Microsoft CorporationEssay Preview: Microsoft CorporationReport this essayMicrosoft Corporation: Microsoft is the one of the biggest companies in the world. US$62.48 billion was the amount of the revenue that Microsoft generated last year (2010). They spend almost US$10 billion on research and development alone per year. However, Microsoft has lost half of its value since 2000. In 2010, Goldman Sachs downgraded the company stocks. This incident was mainly caused by slow innovation. The two main points, size does matter and get use to with the merger & acquisition, will be discussed in this paper.
Size does matter: As is the nature of a big company, most firms practice a high level of hierarchy. Every decision has to pass through those hierarchy. This often causes the company to make slow decisions. In the market of innovation, its about the timing. The company has to be one step ahead of the competitor, so the company has to be able to move fast and make a quick decision. However, the necessary criteria is not about to be applied at Microsoft. Microsoft is both centralized and has high structure. Bottle neck in terms of decision making has occurred all around the company. Furthermore, the engagement in charity activity of the Bill & Melinda Gates Foundation of Bill Gate, founder of Microsoft, has been too busy with his duties as chairman of Microsoft. He has to devote sufficient attention to being Chief Software Architect, which is his full-time job. Gates could not be involved in the day-to-day decisions on what went into the product for a period of time. Had he been more involved, Windows Vistas release might not have been delayed and ineffective. On the contrary, Apple, one of the biggest competitors of Microsoft in the market, also has a very large organization but separates their organization into many small teams. We can obviously see that the product that apple brings to the market is very innovative. Moreover, the team that takes care of each product is never repeated. In most of the apple products grand openings, Apple comes out with a new team that has never see them before. Apple distributes their project to each team and gives them the appropriate decision power to make sure the project runs smoothly.
Get use to with the merger & acquisition process: Merger & Acquisition is much like a shortcut to the company in order to acquire all of the successfulness, branding and technology from other companies by using money. Microsoft had more than 60 major merger & acquisition deals during 2000-2009. This digit is showing the way that Microsoft take. What is the point of making the big innovative product in the company if my company will take the alternative to buy another companys technology? This kind of question will come up in the mind of the innovators or the employees who get involved in the R&D department. Because the company always takes the easy way to approach the market by M&A, it creates an unexpected norm to the company.
[quote=Gavin]Gavin, I have tried to think of your solution of merger && acquisition to help. The current situation is one of great difficulty. For example I have a client to manage for a large firm for which we have a few directors over which we need the team from which to grow and the fact that we have a company with over 60 new employees makes sense: they need the new staff in order to grow and get the best performance out of the acquisition process. What is it you want it to be like when we need your new clients. There are companies with a high level of management (both senior and lower level) and then there are people with very low level management in lower levels who are the best at the acquisition. If you don’t want to go the high way then I suggest you to change the name, get out of business and go to hell. This doesn’t have a good market because for your clients there is only so much you can do once you are out of your position but for your clients the fact of the matter is that you do have so much and you need them to have something good to offer. I was hoping for a better name, but I don’t understand this because I am an investor.
[quote=FritzM_]Fritz, you have to think this through… A, that will lead to a world where you start to see the company as an individual product rather than a company corporation. Then a new person starts to want to be associated with that product. A, that will lead to more of a partnership and more of a team-based approach to the company.
[quote=FritzM_]Fritz, you are still trying to come up with a better choice for the company, but I don’t think that there are many solutions for you to deal with when you need to grow your company. I have a colleague who was the CEO of a consulting company that sold a lot to get an additional layer of brand recognition, one I am particularly excited about right now (which is probably very exciting given that she joined the company in mid-2004). The second part of his career was a time at IBM – at the company it’s clear that he can be very creative, he is able to create ideas. You need to think about that as opposed to as if you can just work for 50 years. He was very much a pioneer on how to have a more collaborative culture. A group of people could be much more influential than just one person.
Powell, in particular, is being very critical to Microsoft. In the following excerpt, Powell notes two things that may be interesting:
1) When will other companies really come to Microsoft to sell you? Yes, Microsoft has a really interesting opportunity to build an e-commerce empire that’s already been very successful. I think one of the things that you have to watch out for is that Microsoft looks at what other companies are doing and goes, ‘Oh, I need that.’ When a competitor wants to sell to you, you’re looking and trying to figure out how to beat that competitor in terms of the things that you do. When something like that happens, it looks like Microsoft is going to try to buy it – but what you are actually getting, really, is a massive, massive deal.
2) The issue with the idea of being a leader in eCommerce is that you cannot just look at an e-commerce page and say, ‘Wow! That’s got all the things here,’
Powell notes “we’re trying to get a lot of these things for every single customer (as well as everything else) through Microsoft on our own, to create an e-commerce business or an e-commerce product or a product on our competitors’, which is completely contrary to what I believe. If [this technology] really made it into an e-commerce, it would make the e-commerce business grow a lot – that’s what I believe Microsoft’s not doing.
I’d really like to see Microsoft focus on building in-app products for all the customers, and making it happen with our e-commerce business. We know those have been extremely successful for us, and we need to do more work on it, but at the same time there’s an enormous opportunity in our e-commerce business to build the infrastructure that people already know we can build, which is really what we’ve done to be a great consumer technology company. And we need them to take advantage of that, so that we create an experience that is unique to them while also making sure that our customers have access to things like [these].”
Powell also addresses some of the other issues with Microsoft’s e-commerce strategies. He says “As a CEO, that’s a job you have to do.” He notes “in many ways the product that you run depends on the customer you’re talking to. What we do is we build a system by building our own, that is designed through the process and not over time, by the customer.” You also have to look at how that customer feels about certain other business processes, such as pricing.
Powell continues:
If you listen to my answer I think it’s extremely important that Microsoft is very committed not to any one aspect of being a competitor in eCommerce as they have their own very different product offerings. I think that by focusing on this unique product as opposed to selling to another company, which I think has not been all that successful, and by building a brand value proposition that could generate some big and positive returns over
[quote=Frank>I’m not saying I disagree with you but I thought you should make it clear that Microsoft has to make money in some way – and you already have a number of those. The biggest problem with the restructuring that you mentioned would be in the last part. And here is the major change that seems to be causing the
[quote=Gavin]Gavin, I have tried to think of your solution of merger && acquisition to help. The current situation is one of great difficulty. For example I have a client to manage for a large firm for which we have a few directors over which we need the team from which to grow and the fact that we have a company with over 60 new employees makes sense: they need the new staff in order to grow and get the best performance out of the acquisition process. What is it you want it to be like when we need your new clients. There are companies with a high level of management (both senior and lower level) and then there are people with very low level management in lower levels who are the best at the acquisition. If you don’t want to go the high way then I suggest you to change the name, get out of business and go to hell. This doesn’t have a good market because for your clients there is only so much you can do once you are out of your position but for your clients the fact of the matter is that you do have so much and you need them to have something good to offer. I was hoping for a better name, but I don’t understand this because I am an investor.
[quote=FritzM_]Fritz, you have to think this through… A, that will lead to a world where you start to see the company as an individual product rather than a company corporation. Then a new person starts to want to be associated with that product. A, that will lead to more of a partnership and more of a team-based approach to the company.
[quote=FritzM_]Fritz, you are still trying to come up with a better choice for the company, but I don’t think that there are many solutions for you to deal with when you need to grow your company. I have a colleague who was the CEO of a consulting company that sold a lot to get an additional layer of brand recognition, one I am particularly excited about right now (which is probably very exciting given that she joined the company in mid-2004). The second part of his career was a time at IBM – at the company it’s clear that he can be very creative, he is able to create ideas. You need to think about that as opposed to as if you can just work for 50 years. He was very much a pioneer on how to have a more collaborative culture. A group of people could be much more influential than just one person.
Powell, in particular, is being very critical to Microsoft. In the following excerpt, Powell notes two things that may be interesting:
1) When will other companies really come to Microsoft to sell you? Yes, Microsoft has a really interesting opportunity to build an e-commerce empire that’s already been very successful. I think one of the things that you have to watch out for is that Microsoft looks at what other companies are doing and goes, ‘Oh, I need that.’ When a competitor wants to sell to you, you’re looking and trying to figure out how to beat that competitor in terms of the things that you do. When something like that happens, it looks like Microsoft is going to try to buy it – but what you are actually getting, really, is a massive, massive deal.
2) The issue with the idea of being a leader in eCommerce is that you cannot just look at an e-commerce page and say, ‘Wow! That’s got all the things here,’
Powell notes “we’re trying to get a lot of these things for every single customer (as well as everything else) through Microsoft on our own, to create an e-commerce business or an e-commerce product or a product on our competitors’, which is completely contrary to what I believe. If [this technology] really made it into an e-commerce, it would make the e-commerce business grow a lot – that’s what I believe Microsoft’s not doing.
I’d really like to see Microsoft focus on building in-app products for all the customers, and making it happen with our e-commerce business. We know those have been extremely successful for us, and we need to do more work on it, but at the same time there’s an enormous opportunity in our e-commerce business to build the infrastructure that people already know we can build, which is really what we’ve done to be a great consumer technology company. And we need them to take advantage of that, so that we create an experience that is unique to them while also making sure that our customers have access to things like [these].”
Powell also addresses some of the other issues with Microsoft’s e-commerce strategies. He says “As a CEO, that’s a job you have to do.” He notes “in many ways the product that you run depends on the customer you’re talking to. What we do is we build a system by building our own, that is designed through the process and not over time, by the customer.” You also have to look at how that customer feels about certain other business processes, such as pricing.
Powell continues:
If you listen to my answer I think it’s extremely important that Microsoft is very committed not to any one aspect of being a competitor in eCommerce as they have their own very different product offerings. I think that by focusing on this unique product as opposed to selling to another company, which I think has not been all that successful, and by building a brand value proposition that could generate some big and positive returns over
[quote=Frank>I’m not saying I disagree with you but I thought you should make it clear that Microsoft has to make money in some way – and you already have a number of those. The biggest problem with the restructuring that you mentioned would be in the last part. And here is the major change that seems to be causing the