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Let The Battle Commence * * Feb 14th 2002 | SAN FRANCISCO From The Economist print edition David Kleinman, Ken Song, Dallas Thornton, Marck Vaisman, Ashish.

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Presentation on theme: "Let The Battle Commence * * Feb 14th 2002 | SAN FRANCISCO From The Economist print edition David Kleinman, Ken Song, Dallas Thornton, Marck Vaisman, Ashish."— Presentation transcript:

1 Let The Battle Commence * * Feb 14th 2002 | SAN FRANCISCO From The Economist print edition David Kleinman, Ken Song, Dallas Thornton, Marck Vaisman, Ashish Khamar

2 Microsoft, A brief history In 1995 Microsoft began its quest for market dominance with a product code-named Chicago. Better known as Windows 95 Soon after the O ’ Hare project was launched I.e. Windows Plus As we know, Office 2000 was later released as an integrated, fully- functional personal productivity suite, designed with a common code base and featuring interoperable components easily built by developers and used by consumers On the development side, MS has invested heavily in “ developer relations, ” spending millions on special events, gifts for developers, training and certification programs, and technical support

3 The benefits to Microsoft A unified code base for all its programs, allowing developers to easily build upon existing code without “ re- inventing the wheel. ” This unification allowed MS to basically define the standards by which its products will operate, independent of the rest of the software industry. The investment on developers has allowed MS to control developers and mold them into MS-loving, MS-standards- adopting people.

4 Thought MS ’ s integration strategy has obviously paid great dividends. (Apart from anti-trust concerns). While standards proponents will gripe about Microsoft not conforming to standards set by “ the industry ” (a.k.a. MS ’ s competitors), it can do this — it is not against the law. In fact, because it does not always conform to standards, it is able to bring new technologies to market more quickly. Also, as the circle continues, developers embrace the new Microsoft technology, develop for MS products, and grow MS market share.

5 Limitations Most importantly, Microsoft must be wary of consumer confidence. This “ integration strategy ” is like putting all your eggs in one basket. If one of the underlying components is flawed or has a security hole, any product that uses it is vulnerable. MS must put stability and security first and foremost on its priority list

6 A possible solution Introduce a new quality control and auditing division that reports directly to the top of the organization. The division would have at least one FTE developer assigned to each project. The main goal of this employee would be to ensure code stability and test applications during their development. Assuming annual costs of $250K/field employee x 100 employees, MS would incur costs of at least $25M. This really is a small price to pay.

7 The Future MS has seen its growth stall as its initial core markets become saturated. To continue to grow, it must latch on to and develop emerging technologies, overtake competitors ’ markets, or create new markets. Enter the.Net initiative. MS plans to offer centralized authentication, secure services, easy application development, and multi-platform support.

8 .Net The web-services concept allows companies to easily develop applications that communicate with each other over the Internet (and are dependent on Microsoft- controlled technologies)..Net provides rich new features that link in to other MS client applications such as Office and Windows and server applications such as Exchange and SQL Server. In short,.NET is MS ’ s attempt to link all its products into a central platform, from which developers can program, companies can leverage the technologies, and MS can make money.

9 DOJ concerns Through this approach, MS has to worry little about conforming to standards and, rather, create standards for the rest of the industry to write to and develop on top of. Dominance over the market will lead to further scrutiny from the DOJ. One possibility is spinning off complementary business units — support services, consulting services, and hardware development would be atop the list. Long-term contracts with these spin-offs should be worked out to ensure the stability of the enterprise. Downsizing will not reduce MS ’ s dominance but will ease tensions with the DOJ


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