Mot1431 Teaching Case 1

Delft University of Technology
Department of Technology Strategy and Entrepreneurship

Technology & Strategy (MOT1431)
TEACHING CASE No. 1

Rise of Microsoft

Course Coordinator: Dr. Geerten van de Kaa

Submitted By: Amir M. Shaikh CTiG - EMMEP 2008-2010 Student No.: 1537415

Date: 3rd February, 2010.

Teaching Case No.1: The Rise of Microsoft

3rd February, 2010.

Discussion Questions:

1. What factors led to Microsoft’s emergence as the dominant personal computer operating system provider? Is Microsoft’s dominance due to luck, skill, or some combination of both?

The emergence of Microsoft as dominant personal computer operating system provider was mainly due to the interest in strategic management of the softwares, to enhance the profits and to achieve dominance in the market of computer software. Alongwith this, the market dominance competition between Macintosh and IBM, played a vital role in enhancement of Microsoft software development. The major factors that influenced the Microsoft’s dominance include;      

The ability to innovate (starting from MSDOS to Windows 7); Designing and production capabilities (Large number of related minor software companies); User friendly systems (supportive graphical user interface, compatible with most of the dedicated softwares, includes some attractive packages like games, etc); Marketing of products (sale points accessible through out the world); Cheap and reliable(easily affordable than other system softwares); Customer support (Updates, Online services, free beta versions, sales and services).

The profits, market adaptability, customer satisfaction, cost effective, user friendly and high return for the Microsoft operating systems, also forced the other (dedicated or special) software companies to make compatible softwares for Microsoft and form a bond of compatibility with Microsoft softwares,

In my opinion, in the beginning, there was a slight factor of luck for Microsoft, but after that all the credit goes to Microsoft’s skills, their ability to protect market position and remain as the leader. It was an opportunity provided to Microsoft and they dealt with it effectively.

2. How might the computing industry look different if Gray Kildall had signed with IBM?

The computing industry, may be having more competition for dominance and even large number of computer software companies, because Microsoft was also making other softwares (dedicated) at that times, but one opportunity changed their position. By looking at the growth of the computing industry, a sudden revolution in this technology, might would have taken place, resulting in innovation of new and versatile standards.

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Teaching Case No.1: The Rise of Microsoft

3rd February, 2010.

Along with this, it might also have been possible that the computing industry may only be dominated by IBM, and other minor companies (like Apple) might not be able to meet the challenges for being dominant and get rejected by users, due to immensely high dominance.

3. Does having a dominant standard in operating system benefit or hurt consumers? Does it benefit or hurt computer hardware producers?

The dominant standard in operating system benefits customer, if it meets the customers’ requirements. The consumers are always looking forward for;     

Low priced operating systems; User friendly environment; Services and sales easily available; Compatible software for multi tasks; Quality or reputation of the operating system.

However, if these expectations of customers are not met, the majority of customers will switch to another standard of operating system. Along with this, the dominant standard also limits the innovation of relevant technologies and standards.

The computer hardware producers are usually, affected inversely due to dominant standard in operating systems, because they have to limit their production for dedicated systems and softwares, that must be compatible with the dominant standard. Along with this, the profit margins for research, development and production, is also limited and dependant on the dominant standard of operating system.

References:     

Shapiro, C. & Varian, H. R. 1999. The Art of Standards Wars. California Management Review, 41(2): 8-32. Arthur, W. B. 1996. Increasing Returns and the New World of Business. Harvard Business Review, 74(4): 100-109. Katz, M. L. & Shapiro, C. 1986. Technology Adoption in the Presence of Network Externalities. The Journal of Political Economy, 94(4): 822-841. http://www.wikipedia.org/ http://www.google.co.uk/

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References:      Shapiro, C. & Varian, H. R. 1999. The Art of Standards Wars. California Management Review, 41(2): 8-32. Arthur, W. B. 1996. Increasing Returns and the New World of Business. Harvard Business Review, 74(4): 100-109. Katz, M. L. & Shapiro, C. 1986. Technology Adoption in the Presence of Network Externalities. The Journal of Political Economy, 94(4): 822-841. http://www.wikipedia.org/ http://www.google.co.uk/ Page 2 of 2