MICROSOFT CORPORATION : THE DESIGN OF

MICROSOFT SUPPORT NETWORK 1.0

Submitted by:
Group 6
PGP/18/161 RISHANKU
GOYAL
PGP/18/184 ANKUR
CHANDRA
PGP/18/188 BHUVNESH
PRAKASH
PGP/18/325 SNEHAL RAWAT

1. What factors suggest that Microsoft's PSS Division needs a more

comprehensive and flexible approach for its service offerings?

There was an upward spike in customer service costs in periodic review of the division's

Profit and Loss statement.

Customers using several Microsoft products were very confused and frustrated with

Microsoft's technical support services.

Microsoft's support services were not as good as those offered by some competitors.

Several factors contributed to the nondescript nature of Microsoft services.

Hodgepodge of service offerings, some products had no support services, some offered

unlimited "free" service.

Customers owning several Microsoft products, the service offerings were confusing

because it was difficult to know which service came with which product.
Expert users felt that they were paying for services they didn't need on basic applications.
Customers could not get sophisticated support services on some of Microsoft's newly
introduced line of highly technical advanced systems, even if they were willing to pay

extra.
Each service provider had to understand working of all 150 Microsoft products,
competitors product knowledge and every industry specific product application

2. Based upon the guidelines that senior management has provided

Trish May what product support strategy has Microsoft envisioned?
Emergence of concept of a service offering matrix

To summarize various service offerings

It was referred as the Microsoft Support network 1.0

Tactical Concerns

They can go for both standard as for free and an option for fee

Free service has to be provided for having competitive advantage and develop
favorable brand attitude

Therefore problems occurring before 90day can be free

They could offer standard service for free for desktop application and charge
personal operating systems, hardware, and development product owners a fee
after 90 days

3. How should the Microsoft Support Network 1.0 matrix bet

structured in terms of rows and columns?
Microsoft Support Network 1.0 matrix can be structured in 4 ways

Alternative 1 : Across Rows :Problem-Based Services , Across Columns :Product

Categories
Alternative 2: Across Rows : Problem-Based Services , Across Columns :Customer

Segments
Alternative 3: Across Rows : Responsiveness-Based Services , Across Columns :

Product Categories
Alternative 4: Across Rows : Responsiveness-Based Services , Across Columns :
Customer Segments

Pros for Responsiveness-Based Services against Problem-Based Services

Problem based service would be valuable to the customer only when they which

problems they could expect to have. Knowing this in advance is difficult

It will be easier for the manager to make fee decisions if the services are offered as a
function of responsiveness

Across the columns the choice between the 2 options i.e. Product Category or Customer segment
both have their respective advantages. If we go for a Product category based classification, we
will meet the objective of making the customer aware of the kind of service will they get for a
product. If we choose Customer segment, we will be able to tab the customer surplus for
customers that deal with mission critical applications for their businesses. Hence alternative 3 &
4 are better choices among the 4 alternatives.

4. Which services should Microsoft offer; a) offer as free or

"standard, b) sell as an option for an additional fee, and c) not
offered (but have a 3rd party service provider partner offer)?
Free services Problems that occurred within the first 90-days of ownership would be given free.
General Information, Fast tips and electronic services
Installation and Start up services
Additional Fee
Standard support post 90 days
System Integration and Customized support services, Priority service
Premier support
Not offered
Mission critical and heavy-customization (beyond a certain point)
Cross-platform and cross-integration (beyond a benchmark)

5. What implementation problems should PSS managers anticipate? How can PSS
managers successfully overcome them?
Industry pundits speculated that it would be impossible to eliminate "free" Installation & StartUp service on application, PC operating systems, and developer products.
Customers would interpret "fees" for this period as an unethical way for software vendors to
"pad" their profits.
Many would wonder if suppliers deliberately made their software difficult to use so that
customers would have no choice but to buy service.
Managers would have a more difficult time designing Usage & Productivity assistance. While
service engineers could address most problems associated with application software at a
relatively low cost, they would incur significant costs for PC operating systems, development
products, and hardware problems.

In addition, problems that occurred after the first 90-days of ownership were particularly costly.
Systems Integration and Customized support services would be quite expensive to deliver.

There are two solutions about this issue First is to include systems integration and customized support as standard and cover their costs
via a hefty price premium on software or sell it as an option at a significant fee.
If services were offered as a function of responsiveness, managers would havean easier time
making fee decisions. They could offer Standard Support for free on an unlimited basis for
desktop applications.
At the same time, they wouldprobably have to charge personal operating systems, hardware, and
development products owners a fee after 90-days because such usage and productivity problems
were often quite costly.
They would also charge a significant fee for Priority and Premier Support due to staffing
requirements. The task force had to make a series of intriguing decisions concerning what
services "not to offer".
Given that most applications and PC operating systems software was being "pre-installed" by
original equipment manufacturers (e.g., IBM, Compaq, Dell), some managers argued that
installation and start-up problems should be handled by those firms.
At the same time, some task force members argued that local computer dealers should be asked
to handle basic usage problems, particularly those that occurred within 90-days of purchase. As
for the high-end services, the firm would have to make some difficult choices.
The task force would also have to determine how to charge customers for support services,
particularly those provided over the phone. Competitors were relying upon a variety of
approaches. Some sent an invoice following the call. Others charged via 900# or had service
engineers take credit card numbers. Alternatively, some competitors either included in software
packages or sold separately "incident coupons" that entitled the bearer to make a number of prespecified technical support calls. Adobe Corporation took a different approach. It provided
customers with "service credits" as a function of the dollar value of Adobe software that they
purchased. The more software purchased the more credits received. When needed, the customer
could redeem service credits for technical support.
Given the large size of many developers and corporate accounts, PSS managers would have to
decide how many individuals within a customer firm would be eligible to receive service under a
technical support contract. Furthermore, managers would have to designate specific developer
programmers and corporate MIS personnel as points of contact for service initiatives. For

international companies, access from specific geographic regions would also have to be
specified.
Communicating the details of the Microsoft Support Network 1.0 would be another challenge for
Microsoft. Company wanted its customers to be delighted in their ability to choose from a
variety of high-end services while concluding, "I don't have to pay for what I don't need!" It was
not at all clear how these communications goals would be achieved

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