Success of Microsoft - Term Paper Example

Success of Microsoft Success of Microsoft Introduction Microsoft is mainly a software organization making its money through the sales of the software they develop (Wallace & Erickson, 2010). This is a short summary of what the company does, but it does not tell anywhere close to the complete story. It does not tell you that the company is a business empire that has no equal; that their products are utilized in almost every computer on earth or that is has still not arrived at the height of its power, as well as influence, making them seem like a monopoly in this business (Christensen & Raynor, 2013). Even though, people might find themselves cursing the “evil empire” when they use a lot of cash on another upgrade or when their system crashes, the company is unrivaled or unmatched when it comes to powering information technology. Whether through innovation, cunning or a blend of these and other considerable qualities, the company and its owner have defined how the world uses computers ever since PCs, IBMs in particular, started being rolled out, in 1981, with their Microsoft Disc Operating System (MS-DOS), in its bowels (Wallace & Erickson, 2010). Therefore, the company rules the globe, but just what makes it reach that level? This article will discuss, from an economic perspective, why Microsoft is so successful. In order to achieve this, it is significant to look into their history and discover how they compete in the marketplace. It is also important to look at how the company’s corporate culture influences its success and finally look at some of their world famous products to discover how they rip from these core advantages. Microsoft and its Rise Microsoft was founded on 1975 by Bill Gates and his colleague, Paul Allen, as a simple “garage start-up” (Inamizu, 2014). The two were basically part of an initial leap towards personal computing with a major different. Whereas competitors such as Apple, inc. began straight away developing both machines and software, Microsoft only dealt with software. The key difference among these two, economists argue is that Steve Jobs and his acquaintance, Steve Wozniak, were running a hobby endeavor, unlike Gates and Allen who were running a business world. IBM was developing their initial PC and wanted an OS to run it. They approached Gates and Allen thinking that they had one available, but at that time, they were only writers of computer language not developers of OS. Microsoft decided to buy a $50,000 OS that they leased to IBM for $80,000, but still, during this era, $80,000 was not that much of a fortune (Inamizu, 2014). Gates discerned that IBM was on the verge of developing a mass market for PC and speculated that the cycle would track the mainframe model and generate clones. Eventually, the law would require these clones to pay Microsoft any fee to utilize DOS, which implied that Microsoft was the caretaker that PC developers had to reimburse in order to venture in the PC business (Williams, 2014). This put Microsoft in a position of out-foxing, bullying and co-opting all newcomers. It was only a matter of discovering fresh methods of reproducing the business model, as well as the income it earned. The company’s change to the GUI-based Windows OS from DOS finalized the cycle (Williams, 2014). A Graphic User Interface Opportunity Apples Macintosh was first put on the marketplace in 1984. It is regarded as the world’s first commercially successful personal computer to utilize a GUI. Microsoft instantly saw this as both an opportunity and a threat (Inamizu, 2014). This technology has the ability to popularize computing beyond the point of the mass market developed by IBM together with its clones, making it a danger to Gate’s monopoly. It also opened a chance to aid Microsoft in finishing off IBM, their current opponent, and guarantee their supremacy for decades to come. Microsoft and IBM had been entangled in a fight over the PCs next OS. IBM was working with Gates and his team on O/S2, the DOS successor (Zimmerman, Zimmerman & Pinard, 2013). IBM wanted something other hardware developers could not clone. Microsoft acted along till it became obvious that the organizations were at had different goals: Microsoft was exploiting IBMs position in the market and IBM’s aim was putting the DOS-spirit back in the bottle. This led to a break, and the two organizations were left to fend for themselves (Zimmerman et al., 2013). If the Gates could develop his own GUI, then his was using one stone to kill two birds with one operating system. From a business perception, the effect of Windows was as significant as the Macs effect from a users point of view. At once, a boring, outdated Windows PC could function like a Mac at a 10th of the price of purchasing a Mac. This meant that they were not yet left out in the profit margin (Zimmerman et al., 2013). Microsoft had again started to re-define the PC market, but just prior to the launching of the Windows 95, a firm called Netscape came up (Kazovic & Valencic, 2013). Microsoft also had to cope with another impending threat: the Internet. However, Bill Gates understanding the importance of change, decided to give that power away, but they also develop OS’s that support the advent of the network (Kazovic & Valencic, 2013). The browser fights lasted only a minute and were likewise one-sided, with Internet Explorer eventually succeeding over Netscape. The next section of that paper will now go deep into how this history, as well as their contemporary endeavors, has granted Microsoft the commercial success they are enjoying to date. Microsofts Keys to Success In their annual report (2005), the company listed its financial highlights. What stood out was the “2005 Cash and Short Term Investment” report. At that time, the firm had only $38 billion in their account, allowing them to be adaptable to whatever situation that they find themselves in (Lopatka & Page, 2009). While a majority of the dominating organization retrenched defensively so as to preserve the precious territory that they manage, Microsoft did the opposite (Zimmerman et al., 2013). The company can alter its focus in a split second and like some kind of mutant multinational organization, Microsoft can outsmart multinationals such as IBM and implement its infinite cash resources to overcome smaller competitors such as Netscape (Cusumano, 2010). This amazing ability is brought about their ease in producing their software; it does not need a similar logistical struggle of developing a skyscraper or an airplane, but only require to have good programming skills of writing a program (Szóstek, 2012). Anyone can produce software provided that he or she has the idea and the skills. Microsoft knew this before anyone else, that is why they developed their skills beforehand and led them to what they are today. They considered it significant to build themselves in the market and cash on the developers of PCs in order for people to build their trust in them before another competitor sets foot on the market (Cusumano, 2010). Organization is the most significant key to Microsofts achievement. Gates never, in really, consolidated the organization following its start-up stage. Rather, he decided to duplicate the most productive elements of Microsofts initial design team. Microsoft plans its workers to be overworked. Their project managers gauge the staff members required to do a specific task, and then lessen it (Shuen, 2008). This culminates in a work force that has to scramble straight away or be weighed down. The organization also takes their time to select the right kind of employees, who they dearly compensate. The company has very precise criteria their employees must accomplish, and they have created a ground-breaking method of appraising their candidates, which involves asking them riddles (Redmond, 2011). A firm built on dominating through creativeness and high-energy requires creative, as well as high-energy workers, who do not mind working 3 days straight. Even though, this kind of worker seems hard to find, one way or another Microsoft always finds them. From a business perspective (diminishing returns to scale), everything will fall one day eventually and organizations waste away like muscles when they become old (Jae-woong & Geun-woo, 2010). However, the charismatic CEO is not there to consider it since he probably would not let matter reach that point. Gates is not expected to buck that inclination so people can be sure of the company reign to extend many decades to come Jae-woong & Geun-woo, 2010). Product Segments of Microsoft In their yearly report, the company boils itself down into "Product Segments," or "Business Units," which embody its major product line: Microsoft Business Solutions, Client, Server and Tools, MSN, Information Worker, Mobile & Embedded Devices, as well as Home & Entertainment (Pendergast, Frayne & Kelley, 2009). Here is how the company depicts these units to its investors: Microsoft Business Solutions – this segment develops and markets offerings to manage customer relationship, financial as well as supply chain management functions for any kind of organization, as well as divisions of global enterprises (Pendergast et al., 2009). Client ­ the Windows OS integrates many applications, hardware and services in a known manner, allowing organizations and people to utilize technology with confidence and ease (Pendergast et al., 2009). Server and Tools – this segment develops and markets the organization’s Server System products, including their Server OS’s (Pendergast et al., 2009). MSN – this segment delivers online services, which seek to empower users through taking them much closer to information and people that matter most (Pendergast et al., 2009). Information Worker – this segment develops and delivers software solutions, which enable companies in order to meet vital goals through empowering their labor for so as to change information into something progressive (Pendergast et al., 2009). Mobile and Embedded Devices – this segment develops and markets of products, which widen the benefits of the Windows dais to many kinds of devices, comprising of their mobile devices, which incorporates personal information management, voice, as well as media capabilities, and a broad range of other devices planned to improve peoples individual and work lives (Pendergast et al., 2009). Home and Entertainment – this segment develops, produces and markets the Xbox console video game system, including its hardware, other third-party games, Xbox, as well as Xbox Live operations, games published under the MS label, research, marketing, plus sales and support (Pendergast et al., 2009). It also develops efforts of the HPD (Home Products Division) product lines. Additionally, it conducts all retail marketing and sales for Microsoft Office, the Windows OS, PC games, Xbox, in addition to HPD products. It is accountable, as well, for the sales, development, and application of Microsofts TV platform goods for the television industry (Pendergast et al., 2009). Conclusion Microsoft is far afield from their first DOS and today, Windows is still the world’s most used OS. In fact, this OS grants the company the edge in almost all of its segments, with one vital exemption, the Xbox. Since OS is on most PCs, Microsoft has an upper hand when it wants to advertise their new products. Whether it is promoted on the Internet Explorer homepage or part of an update, Microsofts product will perhaps find their way to the public before they hear about their competitors products. References Christensen, C., & Raynor, M. (2013). The innovators solution: Creating and sustaining successful growth. Boston, MA: Harvard Business Review Press. Cusumano, M. A. (2010). 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Journal of Teaching in International Business, 20(4), 330-350. Redmond, T. (2011). Microsoft Exchange Server 2007: Tony Redmonds guide to successful implementation: Tony Redmonds guide to successful implementation. New York: Digital Press. Shuen, A. (2008). Web 2.0: A strategy guide: Business thinking and strategies behind successful Web 2.0 implementations. New York: " OReilly Media, Inc.". Szóstek, A. A. (2012). A look into some practices behind Microsoft UX management. In CHI12 Extended Abstracts on Human Factors in Computing Systems (pp. 605-618). Wallace, J., & Erickson, J. (2010). Hard drive: Bill Gates and the making of the Microsoft empire. New York: Harper Business. Williams, J. (2014). Microsoft CIO talks innovation, career growth, and dogfooding. IT Professional, 5(4), 64-64. Zimmerman, S. S., Zimmerman, B., & Pinard, K. (2013). New perspectives on Microsoft PowerPoint 2013, comprehensive. New York: Cengage Learning. Read More