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- 1. Project on Microsoft MadeBy: Dhruv Modi Higher Diploma in International Management Student ID: 35954
- 2. Abstract: Microsoft’s mission isto 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 Corporationis 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 BusinessStructure 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 ofMicrosoft 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 (From2012) 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 PressRelease 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 andinvestments 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 interventionin 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 aminimum, 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 SteveBallmer 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 hasalways 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 Agrawal, R., 2012.Graphic Designer. [Art] (rohitcgartist blogspot). Anon., 2013. NASDAQ. [Online] Available at: http://www.nasdaq.com/symbol/msft [Accessed 21 July 2013]. Danansooriya, C., 2012. Microsoft Business Strategy Analysis. [Online] Available at: http://chakidan.blogspot.sg/2011/04/strategy-analysis-for-microsoft.html [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. Microsoft Corporation, 2013. Investor Relation: Acquisition History. [Online] Available at: http://www.microsoft.com/investor/Stock/AcquisitonHistory/All/default.aspx [Accessed 21 July 2013]. Microsoft Corporation, 2013. Investor Relation: Investment History. [Online] 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].