Microsoft powerpointjb

Microsoft: Is The Creative Spark Burning Out?

Patrick J. RiffelJacob BabcockZach Motsch

Introduction

Microsoft Commercial

Introduction

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.

Introduction

“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.”

Introduction

The great tech war of 2012 Apple, Facebook, Google, Amazon Microsoft not included

Problem

Why was Microsoft no longer creating the breakthrough innovative

technologies it once used to pride itself on, and how could they regain their once dominated # 1 position in

the industry?

Background

1975: Microsoft is founded by Bill Gates and Paul Allen▪ Sold computer language BASIC to MITS▪ Micro-soft is an abbreviation of

“microcomputer software”

Background

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 ▪ Paull Allen - Executive Vice President

1981: The 16-bit IBM personal computer is launched▪ Uses the 16-bit "Microsoft Disk Operating System"

("MS-DOS")

Background

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

Background

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

Background

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 Microsoft's Web browser's inclusion in Windows 95 forces the browser on PC makers and violates a prior pact with the Feds

Background

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

Background

Background

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, and tablet left in past decade.▪ Interview from one of the departed execs

states, “Too many semi-competent managers, too much in-house politics”

Background

Research and Development Timing of product launch has been poor▪ Web TV- Early▪ Mobile, MP3 , Video Games – Late

Spent 9.5 Billion in 2009

Background

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

Board of Directors

Microsoft Interesting Facts 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

Strengths

Widely recognized  Large market share - Global Diversified - OS, Browsers, Search

Engines, Media player, gaming, mobile

Dominates PC World High margin products

Weaknesses

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

Opportunities

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

Threats

Shift in the industry  PC's to non-PC's

Phones and appliances Cloud computing

Offering services to customers Google Docs Competitors

Apple, Google

Apple

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

Google

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

IBM

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

Yahoo!

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

Recommendations to Management

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

Recommendations to Management

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

Recommendations to Management

Change work culture High monetary rewards for innovation A flatter organizational hierarchy that

cultivates ideas and lends a stronger voice to the employees

Recommendations to Management

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

Concluding Remarks

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.

Concluding Remarks

What does the future hold?

Can they follow through?Future Productivity (October 25th, 2011)

References

Blum, J. An inside look at cloud-based microsoft office 365 http://www.entrepreneur.com/article/220246

Cohen, Amanda. "Surveying the Microsoft Antitrust Universe." Berkley Technology Law Journal 19.333 (2004): 333-64. EBSCO. Web. 5 Nov. 2011

Das, Anupreeta. Microsoft, Others Work on Yahoo Bid.http://www.online.wsj.com/article/SB10001424052970204618704576641350008919750.html#ixzz1bIo97NUX

Manjoo, F. (October 19th, 2011). The great tech war of 2012 http://www.fastcompany.com/magazine/160/tech-wars-2012-amazon-apple-google-facebook

Microsoft jerry seinfeld bill gates shoe circus commercial. http://www.youtube.com/watch?v=rIjNJZpRtj8

N.A. Apple reports 4th quarter results.http://www.apple.com/pr/library/2011/10/18Apple-Reports-Fourth-Quarter-Results.html

N.A. Microsoft annual report 2010.http://www.microsoft.com/investor/reports/ar10/index.html

References

N.A. Microsoft officially welcomes skype http://www.microsoft.com/presspass/press/2011/oct11/10-13SkypePR.mspx

Naraine, R. IT wrestles with microsoft monoculture myopia http://www.eweek.com/c/a/Windows/IT-Wrestles-with-Microsoft-Monoculture-Myopia/

O’brien, Kevin. Europe Drops Microsoft Antitrust Case. http://www.nytimes.com/2009/12/17/business/global/17msft.html?pagewanted=all

Productivity future vision (2011).http://www.youtube.com/user/officevideos#p/u/0/a6cNdhOKwi0

Rosoff, M. Microsoft's 15 biggest acquisitions (until today) http://www.businessinsider.com/microsofts-15-biggest-acquisitions-so-far-2011-5

Sandbert,, Jared. "Microsoft's Six Fatal Errors." Newsweek 135.25 (2000): 22-29.EBSCO. Web. 5 Nov. 2011.

Wilcox, J. Microsoft's clever 'family' marketing campaign is exceptional http://betanews.com/2011/11/03/microsofts-clever-family-marketing-campaign-is-exceptional/.