablets, where Windows does not yet - SarahFriar, GoldmanWhy was Microsoft no longer creatingthe truly disruptive and technologicalproductsand servicesthat the companyusedto pride itself on? could the companyonceagainregainits position as the powerhouse technologyi of Historyof MMicrosoft. the behemothsoftwaremanufactunng was foundedby two schoolfriends,Bill Gatess Paul Allen,6who had startedwriting and programswhen they had justenteredtheir teens. In 1975. Allen came ac of the hobby magazinePopularElectronics, which was selling by mail Altair 8800, a newly launchedmicrocomputer released MITS kit by and Allen were convinced thatthere was great potential for software the Altair and other desktopcomputersthey believed would fol wrote a programminglanguagefor themachine, released programand the ir. Later that year, Gatesdroppedout ofHarvardto work full-time de languages the Altair. Subsequently, forAllen toojoined MITS as . A few monthslater, Gatesand Allen set up an named Micro-soft. an abbreviation of"microcomputerso for 1975totalledall of US$16"000. was from Itthis humble start that to achieveits mission"to help peopleand businessesthroughoutthe world potential".TOne of the points in the companyssuccess camein 1981,when it licensedMicrosoft Disk ("MS-DOS"),8a l6-bit operatingsystemfor the newpersonal ffi being developed by the International Business Machines t the time, Microsoft was still a fledgling companywith fewer than40 about US$7 million in sales,while IBM was a global giant with over325 annualrevenueof almost US$30 billion.t0Microsoft nesotiated a contract with [BM, which enabled it to successfullypiggyback on the of the IBM PC. In 1985, the company signed a joint development with IBM. H. (4 October2010) "Goldman DowngradesMicrosoft (MSFT), as Wall StreetBeginsto Throw In the Towel", (accessed October2010). 7 the precocioussecondchild ofa lawyer and a teacher,was born in 1955in Seattle,US. was bom in 1953in Seattle.His father was an associatedirectorofthe University ofWashington library For further details,seeMicrosofts website:hftp://www.microsoft.com.8 Microsoft bought QDOS, or "quick and dirty operatingsystem",for US$50,000from a Seattleprogrammerand renamedit MS-DOS.9 when IBMs deal with Digital Microsoft was actually IBMs secondchoiceas a softwarepartner,and was only approached Research not go through. didr0 Tate, C. (22 Apnl2000) "Microsoft Corporation",llrstoryLink.org, http://www.historylink.oreyindex.cfm?DisolayPaee=outout.cfm&file id:2294 (accessed May 2010). 27 2 Thisdocument authorized useonlyby , is for Copying posting an infringement or is of Permissions@hbsp.harvaro.eou7.783.7860. copyright. t¡r 61
    • 11t484C Microsoft. the Creative ls SparkBurning Out?1985was alsowhen Microsoftshipped Windows,a graphics-bascd versionof MS-DOS.1W]-usageof words such as "menu" and "icon" becamepopular,and helpedsimplifu PCs for ldy""l. ;gJusers.Windows remainedone of the biggest contributorsto the companysrevenue¡gffirfrequentupgrades being madeevery few years.In 1986,Microsoft went public withofferingof US$21per share, resultingin Gatesand Allenrrbecoming billionaires ovIn 1989, the company launchedthe Microsoft Office software suite, which, a-tóhflwitfYlWindows,becameone of the companysflagshipproducts.In 1995,Miccould no longer ignore the growing significanceof the intemet and the-S€and launched the Microsoft Network ("MSN"), a web portal that o ofintcrnetservices.lt was in 1997-98 that Microsoft faced the first of its legal problemsw ly andantitrustissues,which continuedto plaguethe companyfor manyyears.Bottffie US JusticeDepartmentand the EuropeanUnion found that Microsoft had."breached antitrust law bybundlingits Windows operatingsystemwith otherMicrosoft softwarg;including the InternetExplorer browser.and Windows Media Player-thereby.ptifling*cofuretition and limitingconsumer choice.r2 The companywas forced to uniforml{flicensefuso-perating systemsandallow computer manufacturersto include their competifrfu.s softare with Windows. InEuropetoo, Microsoft had to offer European computermanufaC#is a stripped-down versionof Windows by taking out its media player " As a result of theselegal challenges,Microsofts legal costs for the year ending 30 June amounted a whoppingUS$1.8 tobillion, of which a staggering US$1.4billion paying the fine imposedby theEuropean Commission. 2In 2001,realisingthe impactthat the Íl,l|arketmay have on its traditionalPC and software domains,Microsoft videogame console, Xbox. In 2002, theMicrosoft its partners and launchedffié hich could function as a sheetof paper,and accepted data input by sw_eral ffi>des, h a s mouse,pen andvoice.In 2009,Microsoft launchedWi ,w he first PC operatingsystemby Microsoft thatdid not require more to run than prior versions,and was touted by thecompany as the "fastest system history"ra in [seeExhibit 1]. s Areasof BusinessSince its incept icrosoft had been in the business of "creating technology thattransforms *&ort, play, and communicate".rs companywas truly global; Theas of April offices in more than 100 countriesand a global headcount over of , the fiscal year ending 30 June 2009 was a difficult year for ny reportedits first-everannualdrop in sales[seeExhibit 2]. While it 44 billion in sales, wasa3.2% fall from theprevious this yearssales of I Net profit haddropped l7Yo,from US$17.68 by billion to US$14.52 billion. , with the successful launchof windows 7 and office 2010.the vear endins30 June20t0 , and the company stated record revenue of US$62.48 billion, with net profitof US$18) billion [seeExhibit 3 for financial data].The companyhad attributedthe fall rn revenueacrossmost segments largely to the global recessionand a weak PC market^ In 1983,Allen left Microsoft when he discovered that he had developedHodgkins disease." US Department ofJustice (30 August 2007) "Review ofthe Final Judgments the United States by and New York Group",.^ http://www.iustice.eov/aflcases/ms*index.htrn (accessed September 27 2010)." Lower, J. (2005) "Microsoft Corporation",Hoovers CompanyInformation.la For further details,seeMicrosofts website:http://www.microsoft.com. lDld. 3 Thisdocument authorized useonlyby is for . copyingor posting an infringement is of copyright. Permissions@hbsp.harvard.edu7.783.7860. or 61
    • 11t484C ls SparkBurning Microsoft: the Creative Out? Segments CompetitionOperating and fuMicrosoft generatedrevenue "by developing,manufacturing, licensing,and supponinga X{# %# ru *range of software productsand servicesfor many different types of computing devicéé".k "ffiThe companysoperations were broadly divided into the following five segments:ü:ffiffiServer and Tools; Online Services Business; Microsoft Business Division; and tffiflEntert¿inmentand Devices Division [see Exhibit 4 for a breakdownof financial datfubfsegmentl.rT ##@h F s;.wClient included Windowsproductfamily and wasThis segment the relationshipswith PC manufacturers. the fiscal year 2009,this segment For contributed ímately 25%o camefrom origito overall revenue.Of all Client revenue,80o/o nufacturers,which pre-installedversionsof Windows on their machines. weakness the PC inmarketin the fiscal year 2009resultedin a decrease this in The Windowsproductfamily facedcompetitionfrom the productsof manufacturers. suchas Apple, Canonicaland Red Hat. It also had to compete and new products(particularlymobile devices)that had the potential to for the traditionalPCsthat Microsofts softwarewas madefor.Server and ToolsThis segmentprimarily targetedimproved efficiency for developersandtechnologyprofessionals. comprised It and client access licencesforWindows Serverand other serverofferi offered training and consultingservices. The principal contributo half of this segmentsrevenue-was multi-year licensin Server and Tools segmentrecordedannual erowth of about 8% fiscal year 2009, despitecompetitionfrom a rangeof companies Microsvstems.Online ServícesThis includedservices advertisingplatform for publishersand advertisers;personalcommunications as e-mail and instant messaging; online informationservicessuch ine and Live ; and MSN portals aroundthe globe. The majority ofrevenuewas through online advertising,digital marketing and advertisingagencyservices, and bandinternetaccess subscribers.During the fiscal year 2009,revenuedec 4oA from the prior year, primarily due to a decrease online in the overall business environment. also due to a fall in access buti9l"#üq migrating to broadbandor other cheaperserviceproviders.The with increasesin the cost of revenue, largely on account of related to online traffic acquisition, data centres and equipment, and Íffifffi segment,particularly Microsofts search engine Bing, faced aggressive [lion from AOL, Google,Yahoo! Inc ("Yahoo"), and many other websitesand portalsthat prffid contentand online offerings of all types to end users.In July 2009, Microsoftannouncedthat by 2010 it hoped to improve the effectivenessof its search servicesby ing into a l0-year agreement with Yahoo, under which Microsoft would provide the usive algorithmicandpaid search platform for Yahoo websites".2016 For fuñher det¿ils,seeMicrosofts website:htp://www.microsoft.com. (accessed" Microsoft (19 Noyember2009) "Fast Factsabout Microsoft", htto://www.microsoft.com/presspass/inside-ms.mspx I June2010).l8 Online advertisinefell 37-a droo of US$73 million.n A"."r, reuenue us$72 million, or about28%. fJl20 For further details,seeMicrosofts website:http://www.microsoft.com. Thisdocument authorized use onlyby t is for Copying posting an infringement or is of Permissions@hbsp.harvard.edu7.783.7860 copyright. or 61
    • 111484C Microsoft: the Creative ls SparkBurninq Out?Microsoft Business DívisionThis was the largestcontributor(aboutonethird) of Microsofts total revenue,and priincluded the Microsoft Office suites; Microsoft Dynamics:2rand Unified Cornmunirbusinesssolutions.The revenuefrom this segmentfor the fiscal vear 2009 remainedunchanged sincethe previousyear at.US$18 billion, over 90%o which was gen ofthe Microsoft Office packages.This segmentfaced competitionfrom severalotheiapplicationvendors, suchasAdobe,Apple,Corel,GoogleandIBM. .# .. is$*F* "*# ñtThis segmentcomprisedthe Xbox videogamesystem(including conffis and accessories.¡,Xbox Live operations, Zune digital music and entertainment the device,Mediaroom,mobileand embedded deviceplatforms,the Surfacecomputing WindowsAutomotive.This segment was alsoresponsible developing for Microsofts of consumer softwareandhardwareproducts and saw to all the retail marketing and Microsoft Office andWindows operatingsystems. For the fiscal year 2009, acrossmost of thesegmentsofferings,resultingin an overall declineof segment about6% by(US$453 million). This business intensely was competiti f productandprice,withthe majority of competition to the companys Xbox business coming from re IndustryMicrosoft faced competitionfrom a the software industrv. where itsprincipal product offeringswere the Mi applicationsand the Windows family.Microsofts Entertainment and lso competedin the videogameindustry;however, its contribution of I3% nys overall revenue was not assignificant.The technology had steady growth until 2008, when the globalhnancial crisis caused investments. a result, IT purchases the US As inshrankalmost 9oAin to ForresterResearch.22 2010, it was expectedto Forpick up, al the rangedfrom a conservative 2.8Yopredictionby researchfirrn Gartner lto US$958 billion) to 7.7Yo, predicted Forrester.23 as byIt was in Apples value signified an important cultural shift,wherebyit businessneedsbut ratherconsumer tastesand preferences were thatthe ing technology.2o Traditionally, the software industry had revolved ienlserver approach.However, it was observedthat computational ility increasinglybeing incorporatedinto non-PC products,such as phonesand her important trend was in cloud computing,which was a major shift combiningthe intemetand computing,with immenselyscalable IT-relatedcapabilities , content and data being maintained in remote servers and provided as services to gh computers, phonesand other deviceson demand,therebyfreeingthe users the responsibilityand financial burden of managingthe technologyinfrastructurethat Dynamicsproductsprovidedbusiness solutionsfor financial management, customerrelationshipmanagement, chain management, anal¡ics applicationsfor small and medium-sized and businesses, large organizations, and- divisionsofglobal enterprises. Bednarz,A. (5 January2010) "Tech IndustryTrends2010: A Year ofGnardedHope", PC World, htto://www.pcworld.com/article/l 85828/tech industrvtrends_2O I 0_aJear of euarded_hop€.htnl (accessed I September.. 2010)." rbid.to H"lft, M. andVance, (26May 2010) A. "ApplePasses Microsoft No. I in Tech" TheNew as , YorkTimes,htnJlwww. nwimes.com/2010/05/27ltechnolod2Taople.html?reFtechnolosy June (accessed l9 2010). This documentis author¡zed use only by for . Copy¡ng posting an infringement or is of copyright. Permissions@hbsp.harvaro.edu7.783.7860. or 61
    • 111484C Microsoft: the CreativeSparkBurningOut? lssupportedthese services.25 This was expectedto have an evolutionary effect on theftf,;industry. In 2008, a Gartnerreport on cloud computingstatedthat it had the opportunity"bshapethe relationshipamongconsumers IT services,thosewho use IT servicesand¡ffie ofwho sell them".26 Another significant expectation from the software industry "ffi"s$projectedboom in the mobile devicesindustry,which industryexpertshad surmisedto tWf[íefuture of the personalcomputingtechnological world.27KeyCompetitorsMicrosofts key competitorsin this industry were many. SomeofApple, IBM, Googleand Yahoo.Apple Fortunemagazine""ffi Rpplethe:worldsIn March2010, thethirdtimein arow, for mostadmiredcompany".28 time Applehadwon the voteby the@st-ever marginseen This for "6ry[%firstplace. What makes Apple so admired? Product, . This is the company that changed the way we do everything music to design products to engage with the world aroundS, 1rs ffack recordfor innovation and fierce consumer loyalty translates tremendous respect qcross highestranks. business Tkaczyk, FortundeApple designed, manufactured andmobile communicationdevicessuch the iPod rangeof portabledigital musicand video players,and a variety o and services.However,Apple hadnot alwavs tastedsuch was bo-foundedby a pair of teenagers, SteveJobs and Steve Woznr le and Microsoft revolutionisedthe personalcomputing industry in 1970s, icrosoft soon left Apple far behind. By 1985, Jobsresigrred chairman as after ing lost a boardroom battlefor control of the company.The turnaround started w Jobsreturnedto Apple. His legendaryvision for whatcustomerswanted, coup investmentof US$150 million from Microsoft, set thecompanyon a to recovery.With the i musicplayersand creationof the iTunesonline music store,Apple came music distribution businessand competewith such giants asSony released anotherrevolutionaryproduct, the iPhone,which yetsoon the leading brand in mobile phones.In 2010, the market was onceagaindi Apple product,the iPad,a tablet computerwith the potentialto change with their devices.3o betweenthere were severalother breakaway In suchas the iMac, the iBook, Mac OS X and the MacBook. releasés, known cloud applicationsincludedGoogle Apps, iTunes,Facebookand Hotmail A. (8 July 2008) "Keep an Eye on Cloud Computin{, Nework World, accessed June2010). 17 Lashinsky,A. (7 June2010) "Steve Ballmer Doesnt Get It", For¡ure, htto://tech.fortune.cnn.com/2010/06/07/steve-ballmer- doesnt-set-it(accessed June2010). 30tt Ttu.wf C. (22 March 2010) "Worlds Most Admired Companie CNNMoney.com, s", accessed June2010). 17, lDlo.30 Microsoft as No. I in Tech", TheNew York Times,htIpL/www. Helft, M. and Vance, A. (26 May 2010) "Apple Passes n)¡times.com/201 (accessed 9 June2010). 0/05/27ltechnology/27aoole.html?retstechnoloe.v 1 Thisdocument authorized useonlyby f is for Copying posting an infringement or is of Permissions@hbsp.harvard.edu7.783.7860. copyright. or 61
    • 11t484C Microsoft: the CreativeSparkBurningOut? lsThus while Apple grew increasinglyinnovative,Microsoft struggledto createnewthat could disrupt the market.Therewas hencelittle doubt ttrat "Apple was viewed by WUS$219.2 billion marketcapitalisation almostUS$3billion.32 byIBMIBM was the worlds largestprovider of computerproductsandmajor operations comprised providing IT infrastructure servicesand services,professionalservices and application outsourcing services, midd and operatingsystems software, business solutions requiring advanced and storagecapabilities,and facilitating clients acquisitionof IBM systems, re and services. IBMhad taken significant steps to improve productivity and to businessmix to moreprofitable segments. a result, despitethe downturn in thn*i As resultine in revenuefallingby 5% to US$95.8 billion as of 31 December 2009 t marginroseforthe sixth consecutive year to 45.7%.Pre-taxincome an increase 9oAto byUS$l8.1 billion, its highest ever[seeExhibit 6 for financiIBMs intellectualcapital portfolio was huge.The y held more patentsthan any othercompanyin the world, and each year it " The companywas also acutelyawarethat it was not enoughto merely createi and radicallynew technologies; italso had to ensurethat thesecould huge product portfolio and startgenerating revenue.One of the ways IBMs InnovationJam in2006. The InnovationJam brought employees and stakeholders, was a andforum for participants brainstorm to new technologies work on business andplans for key ideas.oGoogleGooglewas founded by Brin and Larry Page,eachof whom had nearly30Yovoting control of the of 20 The companywas the leading intemet searchengineoperator and offered resultsfrom billions of web pages.Nearly 97Voof thecompanys [n 2008 and 2009 was generated through searchadvertisement sales,asadvertiserscou yer relevantads targetedto searchqueriesor web content.Along with tpanyhad alsoexpanded productrangeto includeproducts itssuchas Maps, GoogleApps, and GoogleNews. Google subsidiariesincluded Y DoubleClick. Despite the global recession,Google increasedits 31 December 2009to US$23.7 million from US$21.8million inthe was primarily a result of an increasein the number of paid clicks tsmgprogrammes, ially ottsetby ¿ decreasen the average partrallyoffset a i costper click sers[seeExhibit 7 for financialdata]. -DeWitt, P. (27 May 2010) "Mioosoft in the SteveBallmer Era", Fortune, (accessed May 2010). 29 Middleware softwareenabledclients to integratesystems,processes applications and acrossotherwiseincompatiblesoftware platforms.3a For further details,seeIBMs website:http://ww.ibm.com.35 B.¡elland, and Wood, R. (l October2008) "An Inside View of IBMs Innovation Jam", MIT SloanManagementReview, O. http://sloanreview.mit.edr¡/the-maeazine/articles/2008/fall/50101/an-inside-view-of-ibms-innovation-iaÍ/2 (accessed18._ Septembero 2010). Ibid. Thisdocument authorized use onlyby is for )opyingor posting an infringement is of copyright. Permissions@hbsp.harvaro.eou7.783.7860 or 61
    • 1U484C Microsoft: the Creative ls SparkBurning Out?Google, its Android with operating system mobile and advertising, by 2010perceiv.ffi wasbe a new andpowerfulrival to the industryleader,Apple,in mobiledevices. was alSb It %[** * *4SS-:movingahead Apple with internet-connected of televisions, areawhich could ha, a , anbrilliant future. According to Tim Bajarin, a technologyanalyst,"The battle has shiftedMicrosoft againstApple to Apple againstGoogle.Apple has a significantlead.But GooS¡ffrsgoing to be a powerful competitor."3T ($iYahoo! :ffi t{iYahoowas formedin 1994by two graduate students,David Fi Yang. Thecompanywas a leadingonline portal, attractingcustomers its to iteswith amix of news, entertainment and shopping.The company generated its revenue byproviding marketingservicesto advertisersacrossa majority of its sites.It shed contentin over 25 languages, Yahoo remainedthe numberone porta and somemarkets,includingMalaysiaand Hong Kong.38 The year ending31 December a declinein revenueof about l0oá as comparedto 2008, which the company ilv to the economicenvironment[seeExhibit 8 for financialdata].3eYahoo had a reputationfor being bureaucratic and slow to ffi especiallyin contrasttoits rival Google.a0 a major step taken to In this cha ge, in 2006 Yahoo formedBrickhouse, offsite incubatortaskedwith an new innovations and ideas reachedthe marketas soonas possible.As statedby il, the headof Brickhouse,"The goalis to take the idea, develop it, and make sure senior management quickly. Weneedto iterate,seecustomer reactions,andMicrosoft ProductsWhen launched,Mi lly been judged harshly by reviewers.Forinstance.David Ki Fortune magazine,describedthe initial releaseofWindows NT as a bug-riddenMicrosoft mess".42 Microsofts first realexperience of the with its inefficient approach to new product bubbleburst in 2000. It then found that the erstwhilenear-monopoly it h operatingsystems and office softwarewas being challenged new, bysmarter,smaller mbler competitors,who were launching popular intemet programssuchas email at a rapid pace.While Microsoft still had a winner in itsflagship rs, this too had evolved into a highly complex product that was It to upgradeandtest. isms levied againstMicrosoft was its traditionalpreference higher-margin for over the riskier business hardwaredevelopment. of While this made sense,it also implied that the company could not match its competitors highly innovativeproducts,thus placing it secondto such companiesas Apple. Asstatedby3cott McNealy, the co-founderand chief executiveof Sun Microsystems,"Steve ft, M. and Vance,A. (26 May 2010) "Apple Passes Microsoft as No. I in Tech", TheNew York Tines,http/lwww. (accessed June2010). 19 (accessed" Co-S"or" (2010) "PressRelease", http://comscore.com/Press-Events/Press-Releases/2010/8/.../engL{JS 29 Seotember 2010).39 For fi¡rther det¿ils,seeYahoos website:http:i/www.yahoo.com.a0 Jana,R. (15 November2007) "Case Study: Yahoo!s Hot InnovationInctbatof, BloombergBusinessweek, http:/lbusinessweek.com/innovate/content/nov2007/id20071 I l4_614922.htm(accessed September 30 2010).ot Ibid.ot Ki.kput i.k, D. (26May 1997)"He Wants All Your Business and Hes Startingto Get lt",CNNMoney.com, monev.cnn.com/maeazines/fortune archive/1997/05/26i226644lindex.htm (accessedl2August20l0). This documentis authorized use only by for Copyingor postingis an infringement of Permissions@hbsp.harvard.edu7.783.7860. copyright. or 61
    • 11t484C Microsoft: the Creative ls SoarkBurnino Out?(Jobs)saw way early on, and way beforeMicrosoft, that hardwareand softwareneeded g", td-tmarriedinto something that did not requireeffort from the user.Apples productsare sh.itrfrl*** * -Wwrappedandreadyto go.{3 ,#lilfffiAnother criticism of Microsofts new productswas that they tendedtowards,-rOtronffi Microsoft has long been dissed by the digerati as a big Microsoft has more than oncefound itself deJendingits development in court ... In each contest, Microsoft itself by citing itsfundamental right to "innovate." Yet its modus has most often been to replicate and try to improve upon others ideas, and then absorb them into its products. Thats much.frowit overthran Lotus and WordPerfectwith its Olfice suite in the early 1990s, how it is attacking Oracle and IBM with its soffware today, how it hopes lo displace Suns Unix-based Íleb server products with Windows 2000, and outdo Yt andwith its oft- reconfigured MSN onlineservices. theselucraXlfu¿digi franchises were All pioneered by others and grau sofast that Microsoft itive brain trustfound it impossible just sit by and to - Brent Schlender, FortuneooThe tendency Schlendercriticises was by Microsofts foray into thevideogameindustry. Microsoft had entertainmentsector risht until2001,when it couldno longerignorethe success the Sony PlayStation of and itspotentialthreatto Microsofts high ional sofhvaremarket.In 2005.when itlaunchedthe Xbox 360, a new console, discovered it that this productcould not meet the chal by the smaller,cheaperand technologicallyfar inferior Wii simply sweptthe videogame industry.Hence, the question ined: whylwas there a lack of truly innovative and disruptiveoroductsfrom the an email sent to Gatesand Ballmer in Januarv2004.Microsoft executiveJim Al %# I am not ffig{tow the company lost sight of what matters to our customers ¡both bw$W&f"Wfume) the most, but in my viau we lost our way. I think our óf what bug-free meqng what resilience means, what full what security means, what performance means, how applications are, and really understanding whqt the most problems [ourJ customers face are. I see lots of randomfeatures great vision, but that doesnt translate onto great products. - Jim Allchin. Microsoft executivea5 $icisedso much.As notedby Kirkpatrick, "For 15 years,asthe companyhasrackedup one ry after another,jealous observersand rival executiveshave carpedthat Microsoft is more than an overbearing marketerpopularizingwork bought or appropriated fromo H"|ft, M. and Vance,A. (26 May 2010) "Apple Passes Microsoft as No. I in Tech", TheNew York Times,htto://www. nvtimes.com/2010/05/27ltechnolosv/27apple.html?reFtechnoloey (accessed June2010). l9* S"hl*d.., B. (28 June2001) "Microsoft: The BeastIs BacV, Mutual of America, *rvw.muh¡alofamerica.com/articles/Fortune/2001 28/micro.aso 06 (accessed August 2010). 12a5 Allchin, J. (7 January2004) "Jim Allchins Mac Message: The Full Text", Seattlepi.com, http://blos.seattlepi.cor/microsoff/archives/1 I 0354.asp(accessed 5 August 2010). I This document¡s authorized use only by for Copying posting an infringement or is of Permissions@hbsp.harvard.edu7.783.7860 copyright. or 61
    • 11t484C Microsoft: the Creative ls SparkBurning Out?This perceptionwas supportedby Microsofts long list of acquisitionsin the iExhibit91.Researchand Development Microsoft at budgetandMicrosoftundoubtedly a largeresearch had someof thefinesrffi:industry. As Ballmer commentedin May 2010, the company wgld be fipendin!-aboutUS$9.5 billion on researchand development("R&D").a8However, critics often complainedthat Microsofts R&D efforts appeared inadequate recognising in and getting its opportunitiestiming right in the highly volatile technologyindustry.ForWeb TVs, and too late in the caseof the mobile devicesindustry ly seenas the future ofthe software industry). Microsofts Windows phone was to catch up with otherindustryplayers,particularlyApples iPhone. Ballmers reminiscing thqt Microsoft was on mobile s software only draws attention to the fact that the cash, power, research and market might have left it imatelf*íiothing in the phone qrena. Thats not good.If the growth is in devices qnd Microsoft cant shoof straight on anything other than g laptop (and, to give credit where its due, gaming devices), thei cash llow and morket position in the corporate nothinggoingforward. In lhe area of computing where thrashed by Apple, it is nothing more than an extremely ryet dysfunctional and emotional Iy scarred company. , senioreditor at large,FortuneaeMicrosoft did agree t ation was a problem; however, it offered thefollowing rat oneofi At the highestlevffigffiabout innovafionin relafion to its ability to have a posititgimptactin thlf,orld. For Microsoft, it is not sfficient to simply have the world. ?or MicrosoJt, sulJicient a good iHffir a greqt idea, or evena cool idea. l4e measure work by its our broad imffaffigNgw, you could argue that this should havehappenedfaster. And s.ffigsYfffies. Butfor a companywhose s6ffipps-"ÍWes. Butfor company whose products products touchvast numbers touchvastnumber; of p@le, wffimatters is innovationat scale,notiust innovationat speed. communication, vice-president corporate X. Shaw, of Microsofdo %.%%#mnk[f rcrbat ict, D. (26uay 1997)"He WantsAll Your Businessand Hes Startingto Get It", CNNMoney.com, (accessed August 2010). 12 for Business(2010) "Microsoft Corporation-{ompany Profile, Information, Business Description,History, Information on Microsoft Corporation",h@://www.referenceforbusiness.com,/history2/l4,Microsoft- (accessed August 2010). 12 Nashville TechnologyCouncil Address",Microsoft Press, Ballmer, S. (10 January2010) - http://www.microsoft.com/presspass/exec/steve/2010/01-20.ntc.mspx (accessed May 2010). 24av Lashinsky.A. (7 June2010) "Steve Ballmer Doesnt Get It", Fortuze, http://tech.forn¡ne.cnn.com/2010/06/07lsteve-ballmer- doesnt-set-it(accessed June2010). 3050 Shaw,F. (4 February2010) "MeasuringOur Work by Its Broad Impact", The Oficial Microsoft Btog, (accessed http://blogs.technet.corn/b/microsoft_bloe/archive/2010/02l04/measuring-its-impact-by-its-broad-impact.aspx 3 September 2010). 10 Thisdocument authorized useonlyby is for . Copying posting an infringement or is of or 6f7.783.7860. Permissions@hbsp.harvard.edu copyright.
    • 11t484C Microsoft: the Creative ls SparkBurning Out?CorporateCultureat MicrosoftDespite companys the wealth youngtalentaround globe, of the Microsofts corporate cuhad often been blamed for the companys inadequate performance in creating disproductsin the recentpast. As former vice-president Microsoft Dick Brass of"Unlike other companies, Microsoft never developeda true systemfor innovatioo.,fu#*é Mmy former colleagues arguethat it actuallydeveloped systemto thwart innovation. a ffiitehaving one of the largestand best corporatelaboratories the world, apd the luxury offiot inone but threechief technologyofficers,the companyroutinely manage;$ffirustrat¿ e$.ts fhg manageq$ffirustrat¿ kof its visionarythinkers."sl --S sW*In the same article, he continued to lament that internal competil$n had "created adysfunctionalcorporate culture in which the big established are allowedto prey uponemergingteams,belittle their efforts, competeunfairly against for resources, and overtime hectorthem out of existence. not an accidentthat Its the executives charge inof Microsoftsmusic,e-books, phone,online,search and over the past decadehave1eft".52 pses As Apple grew increasingly nimble and i. , Microsoft has struggled to build desirable updates to its and to create large new businesses in areas like game phones and Internet search. Microsoft, which is a Dow Jones industrial average, has lost half its value andVance,A., TheNew York Times53Microsoft was undou I and profitablecompanyin the technologyworld.to The two prima g the major part of its annualrevenue,namelyWindows and the Offi te, were widely used aroundthe world. However,itwas being increasingly asffifollower whose productsin recentyears had been nomatch for the innovative ical prowessdisplayedby suchcompetitorsas Apple,Google,Nintendoand AmazóWtiile it would be unduly harshandunreasonable write offtoMicrosofts hug%*ecesses and future prospects, was clear that the softwaregiant needed iturgently to revisi@rategy for the future to meet the challenges createdby the disruptiveproductsofferffkM;*sQfttitors. What courseof actionwas available?" Brass,D. (4 February2010) "Microsofts CreativeDestruction",TheNew York Times, htto://www.nvtimes.com/2010/02l04ooinior/04brass.html(accessed May 2010). l8 IDIO.53 H"Ift, M. and Vance,A. (26 May 2010) "Apple Passes Microsoft as No. l in Tech", TheNew YorkTimes,htloilwww. nwimes.com/2010/05/27ltechnolosv/27aoole.htril?retstechnolosv (accessed 9 June2010). Ito lbid. 11 This documentis authorized use only by for Copying posting an infr¡ngement or is of copyright. Permissions@hbsp.harvard.edu7.783.7860. or 61
    • 11t484C Microsoft:ls the CreativeSparkBurningOut? MILESTONES MICROSOFTS EXHIBIT SIGNIFIGANT l: lN HISTORY I 975-2009 Microsoft was foundedbv Bill Gatesand Paul Allen. Their first of BASIC. a PC computer The companystartsselling an enhanced versionof BASIC chip clients such as General Electric and Citibank. It developing new languages such as Assembler,therebyenabling PC usagein scr Gatesand Paul Allen moved from being "partffi to"fftes becoming identandAllen vice nresident the comoanv of The first internationalsalesoffice was established in Microsoft launchedthe highly successful microprocessor a printed circuit board t on into the Apple II computerand allowed thousands of run with onlv minor modifications. Microsoft ceased being a partnersffi, anffivas incorporated as a privately held corporationwith GatesÉifgfresj$nt and Chairmanof the Board,and Allen as ExecutiveVice PreKft#*ÉtT l6-bit IBM personal The computerwas launched,usinggw advancedand evolving versionsof the 16-bit "Microsofts Disk OpeT&ting System"("MS-DOS"). Windows, which enabled a graphical and allowed a user to vrew unrelated ms simultaneously, while also ferred from one applicationprogram a iating System, enablethe transferof UNIXs to ities to personalcomputers. The Mffiosoft Mouse, which was a hand-heldpointing device thatcoulübeusedwith anv MS-DOS-based the forerunnerin developingsoftwarefor the Apple icrosoft shipped the first retail version of the Windows graphical Microsoft and IBM si Works was launched,integrating in one program the word ing, spreadsheet,database, communications, and drawing ions. Microsoft had a public issue at US$21 per share, raising I million. By the end of the first trading day, the price had goneup Microsoft and IBM further strengthened their developmentagreement by agreeingto jointly developa full rangeof systems softwareofferingsfor the next decade, which would include enhancements MS-DOS,to Microsoft OS/2, and Microsoft LAN (local area network) products, working with the Intel 386 and 486 microprocessors. Microsoft Office was released. both standard on disks and CD-ROM. Microsoft Windows 3.0 was launchedto resoundingsuccess, changing the way of graphical computing for the future. Microsoft becamethe first PC softwarefirm to exceedan annualturnoverof US$l billion. Microsoft launched Microsoft Windows NT, which was a powerful to Windows,providing a rangeof usersolutions. lt announcedthe launch of Windows 95. a fullv inteerated 32-bit 12 This document authorized use onlyby is for ; . Copying posting an infringement or is of Permissions@hbsp.harvard.edu7.783.7860. copyright. or 61
    • 11t484C SparkBurning Microsoft: the Creative ls Out? q& E operating system, and Microsoft Network ("MSN"), a collection intemetservices. iñ Rl" Microsoft and NBC enteredinto an equalpartnership creatctwo-.ffi to businesses: 24-hournews and informationchanneland an interáCtTüe. a on-linenewsservicedistributedon MSN: The Microsoft Network. ,..,.# r997 MicrosoftOffice 97 was released. 4. MicrosoftsIntemet".Exptorer was launched andbecame huse success. a In an importantunderstanding, Jobsand Gates some broad terms for product and technology development Apple and Microsoft. This includedthe productionof funue verslffifuof Microsoft Office, Internet Explorer, and other Microsoff¡tools for tffe Macintosh; the bundlingof Internet Explorerwith the ffi OS; a broadpatent cross- licensing agreement leading-edge for Mac,-tffiglogies; and a US$150 million investment Appleby Microsgffi. in ry$ The Justice Department allegedthat iolated a 1994 consent decreeconcerninglicensingthe.WindodK46ffiatingsystemto computer manufacturers. 1998.two an&ust cases In were filed againstMicrosoft. 1998 Windows 98 was launchedglobáfo. The companyalso launchedOffice 98 for the Macintosh,whi%ffitlac usersall the features Offrce of 97. ffi 2000 Office2000ffifuas Microsoft offiéiallvl#&nched. 200r internationally.Microsoft released Microsoft Windows)ffigyas rgféased theXbox. ,#")*üq-reM 2002 Microsoft and [$partñ1h laffied the TabletPC. 2003 Microsoft*aurnó$nced "ff9indows Mobile", a new global brand for the softffimoufiM.r suchas Pocketics and smartphones. 2006 Mi$psoft anno$ced a new US$20 billion tenderoffer, and authorized an sffie-repurchaseprogram of up to $20 billion over five *litional vearsM* Ái; 2007 MicrosoftWhed globally: % F o WindowsVista ry].. MicrosoftOffice System tftffi*Zutte, 2007 a digital andmusicentertainment device , ,@ @ . MicrosoftWindowsMobile 6 %%*^2009%u- s ,S . Microsoft Silverlight, which enabledthe creationof interactive mediaexperiences applications the Web. Microsoft launched and Windows 7. for (17 March 2010)"Microsofts Timeline From 1975to 2005", net/companies/microsoft/microsoft-company.htm(accessed May 2010); Microsoft 23 13 This document authorized useonlybv is for )opyingor posting an infringement is of or 617.783.7860. Permissions@hbsp.harvard.edu copyright.
    • 111484C Microsoft: the Creative ls SparkBurning Out? REVENUE EXHIBIT MICROSOFT 2: AND INCOMEEARNINGS ..1;^s" {s( IY.l (rN 199r-2ooe us$MrLLtoNs) wi! l rtR" 70000 r------- I I 60000- ¡ 50000 40000 ñ Revenue 30000 -Operating income *Net Income 20000 10000 0 r¡ (Yr st rrt (o l ooOrOdc.¿ óst (D¡.0oO) or or o) o) or or ol o r o t o o o oo oooo r l!uul!LL LLLÉg rr ILLqSource: Microsoft (2010) "Microsofthttp://www.microsoft Ilistory/default.aspx(accessed22May 2010), 14 Thisdocument authorized useonlyby, is for iopying or posting an infringement is of Permissions@hbsp.harvard.edu7.783.7860. copyright. or 61
    • Microsoft: the Creative ls SparkBurninq Out? (fu.-.,"( EXHIBIT MICROSOFTS 3: INCOME STATEMENT 2008-2010 ffi,." ;. ;.: L@# Year ended Year ended Year endd 30 June2010 30 June2009 30June 2dfu (in US$ (in US$ iJr" millions) millions) Revenue 62.484 58,437, #e .%tu ao.420 Costof GoodsSold 12.395 12,151 ";; "@ffi98 GrossProfit 50.089 46,9*2" ,ít 48.822 Selling,General 17,277 r6,90s 18,166 &AdministrationExpense w;, _ ,_ Depreciation Amortization & ¿,otJ .&562 2.056 Operatins Income 24.098 #$0.363 22.492 Non-operating Income ¿¿J " (IT[48) 434 Non-operating Expenses 692 ;#IEsMffi lncomeBeforeTaxes 25,013 ñs I 92r 23.8r4 lncome Taxes 6,2s3 %* Ái2sz **I4.569 6"r33 Net IncomeAfter Taxes 18.760 t7.68rSource:Hoovers(2010)"Microsoft Corporation"¡4* _ "¡.http://www.hoovers.com/company/Microsoft_Cgryróiái¡odrpt¡f-t-tnjeaS.html (accessed 30August 2010). , ",, ffi 15 Thisdocument authorized useonlyby is for Copying posting an infringement or is of copyright. Permissions@hbsp.harvard.edu7.783.7860. or 61
    • 11t484C SparkBurning Microsoft: the Creative ls Out? PRODUCT EXHIBIT MICROSOFT 4: REVENUE INCOME AND OPERATING BY SEGMENTOverall Company (in 2009Revenue US$million) I Client I Server andTools WOnlineServices ness Busi Business I Microsoft Division * Entertainment Devices and DivisionAs seenfrom Microsoft BusinessDivision (largely madeup of the MicrosoftOffice up almostone-thirdof the overall revenue.This was followed by thecli ) segment, the Serverand Tools segment, and both contributingabout s overall revenue. The Entertainment Devicessegment and anda Onliné iies Businesstogether made up abott 19Yoof the total revenue of the Percentage Percentage change change 2009- 2008 2008- 2007 14,712 t4,9rl (13%) 16 Thisdocument authorized useonlyby is for Copying posting an infringement or is of Permissions@hbsp.harvaro.eou7.783.7860. copyright. or 61
    • 11t484C Microsoft: the Creatlve ls SparkBurnino Out?2. Server and Tools 2009 2008 2007 Percentage Percentagg change change ffi - 2009- 2008 2008 2I)07" Revenue(US$ million) 14,126 13,102 I I,104 8% "fltst"* Wñry Operating income ?)1 4,539 3,57 |(US$million)3. Online Services Business 2009 2008 2007 ffiq¡@t Percentage chffie change J009 tr008 2008 -2007 Revenue 3,088 3,214 * (o)* 32%(US$million) q*!,434 Operating income(US$million) (2,253) (1,222) J**% (84)% (r02)%4. Microsoft Business Division *q ,ttff F% 2007 Percentage Percentage change change .%, 2009- 2008 2008- 2007 RevenueIUS$ million) 1&## *$t,ezs 16,476 I5% Operating income 12,369 10,838 (2)% t4%IUS$ million) ffitot Percentage Percentage change change 2009- 2008 2008 - 2007Source:Microsoft (2009)"Annual Report". 17 Thisdocument authorized useonlyby I is for _ _r. Copying posting an infringement or is of copyright. Permissions@hbsp.harvard.edu7.783.7860. or 61
    • 11t484C Microsoft: the Creative ls SoarkBurninq Out? EXHIBIT APPLESINCOME 5: STATEMENT !t/.R . ".ruN 2007-2009 ¡iu@ Year ended Year ended Year ended 30 September 30 September 30 September ¡* 2009 2008 ?Afi? (in US$ (in US$ 1$uss millions) millions) {ffimrKHons) Revenue 42.90s 32.47ñ 24,006 Costof GoodsSold 25.683 2l,s$*. .! r 15 , 8 5 2 GrossProfit r7.222 l r .14s --%_ 8 , 1 5 4 " Selling,General 4,149 3,76r 2,e63 &Administration Expense Depreciation Amortization & 734 effi. 473 3t7 Operating Income rt.740 ru,?5 4.409 Non-operating lncome 326 dr%ffim (48) Non-operatingExDenses IncomeBeforeTaxes 12.066 R-*uw*2.061 ffie5 5.008 IncomeTaxes 3.83 t 1.5t2 Net IncomeAfter Taxes 8.235 4.834 3.496Source: (2010) Hoovers "AppleInc.",http://wyffiooWffipr/company/Apple_Incirtjcci-l- (accessedlnjeas.htmt 3l August 2010). #*% & i: 4w INCOMESTATEMENT Year ended Year ended 3l December 31 December 2008 2007 (in US$ (in US$ iation & Amortization Net Income After Taxes 10.418Source:Hoovers(2010)tInternational Business MachinesCorporation",http://www.hoovers.com/company/International_Business_Machines_Corporation/rlksji-1-lnjea5.html (accessed August 2010). 11 18 This document authorized useonlyby is for 3opy¡ng post¡ng an infringement or is of Permissions@hbsp.harvard.edu7.783.7860. copyright. or 61
    • 11t484C Microsoft: the Creative ls SparkBurning Out? EXHIBIT GOOGLES 7: INCOME STATEMENT &mra-ffi1i 2007-2009 %. +s i Year ended Year ended Yearendgt 31 December2009 31 December 2008 3l DecemberEfl$T "*61 (in US$ millions) (in US$ millions) (in US$ffi¡s).& Revenue 23.6s0 21.795 16ffi94 Costof GoodsSold 8,844 8.621 J: qfu," 6.s49 GrossProfit 14.806 13.t74, .ei*i$ry.944 4 Selling,General 3,651 3.148i 2,740 &Administration Exnense Depreciation& r,524 lrl,99 967 Amortization Operatine Income 8.312 6.632 5.084 Non-operatingIncome ll60) ff(I.167 il¡¡ 31Non-operating Expenses 229 Income Before Taxes 8,381 %* 5-Bs3 5.674 IncomeTaxes 1,860 *I,626 1.470Net IncomeAfter Taxes 6,s20 &. 4.226 4.203Source:Hoovers(2010)"GoogleInc.tt, Inc/hsrfri-1-lnjeaS.html (accessed August 2010). 31 r-ry q.W &s", i INCOMESTATEMENT 2007-2009 Year ended Year ended 31 December2008 31 December2007 US$ millions me BeforeTaxes lncome Taxes IncomeAfter TaxesSource: Hoovers (2010) "Yahoo! Inc.", http://www.hoovers.com/company/Yahoo!Inc/cxfcyi-l-lnjea5.html (accessed August 2010). 15 lo This documentis authorized use only by I for Copying posting an infringement or is of copyr¡ght. Permissions@hbsp.harvard.edu or 617.783.7860.
    • 11t484C Microsoft: the Creative ls Out? SparkBurning EXHIBIT SIGNIFIGANT 9: ACQUISITIONS MICROSOFT 2000-2009Acquisitionsmade in 2000 GreatPlainsSoffware lier of mid-market business a Providerof WebAppoint,which al for suchitemsas car repairor dentist Inc. PacificMicrosonics of HDCD dieital audio A leading innovator in digital music in A leading developer of scori enhancements retail andW for A leading independent deve Driveoff.Com A privately owned services nroviderNavidecI services disital TV for enhanced forAcquisitionsmade in 2001 Compass Resolution, a Web content enabledcost-effectivedeploymentof rsonalized Web sites e-businessAcquisitions in2002 A leadineoroviderof location-based technologv solutions One of the worlds leadinevideo Manufacturer of software for securely viewing information storedon comoratenetworks Providerof a wide rangeof business applicationsdesignedto help small and midmarketbusinesses becomemore connected with customers, employees, partnersand suppli ider of Web conferencinsservices Provider of virtualization software for Windows and com Macintosh-based itions in 2004 Companv BusinessGIANT CompanySoftware A provider of anti-spyware Internetsecurityproducts. and ActiveViews The provider of an ad hoc reporting systemthat would allow usersto easilvunlock andexploredatastoredin systems Thisdocument authorized use onlyby is for Copying posting an infringement or is of Permissions@hbsp.harvaro.euu7.783.7860. copyr¡ght. or 61
    • 11t484C Microsoft: the Creative ls SparkBurning Out? :lAcquisitionsin 2005 Companv Business AlacrisInc. A global provider of certificate managemenrand idfiits assurance softwareproducts ffi FolderShare A provider in file synchronization remoteaccess and t€shglogyi# & media-streams.comAG A software company that developed conl iunicffins applicationsbased voice over InternetDrolsH*d uroloerm on tet TeleoInc. A providerof voiceoverIntemetprotocolffiwffiñükffiesFrontBridge Technologies A leadingproviderof managed services.Siá;t adfupised corporate e-maiI security,compIi anceand availabiliffisfftrfrements GrooveNetworksInc. A leading provider of collaborationsofrwaffir the "virhral office" .dr "W SybariSoftwareInc, A leadingproviderof securifyprodud$Acquisitionsin 2006 A provider of conversational on This was health intelli software designedby doctors for tools. It brought togetherall instantlvavailable. data protectionsolutionsfor ication virtualization and dvnamic -leadine networkfor video of tfu:Wffildss leading and most innovative video game nd creators "Fable." the hit Xbox franchise. of company that developed advanced analysis and An ffiication companywhich providedproductsthat transferred customers applications to new Internetresearch information and teadingprovider of searchtechnologydesignedspecificallyfor mobile operators the mobile Internet and One of the leadins online ma services the world in A firm that developed entemrise-classhealth information The maker of MindAlign, a leading application for enterprise An advertising exchange platform The parent company of one of the industrys most successful familiesof digital marketingserviceandtechnolo ider ofvoice servicesfor evervdav life A developerof intelligent Web searchtechnologyspecifically for healthinformation 21 Thisdocument authorized useonlyby is for Copying posting an ¡nfringement or is of copyright.PermissionslgnDslJ. vard.eduor 617.783.7860. I rd¡
    • Microsoft: the Creative ls SparkBurning Out?Acquisitions 2008 in Company Business *{wGreenfieldOnline Inc A Eurooean Dricecomparison. revieuffSited shoppingand consumer DATAlleero Inc. A orovider ofbreakthroueh data warehouse appliances W Zoomix A orovider of data-qualitvtechnolosy ,.,+$#$se. ## *? Powerset Providerof a semantic search engine # MobiComp A companythat enabledthe backupand restoratio4fubile {qta andmobile postins of socialcontentto Web sifessuffi a$fuffiok Navic Networks A leadineproviderof television advertisinssolution$F Farecast A travelsearch site .;q Komoku A orovider ofadvancedrootkit securitydetection bt*ulions Raptlnc. A leading provider of advertisingyield**fianagemeüffitolutions for disital mediaoublishers ^Rl Kidaro A orovider of desktoovirtualizationsolffions for enterprises Credentica The U-Prove technology bogft@m lrCredentica was a privacy/securitvprotectionmectff{rism q&, YaData A provider of advanced tools fofu disffiery of unique customer sesments @6d DangerInc. A key provider of softffire and services that powered many popularconsumer handsets%, Calisari Comoration A pioneerof 3-D motld&ing*Ihdering andanimationsoftware CalistaTechnologies A leadingprovi{gffiffiráffifutechnologies for next-generation desktop presffh and tatio?i&irtuali#tion tions soluFastSearch Transfer A leadinsprovitl&oofen#prise Search & solutionsAcquisitionsin 2009 lis Software automation software ializins in sofhuare the healthcare for i ise-related assets of SourceGear LLC enabled to build applications with Microsoft Visual Studio A process manufacturing solutionacquiredfrom FullscopeInc. servicesolution acquiredfrom ComputerGenerated lutions Inc., which would deliver a single system to manage projectsand resources, executefinancial transactions customer and billing, and matchresources with client assignments Retail solutions from LS Retail EHF and To-IncreaseDenmark A./S,a wholly owned subsidiaryof ColumbusIT PartnerA/S, that would enable Microsoft to provide an end-to-endretail solution including storemanagement with point-of-sale,merchandising and InteractiveSuper A company that specialisedin bringing the power of parallel computing to the desktop, and making high performance ins more accessible endusers toSource: Adapted from Microsoft (20f 0) "Microsoft Investor Relations- Acquisitions"http://www.microsoft.com/msfflacquisitions/history.mspx(accessed June 2010). I This documentis authorized use only by I for Copying posting an infringement or is of Permissions@hbsp.harvard.edu7.783.7860. copyright. or 6 1