Tag: Microsoft

Whilst a new version of Windows may make the headlines, it’s not Windows that is the main source of profit for Microsoft: it’s Office, with it’s suite of appplications – Word for word processing, Excel for spreadsheets, PowerPoint for presentations, Access for databases, FrontPage for web pages and Outlook for e-mail. But Office is under threat from two sources.

First, despite that fact that Microsoft’s share of the office applications market has remained fairly constant at around 94%, it is facing increased competition from free alternatives, such as Google docs and Google Apps, and OpenOffice from Oracle (see also).

Second, the demands of users are changing. With the growing use of social networking and file sharing, and with a more mobile and dispersed workforce, Microsoft Office needs to adapt to this new environment.

With the launch of Office 2010, these issues are being addressed. The following articles examine what Microsoft has done and whether it is a good business model

Microsoft Office 2010 takes aim at Google Docs BBC News (11/5/10)
Office 2010: banking on Apps Sydney Morning Herald, David Flynn (11/5/10)
Microsoft’s two-pronged strategy for Office 2010 BBC News, Tim Weber (12/5/10)
Revamped Microsoft Office Will Be Free on the Web New York Times, Ashlee Vance (11/5/10)
Microsoft Predicts Fastest-Ever Adoption of New Office Software Bloomberg Businessweek, Dina Bass (12/5/10)

Questions

  1. Discuss the business logic of giving away products free.
  2. Discuss the likely success of Microsoft’s response to the changing market conditions for office applications software.
  3. Explain what is meant by ‘cloud computing’. What opportunities does this provide to Microsoft and what are the threats?
  4. What is meant by ‘network economies’? How do these benefit Microsoft? How is Sharepoint relevant here?
  5. Are network economies likely to increase or decrease for Microsoft in the future?

The EU has imposed a record £680m fine on Microsoft for imposing unreasonable prices on their rivals for access to the Windows code that they required to be able to build complementary software. The record fine is a drop in the ocean for Microsoft, representing just two weeks cash flow, but they hope that this marks an end to the dispute with the EU. They argue that new working practices will help improve interoperability and that they have already begun to offer better access to code for their competitors.

Microsoft hit by 899m euro fine for failure to comply with EU ruling Times Online (28/2/08)
EU fines Microsoft record £680m ‘to close dark chapter’ in fight against monopoly Guardian (27/2/08)
The EU’s frustration with Microsoft Guardian (27/2/08)
Ten years of legal wrangling between Microsoft and EU Guardian (27/2/08)
Pity the big, bad wolf Guardian (27/2/08)

Questions

1. Explain why the EU Competition Commissioner has ruled that Microsoft has behaved anti-competitively.
2. Describe the role of the EU’s Competition Commissioner in improving the competition in markets.
3. Examine other options available to the EU’s Competition Commissioner to improve the competitive situation in European markets.