Did Microsoft ever come out with something that will make our computers moist and chewy like cakes where we could just eat them while we were working? So far, Microsoft hasn’t! However, competitors like Google and Apple have introduced innovative products.
“Microsoft was built on innovation, and our future depends on it” – Bill Gates 2009 – Dropped in sales First year ever May 26th, 2010 – Apple overtakes # 1 October 4th, 2010 – Stock Downgraded Microsoft has become known as “clumsy, uncompetitive innovator.”
The great tech war of 2012 Apple, Facebook, Google, Amazon Microsoft not included
Why was Microsoft no longer creating thebreakthrough innovative technologies it once used to pride itself on, and how could they regain their once dominated # 1 position in the industry?
1975: Microsoft is founded by Bill Gates and Paul Allen ▪ Sold computer language BASIC to MITS ▪ Micro-soft is an abbreviation of “microcomputer software”
1977: Bill Gates and Paul Allen move from being "partners" to Gates as President and Allen as V.P. 1978: First international sales office – Japan 1981: Microsoft goes private ▪ Bill Gates - President and Chairman ▪ PaullAllen - Executive Vice President 1981: The 16-bit IBM personal computer is launched ▪ Uses the 16-bit "Microsoft Disk Operating System" ("MS- DOS")
1983: Develops the Windows graphical operating system 1983: Develops Microsoft Mouse 1986: Microsoft Works Launched Integrates word processing, spreadsheet, database, communications, and drawing functions Public share increases by $61 million from $21 per share to $28 per share
1989: IBM and Microsoft make a decade long agreement to jointly develop a range of system software offerings ▪ Includes enhancements to MS-DOS, Microsoft OS/2, and Microsoft LAN that work with Intel processors ▪ Microsoft Office is released 1990: Microsoft Windows 3.0 is released 1995: Microsoft 95 is launched ▪ Coupled with the "Microsoft Network" ("MSN"), a collection of internet services ▪ Microsoft and NBC form partnership to create a 24-hours news source on MSN
1997: Microsoft Windows 97 along with Microsoft Internet Explorer 4.0 is launched 1998: U.S. Justice Department brings two antitrust cases on grounds that Microsofts Web browsers inclusion in Windows 95 forces the browser on PC makers and violates a prior pact with the Feds
2001: Windows XP is launched internationally 2001: Xbox gaming system is released 2002: Partner with Compaq, Acer, Fujitsu, Sony, and Toshiba to release the Tablet PC 2003: Announce "Windows Mobile" software for mobile devices 2004: Federal court approves the settlement between Microsoft and the Department of Justice
2007: Launch globally: ▪ Windows Vista ▪ Microsoft Office 2007 ▪ Zune, digital and music entertainment device ▪ Microsoft Windows Mobile 6 2008: Microsoft launches bid to acquire Yahoo! 2009: Windows 7 is launched 2009: Bing search engine is launched 2010: Microsoft Office 2010 is launched
Corporate Culture Manages to frustrate the efforts of best thinkers Large groups shut down smaller teams in current structure Near all executives in charge of music, e- books, phone, search, andtablet left in past decade. ▪ Interview from one of the departed execs states, “Too many semi-competent managers, too much in-house politics”
Research and Development Timing of product launch has been poor ▪ Web TV- Early ▪ Mobile, MP3 , Video Games – Late Spent 9.5 Billion in 2009
Innovation Focused on higher margin, lower risk products ▪ Made financial sense ▪ Fell behind in integration and innovation because of it Focused on large scale, rather than speed
Bill Gates wrote a class scheduling program for his school. He tweaked the program’s code so that he was placed in classes with mostly female students Microsoft employees are called “Softie” Average – 38-year old Male making $106k Huge art collection Over 5,000 contemporary pieces Microsoft campus is full of bunnies Had to catch and have them spayed and neutered
Widely recognized Large market share - Global Diversified - OS, Browsers, Search Engines, Media player, gaming, mobile Dominates PC World High margin products
Lagging in new creative and innovative products (Apple) New products are more imitations then new ideas Neglected to enter the video game industry until 2001 Poor timing to market Company culture that frustrates the efforts of visionary thinkers
Large R&D budget - $9.5B Multiple different technology segments to improve and grow in Improve in customer tastes rather then business needs Purchase up and coming companies with innovative ideas and employees Further develop and integrate social media platform within businesses Combine existing business products into a social media platform
Shift in the industry PCs to non-PCs Phones and appliances Cloud computing Offering services to customers Google Docs Competitors Apple, Google
Co-founded by Steve Jobs and Steve Wozniak Lagged behind Microsoft in the computing industry in the ’70’s and ‘80’s Jobs quite in 1985 due to loosing a boardroom battle for control of the company Apple started its turnaround in 1996 Jobs vision and $150M from Microsoft
Founded in 1998 by Sergey Brin and Larry Page Internet serach engine 97% of revenue in 2008 and 2009 was generate through search advertisement sales Expanded its products Books, Maps, Apps, News Purchases companies –YouTube and DoubleClick Mobile - Android
World’s largest provider of computer products and services IT infrastructure services Business processes services Business solutions requiring advanced computing power Has more patents than any other company in the world Created new innovative products that would generate revenue Innovation Jam in 2006 150,000 employees and stakeholders
Founded in 1994 by David Filo and Jerry Yang Leading online portal before google Revenue generated by providing marketing on most of its websites Published its website in 25 different languages Became bureaucratic and slow at innovating Brickhouse – 2006 ▪ Offsite incubator to create new innovations and ensure they reached the market as soon as possible
Continue to Invest in R&D Focus on Cloud-based technology Improve communication between R&D and marketing departments to better align launch timing and customer needs
Breed Innovation Take more risks to discover either flaws or new opportunities with ideas Maintain diverse social connections Create fellowships that promote and award innovation and new business Work with education institutions to launch entrepreneurial-centered courses and programs
Change work culture High monetary rewards for innovation A flatter organizational hierarchy that cultivates ideas and lends a stronger voice to the employees
Improve marketing strategy Shift from business focused to a consumer focused marketing strategy Increase marketing focus from product features to product “ease of use” Develop more customer retail locations ▪ Release innovative and risky product that will only be available in stores
Overview of recommendations Discussed ways that Microsoft can improve corporate culture, breed timely innovation, and improve their marketing strategy. What has happened since 2010? Increased profits ▪ 62 Billion (2010) – 69 Billion (2011) Skype Acquisition for 8.5 billion New marketing campaign emphasizing how products connect family Ranked #1 in social media saviness, ahead of all competitors ▪ This change may have some affect on their culture.
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