Case 2: Microsoft Defends Its Empire

CASE 2: Microsoft Defends Its Empire

Microsoft has been the number one IT company in the whole world. But with the coming of the internet and the need of internet usage, the company is now struggling to be at par with its competitors. The company has changed its business model by offering subscriptions and cloud services. Now they are being more aggressive in improving the business and company performance. Does their aggressive move could help improve the business or maybe the downfall of the company? It discusses the risks of a company who is used to selling products and now offering a lower subscription yearly rate. It also discusses the challenges of Microsoft and Stephen Elop, his new Executive VP for devices and services.

The conclusions Steve Ballmer draw about the future of Microsoft

One of the conclusions that the CEO Steve Ballmer forecasted in the future of Microsoft is the upgrading of their existing software to more internet-collaborated software. They have the SharePoint and Exchange servers that would help them adapt to demands of the internet based applications.

They have also shifted from selling their expensive software to renting out their software for a monthly recurring fee. So customers tend to pay less for a subscription rather than buying the program.

With the increasing pace of mobile computing like iPhone Tablets net books and Android devices, access for free or cheap Office apps is available. So Microsoft lowers drastically their software prices to compete.

Microsoft’s subscription model

Microsoft new marketing strategy is to encourage the consumers to subscribe or rent their products rather than buying the disc. This theory is like subscribing to Netflix or HBO Go where you pay for a small monthly fee and get to watch movies that are available rather than buying all the Blue ray or DVDs on stores- because buying discs is way more expensive. People can buy Office Home 2013 for a high price of $219 for one machine. But with...