Windows 8 Case Study 464l56

WINDOWS 8 CASE STUDY

SWOT

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PESTLE

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PORTER’S FIVE FORCES

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VALUE PROPOSITION

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SWOT

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Strengths -

friendly software (“Easy-to-use software”) At least visually, Windows 8 is the simplest version of the operating system ever. While operating systems have largely seen only incremental innovations on the basic formula, i.e. the interface mimics a real-life desktop, with documents filed in folders and pictographic icons that act as visual metaphors of a software program’s function, since Windows 1.0, Windows 8 represents a rupture with this blueprint. The new face of Windows is a grid of tiles; clicking on a tile will bring up your news, or your inbox, or your documents. Even the famous start button, which had been occupying the lower left corner since Windows 95, is gone. Though s can still access the old desktop, it has been relegated to an application within Windows 8. (http://www.fastcodesign.com/1670705/microsoft-new-designstrategy)

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Highly qualified team/staff Microsoft hires a mix of university and industry talent worldwide and try to retain them by offering an exceptional working environment, scale in resources, broad customer reach, competitive compensation and benefits.

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Large market capitalisation Microsoft is in the top 20 largest US companies by market capitalisation, or the market value of a company's outstanding shares. (https://www.theonlineinvestor.com/slideshows/? slideshow=largecaps&page=6)

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Strong Research and Development Microsoft employs approximately 128,000 people, of which 44,000 are in product research and development.

Image: Research and development expenses Source: http://www.microsoft.com/investor/reports/ar14/index.html

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Strong partnership with hardware manufacturers Microsoft does not focus on hardware development. It distributes software through Original Equipment Manufacturers (OEMs) that pre-install Microsoft’s software on new PCs, tablets, servers, smartphones and other devices that they sell to end customers. Therefore, Microsoft needs partnerships, which will pre-install Windows operating system on computing devices. Microsoft have distribution agreements with all of the multinational OEMs, such as Acer, ASUS, Dell, Fujitsu, HTC, Hewlett-Packard, LG, Lenovo, Samsung, Sony, Toshiba, and with regional and local OEMs.

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Advanced pressure sensitivity technology in touch system Windows 8 features touch technology is in a state of advancement that is unprecedented in any of its competitors. The platform allows pressure sensitivity to an extent that has made some third-party party app developer choose the system exclusively for providing full technological for their ideas, despite the popularity of Apple’s iPad, which carries iOS as its operating system. One example is the app StaffPad, which has been built solely for Windows 8, as the developer did not wish to compromise the app’s 3

functionality by adopting a more popular platform with the wrong kind of technology. StaffPad creator David Hearn states in StaffPad’s blog: “One of the questions we get asked the most is: ‘Why did you build this only for Windows 8?’. It can seem strange at first glance, especially considering the popularity of iOS and Android. Right from the start, we knew that Windows 8 was the only platform that would let us build our dream the way we wanted to, and it's the only OS that s pen input in a meaningful way.”

Weaknesses -

Criticism over security flaws Microsoft’s operating systems have the greatest number of vulnerabilities, as illustrated in Figure X, and according to National Vulnerability Database (NVD).

Figure X: Number of vulnerabilities of different operating systems Source: http://www.gfi.com/blog/the-most-vulnerable-operating-systemsand-applications-in-2011/ -

Dependence on hardware manufacturers Former Microsoft chief executive officer Steve Ballmer has declared that Microsoft was considering making more of its own software, as the company had not been able to find a reliable design partner. That is the main 4

difference between Microsoft’s and Apple’s business models, and Apple’s share price has outperformed Microsoft’s consistently. Moreover, if a cheap software that was able to match Window’s popularity were to appear, hardware manufacturers that formerly developed products that run Windows may choose the alternative. (http://www.informationweek.com/itleadership/does-microsoft-really-need-to-make-its-own-hardware/d/did/1107701?) -

Bugs in first releases of products Microsoft confirmed and then fixed a widespread bug in the Windows 8 release preview, which causes PCs based on newer Intel chipsets to freeze on a seemingly random basis, and once it happens, there is no course of action but a hard reset of the machine. Google also found and published a bug on Windows 8.1 which consisted of a security flaw that allowed lower-level s to become s, giving them access to sensivitive server functions they would normally have no right to. (http://www.engadget.com/2015/01/02/google-posts-unpatched-microsoftbug/ )(http://windowsitpro.com/windows/microsoft-fixes-serious-windows8-release-preview-bug)

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Occasional technical issues with Windows updates Automatically installed Windows updates can cause system malfunctions, such as result in missing drivers. There are number of occasions where Windows updates have caused technical disadvantages to s with negative implications to their brand image. The most notable case is the Windows 7 update of KB 3004394 in December 2014 that automatically blocked the installation or update of graphics drivers such as AMD’s new Catalyst Omega and caused difficulties in installing GeForce drivers and a set of other drivers and software [http://www.forbes.com/sites/jasonevangelho/2014/12/13/new-windows-7patch-is-effectively-malware-disables-graphics-driver-updates-andwindows-defender/]

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Internet Explorer, which is Windows’ browser application, has been losing market From January 2011 to December 2011, while Chrome and Firefox have increased its market share and have dominated the market, IE’s market share has been decreasing, as can be seen in Figure X.

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Figure X: Market share distribution of browser applications Source: http://www.w3schools.com/browsers/browsers_stats.asp Threats -

Piracy At the beginning of 2011, Steve Ballmer, who was the Microsoft CEO, met government officials, including United States president Obama, and Chinese president Hu Jintao to discuss how only 1 in every 10 copies of Windows in China was legit (http://www.neowin.net/news/ballmer-9-out-of-10-copiesof-windows-in-china-is-pirated).

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Currency exchange rates Currency exchange rates affect demand for application/operation software and hardware, and fluctuating currencies can negatively impact revenues in the global marketplace.

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Antitrust law In 1998, the United States Department of Justice accused Microsoft Corporation of becoming a monopoly and taking abusive practices contrary to the Sherman Antitrust Act 1890 (http://www.stern.nyu.edu/networks/Microsoft_Antitrust.final.pdf)

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Emergence of competitors Microsoft Corporation’s primary competitors include some of the most prominent technology companies in the industry. Well-known brands such as Apple, Google and IBM are examples. The company faces stiff competition in several key areas of the technology sector, as it is a diversified corporation that provides many types of products and services.

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PESTLE

Economical -

Changes of labour costs and costs of other resources Particularly, the global economic and financial crisis of 2007 – 2009 had proved to have highly detrimental impact on Microsoft, leading to layoffs of more than 5,000 employees in 2009[http://money.cnn.com/2014/07/17/technology/enterprise/microsoft-jobcuts/] and this illustrates the potential impact of economic factors on business performance. Changes in exchange rates between USD and other currencies is another significant factor affecting Microsoft profit reports due to the fact that the company generates substantial part of its revenues from international markets.

Social Microsoft is greatly impacted by a range of social factors such as demographic changes, changes in consumer attitudes and opinions towards consumer electronics products and services, media perception of the brand and health and welfare of target customer segment. It can be argued that the impact of the majority of modern social factors can be positive in relation to Microsoft products and services. -

Accessibility of technology to disabled people 7

Microsoft has a commitment to promoting accessibility, thus making it easier for everyone to see, hear, and use technology, and to personalise their computers to meet their needs and preferences. Accessibility is what makes computer use possible for many people with impairments. Microsoft’s mission is to enable people and businesses to realise their full potential, and the company claims to deliver on that commitment by striving to create technology that is accessible to everyone – of all ages and abilities. http://www.microsoft.com/enable/microsoft/mission.aspx Legal

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Antitrust laws http://www.reuters.com/article/2014/08/26/china-antitrust-microsoftidUSL3N0QW1C520140826 A recent probe by China’s State istration for Industry and Commerce into the ways Microsoft distributes its Internet Explorer browser and Windows Media Player and sells its Office and Windows software in China[1] can be mentioned as a relevant example of impact of a political factor.

Environmental -

Carbon Neutral Company

Microsoft made a commitment to make their operations carbon neutral in May 2012, and thus achieve net zero emission for their data centers, software development labs, offices, and employee business air travel. https://www.microsoft.com/environment/our-commitment/our-footprint.aspx -

Greener IT initiative

Microsoft is committed to developing software and technology that helps people and organisations reduce their impact on the environment. Some projects include Energy-smart buildings and Reducing Travel and Carbon with Unified Communications. -

Cloud Computing

Cloud computing is ing a network of remote servers hosted on the Internet to store, manage, and process data, rather than using a local server or personal computer. Microsoft Azure is Microsoft’s cloud computing platform, which allows the building, deploying, and managing of applications and services through a global network of Microsoft managed datacenters. PORTER’S FIVE FORCES -

Threat of new Entrants 8

Windows is the standard operating system in PCs, as can be seen in Figure X. Basically, Windows competes against itself with its outdated operating systems (http://readwrite.com/2012/08/03/microsofts-biggest-windows-8competitor-itself). It has many partnerships and alliances with Original Equipment Manufacturers (OEMs) that help maintain its position. Besides that, other competitors, such as Apple, have small operating system market share. To effectively compete, Microsoft affirms that they provide “choice, value, flexibility, security, an easy-to-use interface, compatibility with a broad range of hardware and software applications, and the largest network for any operating system to customers.

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Figure X: Operating systems market share 10

Source: http://www.netmarketshare.com/operating-systemmarketshare.aspx? qprid=9&qpcustomb=0&qptimeframe=M&qpsp=143&qpnp=13 -

Power of suppliers Suppliers do not possess much bargaining power, considering that Windows is the most reliable operating system in the market, and PC manufacturers find it hard to sell their products with any other system.

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Power of Buyers Microsoft has a large number of faithful customers and it sells a comparatively low volume of its products to each buyer, so that they have little significance as individuals. Companies, however, have more significance as potential buyers due to larger volumes, and they are usually resistant to change of their operating system, especially from Windows 7, which maintains the basic format of former Windows’ versions, to Windows 8, an operating system that has had dramatic changes in relation to past versions and is more tablet-oriented. There is a higher bargaining power for these customers.

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Availability of Substitutes Operating systems such as Linux and Mac OS have experienced increasing acceptance in the market, though it is still primarily dominated by Windows. Windows XP and Windows 7 actually represent the most fierce competition for Windows 8, as some s are just comfortable with the old interface and reliable system.

VALUE PROPOSITION http://www.financial-planning.com/video/The-Windows-8-Value-Proposition2683336-1.html http://www.onwallstreet.com/video/The-Windows-8-Value-Proposition-2683336-1.html Tom Feher, Microsoft’s Financial Services Industry Director states that Window’s 8 value proposition consists of providing a platform to achieve the capabilities of being productive, proactive and flexible. Additionally, Windows 8 can run all Windows 7 and Windows XP applications, which reaches out to those who still have core applications on this system. Windows Store and Marketplace allows the to run new Windows 8 applications. Core Microsoft applications customers are used to are also still available, like Office, Outlook, and business apps. Windows s, who are accustomed to the desktop on the previous versions of Windows, will have access to it as an application, and also be able to pin applications or documents which are most frequently run on the start-up screen. This allows Windows 8 to be configured to the look and feel the wants, whether it be on Surface (Microsoft’s tablet), a full-blown PC or Windows Phone.

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