Microsoft Corporation

BA 569

Narong Sriwannawit

Microsoft 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 Vista's 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. Get started and move quick: In order for Microsoft to get back to the track, Company should start by asking what is the potential market that they should concentrated with. Microsoft has a lot of project in their hand but without prioritizing and timelining. Smartphone is one of the market that Microsoft should be able to join. Window mobile was expected to be the main competitor for an IPhone since its first debut in the market. However, 5th generation of iPhone have launched to the market, however, we still cannot see any move from Microsoft. For the organization aspect, even though Bill Gates has been quoted saying that Microsoft is a flat structured organization, Microsoft should make the better use of flat structure to the company. Bottleneck of the decision should be removed from the company. Each project manager should have adequate power decision to run the project smoothly and come up with some concrete product. In july 2008, after 3 decades in Microsoft, Bill gate stepped down from his position. Many analysts saying that this action could strengthen the company because Bill Gatess time constraint gives the negative effect to the company. Lastly, M&A transaction should be decrease in order to create and motivate its employee to change the company from buyer to innovator.

Microsoft Corporation

BA 569

Narong Sriwannawit

What 3 pieces of information do you wish you had/need 1. How far is the window mobile developed? Do they have any highlight feature to compete in the market?

2. Whats going on with the company that was merged by Microsoft? Do they performance well or become the good resource for the company?

3. Recently, what is the project that company working on? And what are the potential of those projects to conquer the market?