Microsoft Diversification Strategy Final

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Microsoft Diversification Strategy Final DiversificationDiversification StStrategyrategy Presented By: RahulRahul KumaKumarr (10/(10/PMB/0PMB/07575)) Company Pr ofile Industry : Computer sof tware, Consumer electr onics Computer hardware, Video games IT consulting, Online advertising, Automotive sof tware Founded: Apr Apr il 4, 1975 , Albuquerque, New Mexico Founder(s)under(s) Bill Gates Paul Allen HeadquartersHeadquarters OneOne Micr osof t Way Redmond, Washington, United States Key peopleple SteSteveve BalB allmelmer ( CEO) Br ian Kevin Turner Turner (COO) Bill GatesGates (Chairman) Ray Ozzie (CSA) Craig Mundie (CRSO) RevenueRevenue $6$62.2.48484 billion (2010)(2010) Operating incomeme $$2244..00998 billion (2010)(2010) Pr ofit $$1188..77660 billion (2010)(2010) Employeesyees 89,89,000000 (20(2010)10) History Founded By Bill Gates with Paul Allen Started selling a version of BASIC (a pr ogramming language) with Altair 1980, IBM selected Micr osof t to develop a OS for its PCs Paul Allen lef t Micr osof t in mid 1983s Micr osof t intr oduced Windows in mid 1980s 1993, it intr oduced Windows NT to competed with UNIX History cont. 1998, US Justice department filed antitrust charge that Micr osof t had stif led Internet Br owser competition and limited consumer choice 1995, Founded Micr osof t Network (MSN) Exper ienced toughest economic downturn due to burst of dott--ccom bubble Aimed to position its OS and to diversif y in the other sof tware, IT services and other web based ser ives Development f actors in Emerging IT Industry Customers were expecting to get more out of their technology investments Pr ocurement department became more involved in the IT purchasing pr ocess In Addition, CEOs became more demanding of the return on Investment (ROI) on new technology spendings IT Spendings of companies First annual decline after 1958 Trailing 3 calendar year revenue and operating pr ofit C AGR* 1 2 % O I M FT 1 3 % R EV 2 4 % ( $ ) 1 2 % Or l - 1 % - 3 % - 7 % I t l - 4 % y r gr wth ($) REV OI 0 % M FT $ ,49 $4,4 I M 0 % ($) $ , 5 $ , 4 Or l ($ , 87) ($ 65) 9 % I t l ($ ,585) ($ , 54) ll 9 % I M $7 5 ($7) ll $9,564 $796 2 % - 5 % Ci Ci ($ ,678) $ 94 - % % % % % * bbasedased on three year growth figures for operating ininccome,ome, excluding certain items and stock based compensation expense for calendar year 2003. A reconciliation of the nonnon--GAAPGAAP measures presented above to to reported GAAPGAAP operating incomeincome for the relevant perperiodsiods cancan be found inin slide #13. Towards the next big thing Although the IT industry looked rather gloomy in 2006, analysts predicted, based on previous cycles, that industry would take off again in 2007 or 2008. In particular a number of f actor would dr ive the next gr owth cycle for the technology. Some foresaw that sof tware spending would reach US$325 billion by 2008, and the gr owth rate of the market was expected to be in the range of 3% to 7% annually. Factors Service Or iented Architecture and Web Services Enterpr ise Sof tware IT Inf rastructure Applications as Services Downloadable pr ograms Br idge between desktop and Internet computing Web based Enterpr ise Applications Extended Internet Embedded devices RFID Biometrics Social omputing Gaming and Internet TV, Entertainment , IM, Blogging, streaming, Marketing and Media What does Micr osof t¶s business model look like today? us o er e onsu er n er rise B Diversified Business odel uuss o erer e da a based on fiscal ear o da e infor a ion..
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