CHAPTER:-1

1.AN OVERVIEW OF THE INDUSTRY

1.1 Brief Histroy of the Industry-Internet

The Internet started in the 1960s as a way for government researchers to share
information. Computers in the '60s were large and immobile and in order to make use of
information stored in any one computer, one had to either travel to the site of the
computer or have magnetic computer tapes sent through the conventional postal system.

Another catalyst in the formation of the Internet was the heating up of the Cold War. The
Soviet Union's launch of the Sputnik satellite spurred the U.S. Defense Department to
consider ways information could still be disseminated even after a nuclear attack. This
eventually led to the formation of the ARPANET (Advanced Research Projects Agency
Network), the network that ultimately evolved into what we now know as the Internet.
ARPANET was a great success but membership was limited to certain academic and
research organizations who had contracts with the Defense Department. In response to
this, other networks were created to provide information sharing.

January 1, 1983 is considered the official birthday of the Internet. Prior to this, the various
computer networks did not have a standard way to communicate with each other. A new
communications protocol was established called Transfer Control Protocol/Internetwork
Protocol (TCP/IP). This allowed different kinds of computers on different networks to
"talk" to each other. ARPANET and the Defense Data Network officially changed to the
TCP/IP standard on January 1, 1983, hence the birth of the Internet. All networks could
now be connected by a universal language.

Model of Univac I computer, c. 1954

The image above is a scale model of the UNIVAC I (the name stood for Universal Automatic
Computer) which was delivered to the Census Bureau in 1951. It weighed some 16,000
pounds, used 5,000 vacuum tubes, and could perform about 1,000 calculations per
second.It was the first American commercial computer, as well as the first computer
designed for business use. (Business computers like the UNIVAC processed data more
slowly than the IAS-type machines, but were designed for fast input and output.) The first
few sales were to government agencies, the A.C. Nielsen Company, and the Prudential
Insurance Company. The first UNIVAC for business applications was installed at the
General Electric Appliance Division, to do payroll, in 1954. By 1957 Remington-Rand
(which had purchased the Eckert-Mauchly Computer Corporation in 1950) had sold forty-
six machines.

The Internet has revolutionized the computer and communications world like nothing
before. The invention of the telegraph, telephone, radio, and computer set the stage for this
unprecedented integration of capabilities. The Internet is at once a world-wide
broadcasting capability, a mechanism for information dissemination, and a medium for
collaboration and interaction between individuals and their computers without regard for
geographic location. The Internet represents one of the most successful examples of the
benefits of sustained investment and commitment to research and development of
information infrastructure. Beginning with the early research in packet switching, the
government, industry and academia have been partners in evolving and deploying this
exciting new technology. Today, terms like “[email protected]” and
“http://www.acm.org” trip lightly off the tongue of the random person on the street. 1

This is intended to be a brief, necessarily cursory and incomplete history. Much material
currently exists about the Internet, covering history, technology, and usage. A trip to almost
any bookstore will find shelves of material written about the Internet. 2
1.2 Business Process of the Industry

Worldwide influence of the internet is well-established and acknowledged. Penetration

rate of the internet has been phenomenal; almost 1/3rd of Human population are accessing
the internet. The way business is conducted in this digital age has changed due to so many
people logged on to the internet.

Advancement in communication and information technology has further strengthen the

role of the internet in business. The internet is widely used in organization for marketing
and promotion of products and services. The internet is used to deliver customer support,
share information and provide training to employees.

With the internet becoming a powerful tool for employees, the impact on business is
undeniable.

Internet and Porter’s Five Force Model

Porter’s five force model is a framework for industry analysis, business strategy
development and study competition. The five forces of the model are the threat from
upcoming and future competition, threat from existing substitute, bargaining power of
consumers, negotiating power of suppliers and threat of competition. Internet has great
Impact on all five force of the model:

Threat of new entrants: The internet has considerably lowered entry barrier in setting up
new enterprise. The setting up of a new company does not require much capital
investment, for example, online retail sites, etc. Ever increasing competition has lowered
the margins.

Threat of new substitute: The Internet has reduced the product life cycle; shelf life of
products and encouraged innovation is customer serving.
Bargaining power of customers: The internet has made the customer well informed about
products and available substitute. Companies have to be careful in presenting
differentiation and pricing.

Bargaining power of suppliers: Suppliers are well informed about happening in the
industry thanks to the internet.

Threat of competition: The internet has made transparency and honest important factor in
success of the company. Customers tend to know more about the company. The internet
has lowered the cost of searching new available products.

Internet and the way business is conducted

The internet has changed the face of business. It has opened up new avenues of conducting
business. Below are some impacts of the internet on business:

Communication: communication technology combined with the internet has given a new
dimension to connectivity and dispersion of information. Employees are in constant touch
through email, instant messaging, office intranet, etc.

Collaboration: The internet has facilitated collaboration among employees of organization.

Geographical boundaries no longer hamper project work and sharing of information.

Business Transaction: The internet has encouraged the culture of online business or e-
commerce. In recent years many players have opened shops through e-commerce. Internet
banking, payment gateways, etc. are part of normal supply chain transaction.

Work Flexibility: The internet has enabled workers to log in from remote location and
home. It has helped on the move employees by remaining in touch with happenings of
work.
Web based application: The internet has facilitated the development of concept like cloud
computing, which has enabled process and storing of data in large proportion. The internet
has helped reduce infrastructure cost of the company.

The internet thus has made a big impact in the way the business gets conducted in both
positive as well as a negative way. The internet has made many business obsolete example
post offices. Online security issues like hacking, identity theft, etc. are a constant threat to
internet users.

1.3 Market Demand And Supply-Contribution to GDP-Revenue

Generation

Market Demand and supply

Though interest in using the Internet in economics and other business courses has been
growing, relatively little formal discussion has focused on how the microeconomic
principles curriculum can incorporate the Internet's effect on firms and consumers. In this
article, the authors investigate how the rapidly growing Internet is affecting the position of
supply and demand curves, the elasticity of supply and demand, and other microeconomic
topics. They offer suggestions on how these topics can be used to improve classroom
discussion and enhance students' intuition.

Rapid growth of urbanization across the globe is changing the way of using devices and
things present in the technological environment. Internet of Things (IoT) includes the
devices, services and solutions which have connectivity feature with internet. The devices
are embedded with sensors, chips, and others to enhance the user’s experience. These
devices and services are efficient to operate various tasks with less time consuming
methods. The growing trend of internet enabled devices and rising need of internet
connectivity are some of the major factors which are anticipated the positive growth of
internet of things market globally.
Technological advancements in semiconductors offer the advantages to develop
lightweight and efficient devices which are much smarter than the conventional and heavy
devices. Rapid advancements in manufacturing, electronics and IT sectors across the globe
are gaining traction from consumers which in turn intensified the demand for internet of
things (IoT). Increasing usage of internet along with rising penetration of smart phone
users around the world is one of the prime factors behind the positive growth of this
industry.

Market size and forecast

The global internet of things (IoT) market reached USD 598.2 Billion in 2015 and the
market is expected to reach USD 724.2 Billion by 2023. Further, the market is projected to
register a CAGR of 13.2% during the forecast period 2016-2023 globally. The internet of
things comprises components and devices that enable connectivity and exchange of
information. Expansion of e-commerce sector and shifting of industries towards
applications and online helping portals for the customers are the major reason behind the
growth of this industry.

However, consumer electronics segment accounted the market share of 32% in 2015 of
overall market of internet of things. Rapid adoption of internet connectivity enabled
appliances such as washing machines, microwaves, televisions, etc. and ease of operating of
appliances through remote operating facility are the prime features which are expected to
uplift the market of internet of things (IoT).Geographically, Asia-Pacific is expected to
showcase a tremendous growth in the market of internet of things (IoT) across the globe in
near future. The market is driven by presence of huge players of consumer electronics in
Asia-Pacific region such as Philips, Samsung, etc. which leads to introduce advanced and
affordable consumer electronics in near future. Factors such as government initiatives
towards adoption of advanced technology and positive GDP growth in developing nations
are expected to bolster the demand for internet of things (IoT). The market of Asia-Pacific
region acquired 36% of the global revenue share in 2015 and the market is anticipated to
grow at a CAGR of 10.2% during the forecast period i.e. 2016-2023
Contribution to GDP

: Internet infrastructure in India might still be rudimentary, but it still is emerging as a

significant contributor to the country's gross domestic product (GDP).

Internet infrastructure in India might still be rudimentary, but it still is emerging as a

significant contributor to the country's gross domestic product (GDP).

In 2009 (the year for which the study was conducted), the Internet accounted for 3.2% of
the country's GDP. It contributed 5% of the GDP in five years ended 2009, according to a
study by global consultant McKinsey and Co. Compare this with the fact that agriculture
contributed around 14% to the country's GDP in 2010-11, according to the Economic
Survey.

The study included 13 countries-Group of Eight (the US, the UK, France, Germany, Italy,
Japan, Russia and Canada), India, Brazil, China, South Korea and Sweden. On average, the
Internet contributed 3.4% to GDP in the 13 countries. Sweden, which has a strong Internet
infrastructure, had 6.3% of its total GDP from the Internet. Russia had the lowest share
(0.8%) of Internet in its GDP.

India and China are strengthening their position in the global Internet ecosystem rapidly
with growth rate of more than 20%. Though the US dominates the Internet, it is British who
spend the most on the Internet. In 2009, online shoppers in the UK spent around $2,500 on
an average, compared with $814 spent by US shoppers. French shoppers spent $555 on an
average during 2009.

The Internet's contribution to India's GDP is primarily driven by export instead of local
consumption. In other countries, private consumption accounted for half or more of the
contribution, around 70% in South Korea.

Revenue Generation

A good revenue model is a proven technique used by digital businesses globally, from
startups to global corporations, to generate income from traffic on their website, mobile
apps, and via digital channels.
The 10 digital revenue model options explained in this include both ad revenue models and
charging for access to a digital service including freemium revenue models where limited
free access is provided with fees charged for the full service.

I created this post originally in 2010 to support a revenue model spreadsheet for site
owners to forecast their revenue generation. The main parameters you need to set are the
variables for each Ad Unit or Container Type (blue fields) and it works out the revenue
earning (orange fields) for you!

The site ad revenue model

If you 'plug-in' some average figures for pay-for-performance-based advertising options

like cost per click or cost per action approaches, as shown below, it shows why fixed fees
and CPM models tend to be preferred by publishers.

It also shows that you need substantial traffic to make a lot of money through advertising.
At a CPM Of £10 with 2 ad units on the site, you would make just £4,000 per month even
with a million page views per month for which you serve paid ads to 20% of the audience.
Set this to 100% if you are selling all your ad inventory, for example through Google
Adsense.

To use this model and different Internet site revenue models to calculate income potential
use our online revenue model spreadsheet - see Ad Revenue model worksheet.

1.4 Level and Type of Competition -Firms Operating in the Industry

Level and type of competition

The popular view asserts that the Internet intensifies competition, but competing theories
challenge this view, indicating the need for empirical support. This research examines the
role of the Internet in changing the overall industry competition as measured by the
Herfindahl–Hirschman index (HHI), industry profitability, the new entry ratio, and the ratio
of firm number change. The results reveal significantly positive relationships between
Internet use and change in the HHI and industry profitability and significantly negative
relationships between Internet use and the new entry ratio and the ratio of firm number
change. These findings suggest that instead of increasing industry competition, Internet use
results in less competitive industry structures.

investigations into Internet strategy reveal that several firms are assisting companies in
developing so-called Internet strategies. further investigation reveals that these firms assist
companies in developing andmaintaining artistic and interesting home pages. Do home
pages constitute an Internet strategy? Perhaps abetter question to explore is how Internet
use affects competition and strategy, or if it affects it at all. Porter'smodel, which is depicted
in Exhibit 2, provides a framework for answering, predictively, this question.Bargaining
Power of BuyersIn the past, small businesses operated with a largely local population of
suppliers. In the Internet market,buyers have access to a global population of suppliers.
Small businesses have greater opportunities to searchfor products or services that offer
them the best value. Small firms may also seek to form alliances with otherfirms to
facilitate bulk purchasing or barter arrangements. Larger firms already have the advantage
ofbargaining power for buying, regardless of the Internet.Bargaining Power of
SuppliersSuppliers have strong bargaining power if they offer a product or service that is
not easily available tocustomers or if high switching costs deter customers from changing
suppliers. In the Internet marketplace,supplier power is reduced. Because buyers now have
access to suppliers worldwide, competition betweensuppliers is heightened, costs are
driven down, and product quality increases. furthermore, buyers can dohead-to-head
comparisons of suppliers quickly and easily. Currently, people looking for funeral homes on
theInternet have only one choice. Carlos A. Howard therefore has ultimate supplier power
in the cyberspacecasket market.Threat of New EntrantsThe threat of new entrants is high
in industries with low entry barriers. Industries that have low initialinvestment costs may
see new entrants on a continual basis. The Internet enables potential entrepreneurs
toefficiently seek business opportunities with low entry barriers and potentially large
markets.The recruiting market offers a good example. Many companies offer, for a fee, to
post job listings forcompanies seeking new employees. Becoming an online recruiter
requires very little capital, an Internet server,a reasonable mechanism to sort through the
jobs, and time to enter the postings (or receive them by electronicmail).Threat of Substitute
Products and ServicesIn a electronically linked environment, customers have access to an
abundance of company and productinformation. So do competitors and potential
competitors. Consequently, if a substitute product or service isintroduced, the Internet can
create massive consumer awareness and perhaps accelerate the decline of theexisting
product. By providing low-cost access to a large market, the Internet provides small firms
with greateropportunity to introduce a substitute product. However, small firms must still
compete with the advertising andmarketing clout wielded by larger companies.Intensity of
Industry RivalryOnline access to marketing and consumer data bases will increase industry
rivalries. Firms that seek to informconsumers about themselves, their products, and future
products are providing this information to theircompetitors as well. As a result, firms are
likely to carefully consider what information they will make availableon the Internet.

Firms Operating in the Industry

Amazon (AMZN): Nasdaq-listed Amazon launched in 1995 as an online bookseller and has
since diversified to become the largest U.S. Internet-based retailer of a wide swath of
products.3 In 2019, it reported $280.52 billion in revenue.4 It had a market capitalization
(market cap) of $1.38 trillion on June 30, 2020.5

Alphabet Inc. (GOOGL): The Internet search giant is the world leader in search, contextual
advertising, and other online offerings. NASDAQ-listed Google had a market cap of $964.51
billion on June 30, 2020.6 In 2019, its total revenue was $161.86 billion.7

Meta (FB), formerly Facebook: NASDAQ-listed Facebook is the world's most popular social
networking site. In Oct. 2014, it acquired WhatsApp for a whopping $19 billion and has also
made many other relatively smaller acquisitions.8 Meta reported total revenue of $70.7
billion in 2019.9 It had a market cap of $647.15 on June 30, 2020.10

Tencent Holdings: Based in China, the Hong Kong Stock Exchange-listed Tencent Holdings
isn't yet a household name outside of Asia, where it is known for its apps, online games,
advertising, and messaging services like WeChat. In 2019, its revenues stood at
approximately $56.59 billion, and it boasted a market cap of $614.68 billion on June 30,
2020.11 12 Tencent is available for trading at Nasdaq through American depositary
receipts.13
Alibaba (BABA): NYSE-listed Alibaba made headlines in 2014 when its initial public
offering (IPO) became the world's largest IPO ever.14 The Chinese e-commerce giant had a
market cap of $581.20 billion on June 30, 2020.15 In 2019, its revenue was $56.15
billion.16

Netflix (NFLX): Netflix is an entertainment company that provides video streaming

services. It has a network of over 167 million members across more than 190 countries.17
Its market cap was $200.68 billion on June 30, 2020.18 In 2019, its total revenues were
$20.16 billion.19

Salesforce.com (CRM): This giant in enterprise cloud computing and social enterprise
solutions is listed on the New York Stock Exchange. It had a market cap of $176.92 billion
on June 30, 2020.20 In 2019, its total revenues were $13.28 billion.21

JD.com (JD): Nasdaq-listed JD.com is a Chinese e-commerce company headquartered in

Beijing. It is one of the largest B2C online platforms in China and a member of the Fortune
Global 500.22 Its market cap was $93.01 billion on June 30, 2020.23 In 2019, its total
revenues were $82.865 billion.24

Booking.com (BKNG): Booking.com is the online travel company that lets users book
reservations for restaurants, hotels, rental cars, airline tickets, safaris, cruises, and other
travel services through booking.com, priceline.com, and agoda.com.25 It had a market cap
of $65.20 billion on June 30, 2020.26 In 2019, its total revenues were $15.07 billion.27

Baidu (BIDU): While Google is the world's largest online search engine, it has limited reach
in China where Baidu prevails, thanks to its ability to offer maps, news, videos, anti-virus
software, and Internet TV. It is listed in the Cayman Islands and is known to restrict search
results to comply with Chinese laws and political directives.28 Its American depository
receipt is listed on Nasdaq.29 It had a market cap of $41.32 billion on June 30, 2020, and it
boasted 2019 revenues of $15.43 billion.3031
1.5 Pricing Strategies in the Industry.

The Internet has had a dramatic effect on the distribution of tourism products. The
reintermediation which has taken place has led all distributors to implement more
dynamic pricing strategies from the widespread use of Yield Management (YM) practices to
price discount strategies. The Internet also influences the consumers' perception of pricing
strategies. Consumers are increasingly aware of YM practices and the Internet has become
the essential tool for finding the best price. However, there continues to be a certain
disconnect between the channels used for searching for the best price available and those
used by the clientele of luxury hotels in France to make their booking. Indeed, the
telephone still dominates for this type of clientele when carrying out this type of
transaction as they find it easier to use, it is entrenched in their habits and is perceived as
being more secure.

Internet Pricing

At Bayside, we realize our customers use the internet to research and check prices for what
they want to purchase because WE DO THE SAME THING.

Keeping this in mind, we want to make our buying process simple & easy to understand,
while providing fair pricing, and exceeding your expectations for service.

Our goal is for our customers to leave completely satisfied, with no frustration and HAPPY
with both their new car AND their experience at Bayside!

What we want to do is take the mystery out of WHY car prices can vary by large amounts
between dealerships, so that you understand GOING IN what your car price actually means
in real dollars.
Why the difference?

We are competing for customers wanting to visit our store. With the internet price as a
comparative tool, fewer customers are shopping at the actual dealerships - they use the
internet to collect information before they ever come see us.

Our overall strategy is to price cars very competitively, passing on the savings to our
customers, thereby selling more cars. While we make less per car, we achieve more overall
volume and a more satisfied customer. We believe this creates a WIN WIN for both
dealership & customer.

Internet Pricing Strategies vary by dealership. If you find our price is higher, it could be
because we try not to include rebates that only a small percent of customers will receive -
for example Military, College Graduate, USAA (Chevy), Farm Bureau (Chevy), and Conquest
(Chevy) - so that we are not promoting a price that our average customer cannot achieve.

Also, as with most dealerships, our prices do not include transportation charges from the
manufacturer to the dealership. We have provided a link that gives you this cost based on
model. The other costs are state taxes and tag fees, and a dealer processing charge.

We utilize fair and transparent strategies to stay competitive on the internet, without
misleading our potential customers.

Once you decide to visit our dealership, we hope you will find our in house process to be
smooth, relaxing and most of all, EFFICIENT! If you would like to be in and out of the
dealership within an hour here are a few things that will help to make that happen.

Talk, text or email our internet sales team with what vehicle you want so that we can make
sure we have what you are looking for on the lot.
We will work together to finalize a price.

You can fill out a credit application online, where we will shop 12 plus banks for the best
rate. Once approved, we will let you know what references we will need so that when you
come in, your paperwork is ready for you to sign and leave!

1.6 Industrial Perfromance Global,National and Regional basis.

Global

The publisher brings years of research experience to the 9th edition of this report. The
104-page report presents concise insights into how the pandemic has impacted production
and the buy side for 2020 and 2021. A short-term phased recovery by key geography is also
addressed.

Global Internet Services Market to Reach US$632.4 Billion by the Year 2027

Amid the COVID-19 crisis, the global market for Internet Services estimated at US$450.1
Billion in the year 2020, is projected to reach a revised size of US$632.4 Billion by 2027,
growing at a CAGR of 5% over the period 2020-2027.

The U.S. Accounts for Over 29.5% of Global Market Size in 2020, While China is Forecast to
Grow at a 4.7% CAGR for the Period of 2020-2027

The Internet Services market in the U.S. is estimated at US$132.6 Billion in the year 2020.
The country currently accounts for a 29.46% share in the global market. China, the world
second largest economy, is forecast to reach an estimated market size of US$111.7 Billion
in the year 2027 trailing a CAGR of 4.7% through 2027. Among the other noteworthy
geographic markets are Japan and Canada, each forecast to grow at 4.8% and 3.9%
respectively over the 2020-2027 period. Within Europe, Germany is forecast to grow at
approximately 4.1% CAGR while Rest of European market (as defined in the study) will
reach US$111.7 Billion by the year 2027.
Competitors identified in this market include, among others:

Accenture PLC

Amazon Web Services, Inc.

AT&T, Inc.

Atmel Corporation

Atos SA

Bosch Software Innovations GmbH

CGI Group, Inc.

Cisco Systems, Inc.

CTS Telecom Inc.

Dell EMC

Dell Technologies

Ericsson AB

General Electric Company

General Electric Company

Google LLC

Hitachi Ltd.

HP, Inc.

Huawei Technologies Co., Ltd.

IBM Corporation
Infineon Technologies AG

Infosys Ltd.

Livion Oy

Microsoft Corporation

National Instruments Corporation

NEC Corporation

Oracle Corporation

Tata Consultancy Services Ltd.

National

The global sourcing market in India continues to grow at a higher pace compared to the IT-
BPM industry. India is the leading sourcing destination across the world, accounting for
approximately 55% market share of the US$ 200-250 billion global services sourcing
business in 2019-20.

The IT industry accounted for 8% of India’s GDP in 2020. According to STPI (Software
Technology Park of India), software exports by the IT companies connected to it, stood at
Rs. 1.20 lakh crore (US$ 16.29 billion) in the first quarter of FY22.

Market Size

The IT & business service industry’s revenue was estimated at ~US$ 6.96 billion in the first
half of 2021, an increase of 6.4% YoY. The export revenue of the IT industry is estimated at
US$ 150 billion in FY21. According to Gartner estimates, IT spending in India is estimated
to reach US$ 93 billion in 2021 (7.3% YoY growth) and further increase to US$ 98.5 billion
in 2022. The BPM sector in India currently employs >1.4 million people, while IT and BPM
together have >4.5 million workers, as of FY21.
India's software services exports (excluding exports through commercial presence)
increased by 4% in FY21 compared with FY20 and are estimated at USD 133.7 billion
during 2020-21.

Indian software product industry is expected to reach US$ 100 billion by 2025. Indian
companies are focusing to invest internationally to expand global footprint and enhance
their global delivery centres. In line with this, in February 2021, Tata Consultancy Services
announced to recruit ~1,500 technology employees across the UK over the next year. The
development would build capabilities for TCS to deliver efficiently to the UK customers.

As of FY21, the IT industry employed 4.5 million people.

The data annotation market in India stood at ~ US$ 250 million in FY20, of which the US
market contributed ~ 60% to the overall value. The market is expected to reach ~ US$ 7
billion by 2030 due to accelerated domestic demand for AI.

Investments/ Developments

Indian IT's core competencies and strengths have attracted significant investment from
major countries. The computer software and hardware sector in India attracted cumulative
foreign direct investment (FDI) inflows worth US$ 74.12 billion between April 2000 and
June 2021. The sector ranked 2nd in FDI inflows as per the data released by Department
for Promotion of Industry and Internal Trade (DPIIT). Japanese investments in the Indian
IT sector grew 4X between 2016 and 2020. Investments stood at US$ 9.2 billion in the
review period.
Leading Indian IT firms like Infosys, Wipro, TCS and Tech Mahindra are diversifying their
offerings and showcasing leading ideas in blockchain and artificial intelligence to clients
using innovation hubs and research and development centres to create differentiated
offerings.

Some of the major developments in the Indian IT and ITeS sector are as follows:

In November 2021, Wipro partnered with TEOCO to build solutions for communication
service providers (CSPs) to improve network automation, efficiency, flexibility and
reliability.

In August 2021, Tata Consultancy Services was adjudged a leader in the NelsonHall NEAT
for CX Services in Banking, Financial Services and Insurance (BFSI).

In August 2021, SAP India and Microsoft announced the introduction of TechSaksham, a
collaborative skilling initiative aimed at enabling young women (from underprivileged
regions) to pursue careers in technology. 62,000 women students will be trained in
artificial intelligence (AI), cloud computing, web design and digital marketing as a result of
this collaboration.

In August 2021, Startek, a business process management company, announced a plan to

increase its minority stake in CSS Corp to reach a wider market. It also announced a plan to
recruit >2,000 employees in India, in FY22.

In July 2021, Wipro announced plans to invest US$ 1 billion over the next three years to
expand its cloud technology capabilities through acquisitions and collaborations.

In July 2021, Infosys announced that it has set up an Automotive Digital Technology and
Innovation Centre in Stuttgart, Germany. Automotive IT infrastructure professionals
stationed in Germany will transfer from Daimler AG to the new Digital Technology and
Innovation Centre as part of Infosys' relationship with Daimler.
In July 2021, TCS expanded its strategic partnership with Royal London, the largest mutual
life insurance, pensions and investment company in the UK, to help the latter transform its
pension platform estate and deliver market-leading services to members and customers.

In July 2021, Tata Technologies partnered with Stratasys, a 3D printing technology

company, to provide advanced additive manufacturing technologies to the Indian
manufacturing ecosystem.

In July 2021, Tech Mahindra Foundation and Wipro GE Healthcare have joined forced to
offer skilling and upskilling courses to students and healthcare technicians.

In July 2021, HCL announced a multi-year agreement with Fiskars Group, consisting of a
family of lifestyle brands including Fiskars, Gerber, Iittala, Royal Copenhagen, Waterford
and Wedgwood for digital transformation.

In July 2021, TCS launched Jile 5.0, a key release of its Enterprise Agile, on-the-cloud
services, planning and delivery tool that enables enterprises to meet the large-scale
development needs of multiple distributed teams

Regional

The Internet (or internet)[a] is the global system of interconnected computer networks
that uses the Internet protocol suite (TCP/IP) to communicate between networks and
devices. It is a network of networks that consists of private, public, academic, business, and
government networks of local to global scope, linked by a broad array of electronic,
wireless, and optical networking technologies. The Internet carries a vast range of
information resources and services, such as the inter-linked hypertext documents and
applications of the World Wide Web (WWW), electronic mail, telephony, and file sharing.

The origins of the Internet date back to the development of packet switching and research
commissioned by the United States Department of Defense in the 1960s to enable time-
sharing of computers.[1] The primary precursor network, the ARPANET, initially served as
a backbone for interconnection of regional academic and military networks in the 1970s.
The funding of the National Science Foundation Network as a new backbone in the 1980s,
as well as private funding for other commercial extensions, led to worldwide participation
in the development of new networking technologies, and the merger of many networks.[2]
The linking of commercial networks and enterprises by the early 1990s marked the
beginning of the transition to the modern Internet,[3] and generated a sustained
exponential growth as generations of institutional, personal, and mobile computers were
connected to the network. Although the Internet was widely used by academia in the
1980s, commercialization incorporated its services and technologies into virtually every
aspect of modern life.

Most traditional communication media, including telephony, radio, television, paper mail
and newspapers are reshaped, redefined, or even bypassed by the Internet, giving birth to
new services such as email, Internet telephony, Internet television, online music, digital
newspapers, and video streaming websites. Newspaper, book, and other print publishing
are adapting to website technology, or are reshaped into blogging, web feeds and online
news aggregators. The Internet has enabled and accelerated new forms of personal
interactions through instant messaging, Internet forums, and social networking services.
Online shopping has grown exponentially for major retailers, small businesses, and
entrepreneurs, as it enables firms to extend their "brick and mortar" presence to serve a
larger market or even sell goods and services entirely online. Business-to-business and
financial services on the Internet affect supply chains across entire industries.

The Internet has no single centralized governance in either technological implementation

or policies for access and usage; each constituent network sets its own policies.[4] The
overreaching definitions of the two principal name spaces in the Internet, the Internet
Protocol address (IP address) space and the Domain Name System (DNS), are directed by a
maintainer organization, the Internet Corporation for Assigned Names and Numbers
(ICANN). The technical underpinning and standardization of the core protocols is an
activity of the Internet Engineering Task Force (IETF), a non-profit organization of loosely
affiliated international participants that anyone may associate with by contributing
technical expertise.[5] In November 2006, the Internet was included on USA Today's list of
New Seven Wonders.[6]
1.7 prospects and Challenges in the Industry

Experts believe that internet will generate the nextindustrial revolution where human,
Machine as wellas product will communicate through large networkcalled Cyber Physical
System [1]. The fourth stageof industrialization can drive down cost of production,enhance
products quality, and increase customer sat-isfaction [2]. Industry 4.0 is a proposed high
tech.strategic 2020 action plan, a brainchild of Germangovernment. The concept of
industry 4.0 is simpli- ed and de ned by Hermann et al. [3] and Wang etal. [4] as “a
collective term for technologies and conceptof value chain organisation within the modular
struc-tured smart factories. Cyber physical systems monitorphysical processes, create a
visual copy of the physi-cal world, and make decentralised decision over the in-ternet of
things. Cyber physical system communicatesand cooperate with each other, and human in
real timevia the internet of services, both internal and cross or-ganisational services are
oered and utilised by partic-ipants of the value chain”. On the other hand,
Germanassociations of mechanical engineering, information,and communication
technology (ICT), and electricalindustry summarized Industry 4.0 as: "In the age ofIndustry
4.0 products inform machines autonomouslywhat to do with them, objects become
intelligent. Theyhave bar codes or RFID chips on them containing rel-evant information,
scanners or computers read out thedata forward it online and make sure that the
machinesact appropriately. That way, the smart objects commu-nicate. An internet of
objects and services created. Thephysical world and the virtual world merge into cyber-
physical systems” [3,5].1.1. Industry 4.0: the ProspectIndustry 4.0 is structured into three
segment: hori-zontal integration; a cross exchange of relevant infor-mation along supply
chain. A vertical integration: tocreate exible and recon gurable manufacturing sys-tem. And
end to end engineering integration across en-tire value chain to support product
customisation [6].According to Hermann et al. [3] and Wang [4] Industry4.0 may consist of
four components: (1 cyber physicalsystem; (2 Internet of things; (3 Internet of services,and
(4 smart factory. Based on those four components,Hermann et al. [3] and Saldivar et al. [7]
suggestedsix design principles that can aid scholars in investigat-ing, identifying, and
describing Industry 4.0. Based onthese components, Hermann et al. [3] and Saldivar etal.
[7] designed six principles that can aid scholars ininvestigating, identifying and describing
industry. In-dustry 4.0 requires the establishment of smart factorywith capabilities of self-
awareness, self-prediction, self-comparison, self-conlguration, and self-maintenance[5],
these aimed at achieving a high level of exibil-ity, eficiency, and quality at minimum costs.
Germanresearch centre for artificial intelligence (DFKI) re-ported that smart factory has
two features forsuccessfulimplementation: (1 Smart machines and smart prod-ucts should
know their processes and negotiate througheach other during the production process. 2) at
that sit-uation human takes a central position, becoming smartoperators, supported by
cutting-age ICT, which mon-itors and control the activities happening in the pro-cess [8].
The structure of smart factory is illustrated inFig. 1.A leading group of researchers
comprising of 6 uni-versities as well as 25 companies in Germany, reportedimmense benet
of industry 4.0, stating that: smartfactory will leads to the improvement of overall operat-
ing eficiency by 10%, reduction in safety accident, andimprovement of energy eciency by
25% [6].2. Industry 4.0: the challengesImplementing Industry 4.0 from experts’ point
ofview can be dicult because a satisfactory definition ofthe term Industry 4.0 does not exist
[3]. Other Schol-ars have expressed concern on its implementation andthe requirements
for the existing industries to partic-ipate. Also, the concern of uncertainty regarding
theimpacts of industry 4.0 on the general business struc-ture. Would the impact and benets
of industry 4.
CHAPTER 2

COMPANY PROFILE
2.1 Brief history of the oraganization and current board of
directors/oraganizatinal chart

Microsoft is an American multinational computer technology

corporation whose history started 4th April 1975. Formed by
Harvard College dropout, Bill Gates and his childhood friend Paul
Allen, Microsoft has now become the biggest software company. It is
also one of the most valuable companies in the world.

So how did Microsoft become so successful?

Microsoft is engaged in developing, licensing and supporting a range

of software products and services catering to different
requirements. In 2000 Steve Ballmer was appointed the new CEO of
Microsoft. Bill Gates had met Steve Ballmer at Harvard University
before he left. Although there was some concern over Ballmer’s
ability, Microsoft retained its top spot in both business and personal
computer markets. Microsoft’s primary strengths and most of its
profits were obtained from the business side. Although the company
recognised that they had a major presence in consumer markets as
technology advances.
The successful Altair deal back in January 1975 inspired Bill Gates
and Paul Allen to form Microsoft. Their revenues for 1975 totalled
$16,000. Microsoft’s big break was in 1980, when a partnership was
formed with IBM which resulted in Microsoft providing a crucial
operating system, DOS, for IBM PCs. This meant that for every IBM
Computer sold a royalty was paid to Microsoft. In 1990, Gates
showed the future plan for Microsoft with the introduction of
Windows 3.0. 60 million copies of Windows had been sold now
which effectively made Microsoft the sole keeper of the PC software
standard.

Microsoft before 1990 was predominantly a supplier to the

hardware manufacturers. That was their target market. As
technology advanced and personal computers become so popular,
the bulk of Microsoft’s revenue was generated from sales to
consumers. It was the first software company to reach $1 Billion in
revenues. As more and more versions of Microsoft Windows were
launched, Microsoft captured a higher market share the world’s PC
(around 90%).
Project Longhorn in 2001, saw many of Microsoft’s previous
operating systems being replaced starting with Vista. Vista was
released to the general public in 2007 and it was the new operating
system. There was many Vista options available catering for
different consumers; Home (Basic or Premium), Ultimate, Business
and many more. Microsoft’s core customers, the corporate market
preferred Windows XP as the operating system was fast, stable and
secure.

Windows 7 was released in 2009 to replace Vista which secured

Microsoft’s lead in the software market. This was followed by the
release of Windows 8 in Oct 2012 which included major changes to
its OS platform and user interface to improve user experience on
tablets. Since then Windows 8.1 has been released (October 2013)
which contained more improvements.

Microsoft also entered the gaming and mobile phone market and
was successful in capturing a large market share. The Windows
Mobile OS is used by numerous sellers including HTC, LG, Samsung
and LG. In 2001 Microsoft released the Xbox followed by Xbox Live
in 2002. Both releases were very successful which placed Microsoft
second in the video gaming market. The Xbox 360, released in 2005
was a very powerful gaming console while facing strong
competition. Microsoft had to cut the prices of their gaming consoles
to gain a higher market

share due to competition. This was a successful move; the Xbox 360
was the most used game console in American homes.

Microsoft acquired Skype in 2011 for $8.5 Billion; this was the
largest acquisition in Microsoft’s history. Microsoft acquired Skype
to compete with Apple’s Facetime and Google’s Voice. Microsoft
planned to add Skype to its products such as Outlook, Xbox and
Windows smartphones. Microsoft has also recently moved into
cloud computing with Windows Azure platform which was
announced in 2008. The Windows Azure platform lets consumers
build computing infrastructure in the “cloud” and offer it to its users.
In 2011, Office 365, a cloud version of Office business software suite
was released which included applications such as Word and
Excel.Another popular product, Microsoft’s SQL Server 2012,
featured many enhancements to previous versions. This included
Always On which provided options to improve the database
availability and easy cloud set up and compatibility. Features also
included performance and programmability enhancements. DSP-
Explorer provide support for all versions and features of Microsoft
SQL Servers, across a wide variety of windows platforms.

Current board of directors

Organizational Chart

Microsoft Organizational Structure

The latest restructuring of Microsoft organizational structure and shift to divisional

organizational structure offers the following advantages to the business:

Firstly, under the new organizational structure, heads of engineering groups directly report
to CEO Satya Nadella with positive implications on new product development initiatives
and innovation potential. This is particularly important to be able to introduce new
products and services to the marketplace in the short duration of time. Moreover, a clear
distinction between engineering groups and business functions, as illustrated in figure
above, is an indication of the technology giant ‘s focus on business directions under
engineering groups such as cloud and artificial intelligence.
Secondly, organizational restructuring eliminates bureaucracy in business processes and
procedures to a great extent, increasing the flexibility of the business to adapt to changes in
the external marketplace.

Thirdly, the initiative resulted in the elimination of approximately 7,400 positions, thus
saving considerable amount of financial resources that can be channelled for new product
development and increasing the competiveness of the business in many other ways.

Another important aspect of corporate culture at Microsoft refers to a high level of

dynamism. Specifically, the CEO of the tech giant Satya Nadella is continuing with
simplification and de-layering initiative of Microsoft operations in the global scale and
these initiatives are expected to further impact Microsoft organizational culture.

2.2 Mission/Vision statement and Quality policy followed/Quality certification

attainsd

Mission

Microsoft’s Corporate Mission Statement

Microsoft’s corporate mission is “to empower every person and every organization on the
planet to achieve more.” This mission statement shows that the business is all about
empowerment of people and organizations. Such empowerment is achieved through the
utility of the company’s computing products. The following components are significant in
Microsoft’s corporate mission statement:

The first component of the corporate mission shows what Microsoft’s products can do for
customers. For example, such empowerment can take the form of speedy data processing
in offices and enhanced information access in homes. The second component of the
company’s mission statement specifies the target market, which in this case involves all
individuals and organizations worldwide. The company’s corporate mission also specifies
that its computer technology and software products benefit customers in terms of
achieving more. Microsoft’s corporate mission statement is similar to the company’s vision
statement, considering that both statements pertain to empowerment. However, the
corporate mission statement puts more emphasis on the practical benefit of achieving
more. This benefit or value is reflected in strategies and tactics included in Microsoft’s
marketing mix or 4P.

Vision

Microsoft’s Corporate Vision Statement

Microsoft’s corporate vision is “to help people and businesses throughout the world realize
their full potential.” This vision statement shows that the company presents its business
and computing products as tools that people and business organizations can use for their
development. Microsoft’s corporate vision statement has the following components:

 People and businesses throughout the world

 Help to realize
 Full potential

The first component of the vision statement partly defines Microsoft’s target market, which
is the global market. Instead of selling software products to individual customers only, the
company also sells its products to organizations. The second component of Microsoft’s
corporate vision statement shows what the business intends to do. For example, the
company aims to provide products that assist customers toward the achievement of their
full potential, which is specified in the third component of the corporate vision. Thus,
Microsoft’s corporate vision presents the target market, what the company’s technology
products do, and what customers can achieve through such products.

Microsoft Corporation’s success as a global computer technology company is founded on

the fulfillment of its corporate mission and vision statements. The vision statement directs
the development of the business toward a desired future condition. Microsoft’s corporate
vision includes what the company can do for individual and organizational customers. On
the other hand, a company’s mission statement presents the general strategic approach to
grow the business and reach the corporate vision. Microsoft’s corporate mission specifies
what the business aims to do to empower its customers. Also in this case, the corporate
mission is strongly aligned with the vision statement. This alignment is essential to
optimize strategic decision making, especially in addressing competition with firms like
Apple, Google, and IBM. The Porter’s Five Forces analysis of Microsoft Corporation shows
that the company deals with the strong force of competitive rivalry involving these firms
and many smaller businesses that operate internationally, regionally, and locally.

Microsoft’s corporate vision and mission statements emphasize empowerment as a

value or benefit that the company’s products can provide to customers. The corporate
mission directly reflects the corporate vision of the computer hardware and software
business. This matching enables the company in developing and applying strategies and
tactics to motivate workers to achieve more, in support of business growth. This condition
also ensures value for customers, especially through the implementation of Microsoft’s
corporate culture. The company’s managerial decisions lead to strategic objectives based
on the mission statement. These objectives are similar to the points included in the vision
statement, and reflect strategic coherence in the organization, as observable in the generic
competitive strategy and intensive growth strategies of Microsoft Corporation.

Quality policy followed

Advertisers and consumers both benefit when they have positive experiences with
Microsoft Advertising. To achieve this, please follow the policies about relevance and
quality on this page. These requirements focus on four core aspects of your campaign that
affect user experience: keyword relevancy, ad copy, landing page and site user experience,
and landing page and site content quality.

How does this policy affect your ad delivery?

Advertisers with more relevant keywords and higher quality ads and landing pages are
usually rewarded with more prominent ad positions or a lower cost-per-click (CPC).

Less relevant keywords and low-quality ads and landing pages might result in less
favorable ad positions or a higher CPC.
In some cases, the ad might not appear at all. Please check the Marketplace Exclusion
section below for scenarios in which ads or sites may be completely excluded from the
marketplace.

System quality

To ensure a positive user experience, and maintain ad and network quality, we may
deactivate or delete accounts that have been inactive for over 15 months or remove non-
performing keywords and ads from our platform. We also reserve the right to limit the
number of keywords and ads that you upload or retain at any given time. In addition, we
reserve the right to restrict ads serving on keywords in the following categories:

Weapons

Adult

Pharmaceuticals

Gambling

Trademark (this does not apply to trademarks owned by the advertiser)

Keyword relevancy

Using the right techniques in choosing keywords and building ads not only drives user
engagement, but it also helps maintain the ROI of the marketplace for all advertisers.

Keywords should be relevant. This means your site should be a satisfactory destination for
users, based on a primary user intent of the keyword(s) you select.

Your keywords should relate directly to either:

The specific range of products, services, or content on your landing page.

The general content, purpose, and theme of your site.

Extremely popular or trending queries may be subject to a higher standard of relevancy
and ads must fully align with the primary user intent of the keywords/queries to
participate.

Quality certification attained

As part of our ongoing effort to deliver the broadest and deepest set of compliance
offerings, Microsoft Azure is proud to announce that we obtained the ISO 9001:2015
certification, addressing Quality Management systems.

This international standard is based on seven quality management principles:

Customer focus

Leadership commitment to quality objectives

Employee engagement in the quality goals set by leadership

Process-driven approach to achieve quality objectives

Continuous Improvement

Evidence-based decision making

Customer and partner relationship management

ISO 9001:2015 provides guidance on implementing a quality management system focused

on delivering quality products and maintaining a constant state of improvement to exceed
customer expectations. This certification (our 5th in the ISO family of certifications) is in
perfect alignment with our goal to enable customers by providing the leverage of our
compliant and quality products across a broad range of regulated industries, markets, and
regions. Achieving this certification underscores our drive to provide the most quality
product possible
2.3 Business process of the organisation-Product profile

Business process of the organisation

Certain statements in this report, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based, are
“forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements may appear throughout this
report, including without limitation, the following sections: “Business,” “Management’s
Discussion and Analysis,” and “Risk Factors.” These forward-looking statements generally
are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions. Forward-looking statements are
based on current expectations and assumptions that are subject to risks and uncertainties
which may cause actual results to differ materially from the forward-looking statements. A
detailed discussion of risks and uncertainties that could cause actual results and events to
differ materially from such forward-looking statements is included in the section titled
“Risk Factors” in our fiscal year 2013 Form 10-K. We undertake no obligation to update or
revise publicly any forward-looking statements, whether because of new information,
future events, or otherwise.

GENERAL

Microsoft was founded in 1975. Our mission is to enable people and businesses throughout
the world to realize their full potential by creating technology that transforms the way
people work, play, and communicate. We develop and market software, services, and
hardware devices that deliver new opportunities, greater convenience, and enhanced value
to people’s lives. We do business worldwide and have offices in more than 100 countries.
We generate revenue by developing, licensing, and supporting a wide range of software
products and services, by designing and selling hardware devices, and by delivering
relevant online advertising to a global customer audience. In addition to selling individual
products and services, we offer suites of products and services.

Our products include operating systems for computing devices, servers, phones, and other
intelligent devices; server applications for distributed computing environments;
productivity applications; business solution applications; desktop and server management
tools; software development tools; video games; and online advertising. We also design and
sell hardware devices including Surface RT and Surface Pro, the Xbox 360 gaming and
entertainment console, Kinect for Xbox 360, Xbox 360 accessories, and Microsoft PC
accessories.

We offer cloud-based solutions that provide customers with software, services, and content
over the Internet by way of shared computing resources located in centralized data centers.
Examples of cloud-based computing services we offer include Microsoft Office 365,
Microsoft Dynamics CRM Online, Windows Azure, Bing, Skype, Xbox LIVE, and Yammer.
Cloud revenue is earned primarily from usage fees, advertising, and subscriptions. We also
provide consulting and product and solution support services, and we train and certify
computer system integrators and developers.

We conduct research and develop advanced technologies for future software, hardware,
and services. We believe that we will continue to grow and meet our customers’ needs by
delivering a family of devices and services for individuals and businesses that empower
people around the globe at home, at work, and on the go, for the activities they value most.
We will continue to create new opportunities for partners, increase customer satisfaction,
and improve our service excellence, business efficacy, and internal processes.
Product profile

Microsoft Corporation is an American multinational technology corporation which

produces computer software, consumer electronics, personal computers, and related
services. Its best-known software products are the Microsoft Windows line of operating
systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Its
flagship hardware products are the Xbox video game consoles and the Microsoft Surface
lineup of touchscreen personal computers. Microsoft ranked No. 21 in the 2020 Fortune
500 rankings of the largest United States corporations by total revenue;[3] it was the
world’s largest software maker by revenue as of 2016.[4] It is one of the Big Five American
information technology companies, alongside Alphabet, Amazon, Apple, and Meta.

Microsoft (the word being a portmanteau of “microcomputer software”[5]) was founded

by Bill Gates and Paul Allen on April 4, 1975, to develop and sell BASIC interpreters for the
Altair 8800. It rose to dominate the personal computer operating system market with MS-
DOS in the mid-1980s, followed by Microsoft Windows. The company’s 1986 initial public
offering (IPO), and subsequent rise in its share price, created three billionaires and an
estimated 12,000 millionaires among Microsoft employees. Since the 1990s, it has
increasingly diversified from the operating system market and has made a number of
corporate acquisitions, their largest being the acquisition of LinkedIn for $26.2 billion in
December 2016,[6] followed by their acquisition of Skype Technologies for $8.5 billion in
May 2011.[7]

As of 2015, Microsoft is market-dominant in the IBM PC compatible operating system

market and the office software suite market, although it has lost the majority of the overall
operating system market to Android.[8] The company also produces a wide range of other
consumer and enterprise software for desktops, laptops, tabs, gadgets, and servers,
including Internet search (with Bing), the digital services market (through MSN), mixed
reality (HoloLens), cloud computing (Azure), and software development (Visual Studio).
Steve Ballmer replaced Gates as CEO in 2000, and later envisioned a “devices and services”
strategy.[9] This unfolded with Microsoft acquiring Danger Inc. in 2008,[10] entering the
personal computer production market for the first time in June 2012 with the launch of the
Microsoft Surface line of tablet computers, and later forming Microsoft Mobile through the
acquisition of Nokia’s devices and services division. Since Satya Nadella took over as CEO in
2014, the company has scaled back on hardware and has instead focused on cloud
computing, a move that helped the company’s shares reach its highest value since
December 1999.

Earlier dethroned by Apple in 2010, in 2018 Microsoft reclaimed its position as the most
valuable publicly traded company in the world.[13] In April 2019, Microsoft reached the
trillion-dollar market cap, becoming the third U.S. public company to be valued at over $1
trillion after Apple and Amazon respectively.[14] As of 2020, Microsoft has the third-
highest global brand valuation.

2.4 Customers of the Organization – Level of Operations

(Global/National/Regional)

Customer of the organisation

We distribute software through OEMs that pre-install our software on new PCs, tablets,
servers, smartphones, and other intelligent devices that they sell to end customers. The
largest component of the OEM business is the Windows operating system pre-installed on
computing devices. OEMs also sell hardware pre-installed with other Microsoft products,
including server and embedded operating systems and applications such as our Microsoft
Office suite. In addition to these products, we also market our services through OEMs and
service bundles such as Windows with Bing or Windows with Office 365
subscription.There are two broad categories of OEMs. The largest OEMs, many of which
operate globally, are referred to as “Direct OEMs,” as our relationship with them is
managed through a direct agreement between Microsoft and the OEM. We have
distribution agreements covering one or more of our products with virtually all of the
multinational OEMs, including Acer, ASUS, Dell, Fujitsu, HTC, Hewlett-Packard, LG, Lenovo,
Samsung, Sony, Toshiba, and with many regional and local OEMs. The second broad
category of OEMs consists of lower-volume PC manufacturers (also called “system
builders”), which source their Microsoft software for pre-installation and local
redistribution primarily through the Microsoft distributor channel rather than through a
direct agreement or relationship with Microsoft.

Many organizations that license our products and services through enterprise agreements
transact directly with us, with sales support from solution integrators, independent
software vendors, web agencies, and developers that advise organizations on licensing our
products and services (“Enterprise Agreement Direct Advisors”, or “EDAs”). Organizations
also license our products and services indirectly, primarily through license solutions
partners (“LSPs”), distributors, value-added resellers (“VARs”), OEMs, system builder
channels, and retailers. Although each type of reselling partner reaches organizations of all
sizes, LSPs are primarily engaged with large organizations, distributors resell primarily to
VARs, and VARs typically reach small-sized and medium-sized organizations. EDAs
typically are also authorized as LSPs and operate as resellers for our other licensing
programs, such as the Select Plus and Open licensing programs discussed under “Licensing
Options” below. Some of our distributors include Ingram Micro and Tech Data, and some of
our largest resellers include CDW, Dell, Insight Enterprises, and Software House
International.

Level of operations

We have operations centers that support all operations in their regions, including customer
contract and order processing, credit and collections, information processing, and vendor
management and logistics. The regional center in Ireland supports the European, Middle
Eastern, and African region; the center in Singapore supports the Japan, India, Greater
China, and Asia-Pacific region; and the centers in Fargo, North Dakota, Fort Lauderdale,
Florida, Puerto Rico, Redmond, Washington, and Reno, Nevada support Latin America and
North America. In addition to the operations centers, we also operate data centers
throughout the Americas, Europe, and Asia regions.
To serve the needs of customers around the world and to improve the quality and usability
of products in international markets, we localize many of our products to reflect local
languages and conventions. Localizing a product may require modifying the user interface,
altering dialog boxes, and translating text.

We contract most of our manufacturing activities for Xbox 360 and related games, Kinect
for Xbox 360, various retail software packaged products, Surface devices, and Microsoft PC
hardware to third parties. Our products may include some components that are available
from only one or limited sources. Our Xbox 360 console and Kinect for Xbox 360 include
key components that are supplied by a single source. The integrated central processing
unit/graphics processing unit is purchased from IBM, and the supporting embedded
dynamic random access memory chips are purchased from Taiwan Semiconductor
Manufacturing Company. Sole source suppliers also will produce key components of our
Surface devices. We generally have the ability to use other manufacturers if the current
vendor becomes unavailable or unable to meet our requirements. We generally have
multiple sources for raw materials, supplies, and components, and are often able to acquire
component parts and materials on a volume discount basis.

Global

Certain statements in this report, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based, are
“forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements may appear throughout this
report, including without limitation, the following sections: “Business,” “Management’s
Discussion and Analysis,” and “Risk Factors.” These forward-looking statements generally
are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions. Forward-looking statements are
based on current expectations and assumptions that are subject to risks and uncertainties
which may cause actual results to differ materially from the forward-looking statements. A
detailed discussion of risks and uncertainties that could cause actual results and events to
differ materially from such forward-looking statements is included in the section titled
“Risk Factors” in our fiscal year 2012 Form 10-K. We undertake no obligation to update or
revise publicly any forward-looking statements, whether because of new information,
future events, or otherwise.

BUSINESS DESCRIPTION

GENERAL

Microsoft was founded in 1975. Our mission is to enable people and businesses throughout
the world to realize their full potential by creating technology that transforms the way
people work, play, and communicate. We develop and market software, services, and
hardware that deliver new opportunities, greater convenience, and enhanced value to
people’s lives. We do business worldwide and have offices in more than 100 countries.

We generate revenue by developing, licensing, and supporting a wide range of software

products and services, by designing and selling hardware, and by delivering relevant online
advertising to a global customer audience. In addition to selling individual products and
services, we offer suites of products and services.

Our products include operating systems for personal computers (“PCs”), servers, phones,
and other intelligent devices; server applications for distributed computing environments;
productivity applications; business solution applications; desktop and server management
tools; software development tools; video games; and online advertising. We also design and
sell hardware including the Xbox 360 gaming and entertainment console, Kinect for Xbox
360, Xbox 360 accessories, and Microsoft PC hardware products.

We provide consulting and product and solution support services, and we train and certify
computer system integrators and developers. We also offer cloud-based solutions that
provide customers with software, services and content over the Internet by way of shared
computing resources located in centralized data centers. Cloud revenue is earned primarily
from usage fees and advertising.

Examples of cloud-based computing services we offer include:

Microsoft Office 365, an online suite that enables people to work from virtually anywhere
at any time with simple, familiar collaboration and communication solutions, including
Microsoft Office, Exchange, SharePoint, and Lync;

Xbox LIVE service, which enables online gaming, social networking, and access to a wide
range of video, gaming, and entertainment content;

Microsoft Dynamics CRM Online customer relationship management services for sales,
service, and marketing professionals provided through a familiar Microsoft Outlook
interface;

Bing, our Internet search engine that finds and organizes the answers people need so they
can make faster, more informed decisions;

Skype, which allows users to connect with friends, family, clients, and colleagues through a
variety of devices; and

The Azure family of platform and database services that helps developers connect
applications and services in the cloud or on premise. These services include Windows
Azure, a scalable operating system with computing, storage, hosting, and management
capabilities, and Microsoft SQL Azure, a relational database.

We also conduct research and develop advanced technologies for future software and
hardware products and services. We believe that we will continue to grow and meet our
customers’ needs by delivering compelling, new, high-value solutions through our
integrated software, hardware, and services platforms, creating new opportunities for
partners, improving customer satisfaction, and improving our service excellence, business
efficacy, and internal processes.

National

Microsoft is an American multinational computer technology corporation whose history

started 4th April 1975. Formed by Harvard College dropout, Bill Gates and his childhood
friend Paul Allen, Microsoft has now become the biggest software company. It is also one of
the most valuable companies in the world.

So how did Microsoft become so successful?

Microsoft is engaged in developing, licensing and supporting a range of software products

and services catering to different requirements. In 2000 Steve Ballmer was appointed the
new CEO of Microsoft. Bill Gates had met Steve Ballmer at Harvard University before he left.
Although there was some concern over Ballmer’s ability, Microsoft retained its top spot in
both business and personal computer markets. Microsoft’s primary strengths and most of
its profits were obtained from the business side. Although the company recognised that
they had a major presence in consumer markets as technology advances.

The successful Altair deal back in January 1975 inspired Bill Gates and Paul Allen to form
Microsoft. Their revenues for 1975 totalled $16,000. Microsoft’s big break was in 1980,
when a partnership was formed with IBM which resulted in Microsoft providing a crucial
operating system, DOS, for IBM PCs. This meant that for every IBM Computer sold a royalty
was paid to Microsoft. In 1990, Gates showed the future plan for Microsoft with the
introduction of Windows 3.0. 60 million copies of Windows had been sold now which
effectively made Microsoft the sole keeper of the PC software standard.

Microsoft before 1990 was predominantly a supplier to the hardware manufacturers. That
was their target market. As technology advanced and personal computers become so
popular, the bulk of Microsoft’s revenue was generated from sales to consumers. It was the
first software company to reach $1 Billion in revenues. As more and more versions of
Microsoft Windows were launched, Microsoft captured a higher market share the world’s
PC (around 90%).

Project Longhorn in 2001, saw many of Microsoft’s previous operating systems being
replaced starting with Vista. Vista was released to the general public in 2007 and it was the
new operating system. There was many Vista options available catering for different
consumers; Home (Basic or Premium), Ultimate, Business and many more. Microsoft’s core
customers, the corporate market preferred Windows XP as the operating system was fast,
stable and secure.

Windows 7 was released in 2009 to replace Vista which secured Microsoft’s lead in the
software market. This was followed by the release of Windows 8 in Oct 2012 which
included major changes to its OS platform and user interface to improve user experience on
tablets. Since then Windows 8.1 has been released (October 2013) which contained more
improvements.

Microsoft also entered the gaming and mobile phone market and was successful in
capturing a large market share. The Windows Mobile OS is used by numerous sellers
including HTC, LG, Samsung and LG. In 2001 Microsoft released the Xbox followed by Xbox
Live in 2002. Both releases were very successful which placed Microsoft second in the
video gaming market. The Xbox 360, released in 2005 was a very powerful gaming console
while facing strong competition. Microsoft had to cut the prices of their gaming consoles to
gain a higher market share due to competition. This was a successful move; the Xbox 360
was the most used game console in American homes.

Microsoft acquired Skype in 2011 for $8.5 Billion; this was the largest acquisition in
Microsoft’s history. Microsoft acquired Skype to compete with Apple’s Facetime and
Google’s Voice. Microsoft planned to add Skype to its products such as Outlook, Xbox and
Windows smartphones.
Microsoft has also recently moved into cloud computing with Windows Azure platform
which was announced in 2008. The Windows Azure platform lets consumers build
computing infrastructure in the “cloud” and offer it to its users. In 2011, Office 365, a cloud
version of Office365, a cloud version of Office business software suite was released which
included applications such as Word and Excel.

Another popular product, Microsoft’s SQL Server 2012, featured many enhancements to
previous versions. This included Always On which provided options to improve the
database availability and easy cloud set up and compatibility. Features also included
performance and programmability enhancements. DSP-Explorer provide support for all
versions and features of Microsoft SQL Servers, across a wide variety of windows
platforms.

Regional

Microsoft MVPs are selected based on their contributions towards a specific technology
and are not bound by location. Unlike Microsoft MVPs, Microsoft Regional Directors are
independent developers, trainers, or professionals who form a vital link between Microsoft
and the developer community.

A Regional Director typically is an expert who focuses on software development tools and
technologies, whereas a Microsoft MVP can be experts in any of the numerous Microsoft
software and services – like Windows for instance.

He/She could be an expert who contributes to a particular region, creating a powerful

impact in their technical community. RDs also provide valuable feedback to Microsoft on
emerging technologies and are invited to seminars and conferences to speak about
technologies of their expertise.

Regional Directors represent the best of the Microsoft Developer Community. While we
come together in a Microsoft program we work on all platforms and technologies. We
believe, however, in Microsoft’s commitment to the developer community and we
workdirectly with the company to help enhance their products and bring the market the
best of technology innovation.

During their 2 year term, RDs are expected to engage with the developer community as
well as Microsoft customers. This could take the form of Training, delivering talks, speaking
engagements, as well as writing books, articles, etc.

2.5 Competitors of the Company

Microsoft is the world’s 2nd most valuable public company, with a $2 trillion valuation. This
tech company based in Redmond, Washington, was founded in 1975 by Bill Gates and Paul
Allen and went public in 1986. Since its founding, Microsoft has revolutionized the
operating system (OS) market with MS-DOS and Windows.

In April 2019, Microsoft became the third public company globally to reach the $1-trillion
market cap after Apple and Amazon. It is ranked 15 th-largest public company globally on
Forbes’ Global 2000 list for 2021, with over 163,000 employees. In 2020, Microsoft
generated $153.3 billion in revenues and a profit of $51.3 billion. [1]

Microsoft offers innovative software products, including MS Windows, Microsoft Office, and
the Edge web browser. Its most expensive acquisitions include Skype for $8.5 billion and
LinkedIn for $26.2 billion.

Microsoft also offers cloud computing services via Azure, personal computers, and Xbox
game consoles. It competes with established brands like Google, Apple, and Amazon and
newcomers like VMware, Salesforce, and Mozilla. [2]
Here is an in-depth analysis of Microsoft’s top 15 competitors and alternatives:

Microsoft competes with several companies in three segments – Personal Computing,

Productivity and Business Processes, and Intelligent Cloud.

Apple

Year founded: 1976

Headquarter: Cupertino, California

Apple is one of the world’s most valuable tech brands that offer consumer devices like
iPhone, iPad, iPod, Mac, and wearables. These products compete with Microsoft’s PCs and
tablets. Apple also develops iOS, which rival Microsoft Windows. In 2020, Apple had
137,000 employees and generated $274 billion in revenues.

Apple and Microsoft are the only public companies with over $2 trillion market cap. But
Apple is more valuable than Microsoft and outperforms its rival in the smartphone and
tablet markets. Apple devices are uniquely designed and powered by iOS, the second most
popular OS globally after Windows.

Microsoft Windows powers 9 out of 10 desktops and laptops. In 2020, Apple sold 194
million iPhones and 71 million iPads. The ever-increasing popularity of Apple’s devices
makes it the top competitor for Microsoft. [3]

Sony

Year founded: 1946

Headquarter: Tokyo, Japan

Sony is a Japanese consumer electronics brand that manufactures and sells smartphones
and gaming consoles. The company’s PlayStation is the top competitor and alternative to
Microsoft’s Xbox. In 2020, Sony had over 114,000 employees and saw a 9% increase in
revenue to $82.5 billion. Its net income for the fiscal year 2020 grew 101% to $10.7 billion.
Sony and Microsoft are the top players in the gaming sector. PlayStation controls 40% of
the market, making it the second most popular player globally after Microsoft’s Xbox.

The Japanese tech giant released PlayStation 5 in Nov 2020 and sold 2.3 million units from
Apr to Jun 2021. It expects to sell 14.80 million units globally in fiscal 2021. [4]

In Jun 2021, Microsoft unveiled the latest E3 Xbox. Microsoft’s Game Pass subscription
allows gamers to access Xbox for only $70 per release. It is cheaper than Sony’s offering.
But Sony’s PlayStation is still the best alternative to Microsoft’s Xbox. [5]

Samsung

Year founded: 1938

Headquarter: Seoul, South Korea

Samsung is one of the world’s largest producers of consumer electronics, including PCs,
tablets, and smartphones. Galaxy Z Fold 2 and Microsoft’s Surface Duo are the best foldable
phones on the market. But Samsung is more specialized in consumer electronics than
Microsoft. In 2020, Samsung generated $212.3 billion in revenues with a net income of
$23.7 billion. [6]

Microsoft and Samsung have been competing for decades. In 2014, Microsoft sued Samsung
for failing to pay $6.9 million in interest on its $1 billion in patent royalties. The South
Korean tech giant will release the next Galaxy Z model in the second half of 2021.

The new Galaxy Z Flip 3 and Galaxy Z Fold 3 will have the first-ever S Pen design and cost
$2,200 for Fold and $1,200 for Flip. Both will debut at a lower cost than previous models
and can poach Surface Duo’s users. Samsung is one of Microsoft’s top competitors in
personal computing
Mozilla

Year founded: 1998

Mountain View, California

Mozilla is a tech company that develops open-source software products, including web
browsers, bug tracking systems, and other Internet-related apps. It operates a non-profit
organization, which works with a global community of open-source developers.

But Mozilla also engages in business for profit with more than 1000 employees. It
generates around $450 million in revenues annually.

Mozilla’s web browser Firefox is one of the top competitors for Microsoft Edge. In June
2021, Firefox had a market share of 6% in the US, while Microsoft’s Edge had an 11.77%
share. But they lag behind Chrome and Safari.

Firefox is the second most popular browser in Europe with a 12% market share, behind
Chrome. Mozilla Firefox is a worthy competitor for Microsoft Edge. [8]

Logitech International

Year founded: 1981

Headquarter: Lausanne, Switzerland

Logitech is the world’s leading manufacturer of computer accessories, including keyboards,

mice, webcams, Bluetooth speakers, and more. Microsoft also develops and sells these
products, making this Swiss company one of its top competitors. Logitech has around 7,000
employees.

Logitech has seen a significant increase in demand in the past two years. Its sales surged
7% to $2.98 billion in the fiscal year ended in Apr 2020. For fiscal 2021, Logitech’s global
revenue increased by 76% to $5.25 billion. Its 2021 revenue was the highest ever in the
company’s 29 years history. Logitech’s experience and ever-growing earnings make it a
worthy competitor for Microsoft. [9]Microsoft’s Competitors and Alternatives in
Productivity and Business Processes Microsoft’s productivity and business processes
segment include Microsoft 365, LinkedIn, and other enterprise solutions.

Google

Year founded: 1996

Headquarter: Mountain View, California

Google is the pioneer in Internet services. For nearly 25 years, Google has evolved and
expanded to become one of the most iconic tech companies of the 21 st century. In 2020,
Google had around 119,000 employees and generated $160.7 billion in revenues.

Google has a diversified portfolio and competes with Microsoft across the board. It is the
leading search engine, followed by Microsoft Bing. Google Chrome competes with Microsoft
Edge, GCP vs. Microsoft Azure, and Microsoft 365 vs. Google Workspace.

Both Google Workspace and MS 365 offer tons of apps and features, but Google’s product is
cheaper. Google Workspace plans cost between $6 and $18 per user per month, while the
pricing for Microsoft 365 plans ranges from $5 to $57 per user per month. Google competes
with Microsoft in all three segments. [10]

IBM

Year founded: 1911

Headquarter: Armonk, New York

IBM is one of the oldest software developers globally. In 1980, IMB relied on Microsoft’s OS
to power one of its first personal computers. The history of the two companies has
intertwined ever since. In 2020, IBM had over 350,000 employees and generated $73.6
billion in revenues. But its revenue has been declining in the past three years.

Like Microsoft, IBM evolved from software development to consulting and IT service
providers for businesses. It provides enterprise-level process automation, data recovery,
networking, and digital transformation solutions.
Today, IBM serves 47 of the Fortune 50 companies. The tech giant also offers cloud
services, but it controls less than 2% of the IaaS public cloud market share. With over 100
years in the sector, IBM is the most experienced Microsoft competitor

Cisco

Year founded: 1984

Headquarter: San José, California

Cisco is a tech company that develops and sells networking and telecommunications
hardware and software. It also provides IT services and solutions to help businesses
streamline their processes and enhance productivity.

The company has 76,000 employees, about half Microsoft’s workforce. For full-year 2020,
Cisco’s revenue was $49.3 billion with a net income of $11.21 billion.

Cisco’s software products for business include automation, analytics, and security
solutions. They overlap and compete with Microsoft’s Office and cloud-based offerings for
enterprises. In the first half of 2021, software subscriptions accounted for 81% of Cisco’s
total software revenue.

With an ARR of over $14 billion, Cisco is now one of the largest software providers in the
industry. The tech giant also plans to acquire Sedona Systems and Socio Labs in 2021 to
bolster Webex Events. These acquisitions will increase Cisco’s competitive edge over
Microsoft

VMware

Year founded: 1998

Headquarter: Palo Alto, California

VMware is a tech company specializing in cloud computing and virtualization technology.

The company has over 24,000 employees and operates from 125 locations spread across
the world.
For the full year 2020, VMware’s revenue increased 9% to $11.8 billion with a 44% surge
in SaaS and subscription sales. The company’s subscription now delivers more revenue
than its on-premises license.

The company offers solutions that help businesses boost efficiency and productivity with
no tech assistance. VMware also provides a scalable Remote Work Solutions to help
organizations manage their remote teams. Companies can use VMware Workspace One to
access productivity tools.

Dell controls 81% of VMware, which has benefited VMware for years. But Dell seeks a spin-
off of its equity ownership in VMware by Sept 2021. Losing Dell’s backing can undercut
VMware’s competitive edge over Microsoft.

SAP SE

Year founded: 1972

Headquarter: Walldorf, Baden-Wü rttemberg, Germany

SAP is one of the most valuable tech companies globally, with a brand value of $57.58
billion. It offers ERP software that helps businesses manage their operations and customer
relations. In 202, SAP had over 102,000 employees and generated $32 billion in revenues
with a net income of $6 billion. [14]

SAP’s ERP competes with Microsoft Dynamics 365 in the business services market. It is
cheaper than Dynamics 365 and allows businesses to build customized systems with
advanced features.

The platform also integrates with third-party apps and offers a quicker launch time than
Dynamics 365. In 2015, SAP launched S/4HANA that provides advanced data analytics and
support for cloud deployment. SAP is the best alternative to Microsoft Dynamics.
Salesforce

Year founded: 1999

Headquarter: San Francisco, California

Salesforce is a global leader in customer relationship management (CRM) services. Its

industry-leading CRM software automates business processes, including sales and
marketing. Salesforce overtook Microsoft in 2019 and now controls 18.4% of the global
public cloud SaaS market.

Salesforce has more than 60,000 employees and around 150,000 developers and
organizations on its integrated platform. In 2020, Salesforce generated $21.25 billion in
revenues – 34% from its Sales Cloud and 15% from Marketing Cloud.

Its Service Cloud business contributes 30% of total revenue. Salesforce is a specialist in
CRM and the best alternative to Microsoft.

Red Hat

Year founded: 1993

Headquarter: Raleigh, North Carolina

Red Hat is a leading provider of open-source solutions for business, including Linux. In
2018, IBM acquired Red Hat for $34 billion and now operates as IBM’s subsidiary. Red
Hat’s revenue increased 18% in 2020 and contributed 5% of IBM’s $73.6 billion revenue.

Microsoft has waged war against open-source software for decades, with Red Hat as its
primary target. But the ever-increasing popularity of Red Hat’s Linux prompted Microsoft
to soften its stance.

Most cloud technologies are based on Linux, which gives Red Hat a significant advantage
over Microsoft. As a subsidiary of IBM, Red Hat has enough resources to challenge
Microsoft’s dominance in the cloud networking market. [17]Microsoft’s Competitors and
Alternatives in Intelligent Cloud
Microsoft Azure is the second most popular cloud computing platform, with 17% of the
market. It serves more than 5 million organizations and competes with AWS, Alibaba Cloud,
Google Cloud Platform, and Oracle Cloud in the enterprise cloud market.

Amazon Web Service (AWS)

Year founded: 2006

Headquarter: Cupertino, California

AWS is the global leader in public cloud services, with 77 availability zones across 245
countries. It is a subsidiary of e-commerce giant Amazon and provides computing,
database, analytics tools, and storage services for businesses.

AWS controls 32.4% of the global cloud market, but Microsoft is the world’s largest
enterprise cloud vendor. Azure delivers $14.3 billion per quarter, while AWS makes around
$10.8 billion in quarterly revenues.

With more than 175 fully featured services, AWS is the most comprehensive cloud platform
globally. Amazon Web Service is Azure’s top competitor and alternative.

Oracle Cloud

Year founded: 1977

Headquarter: Redwood City, California

Oracle Cloud is one of the leading enterprise public cloud platforms globally. It allows
businesses to manage, store, and leverage their data and competes with Microsoft Azure.
This cloud service is a subsidiary of Oracle, which employs around 136,000 people
worldwide.

Oracle’s revenue for the fiscal year ended May 2021 was $40.5 billion, a 3.61% increase
from 2020.

Oracle Cloud Platform is ranked sixth in the enterprise public cloud niche and controls 10%
of the market. But the company’s revenue growth is lower than Microsoft.
Its revenue increased by only 2% for nine months between May 2020 and Feb 2021, while
Azure reported double-digit growth for several quarters. Oracle Cloud offers highly
scalable and reliable cloud computing solutions, making it one of the best alternatives to
Microsoft Azure

Alibaba Cloud

Year founded: 2010

Headquarter: Redmond, Washington

Alibaba Cloud is a subsidiary of Alibaba Group, a Chinese e-commerce giant. It is the third-
largest cloud service provider globally, with around a 7% market share.

The main advantage for Alibaba Cloud is its dominance of the Asian market. It is giving
Azure a run for its money in Asia. Alibaba Cloud uses Cloud Enterprise Network (CEN) for
customers to control the latency and bandwidth of multi-regional applications.

This functionality makes Alibaba Cloud one of the best alternatives to Microsoft Azure for
multinational corporations

2.6 Strategies – Business, Pricing, Management

Business ststrategies

By John Dudovskiy

January 29, 2019

Microsoft Business StrategyMicrosoft business strategy integrates the following 3

elements:

1. “Cloud-first, mobile-first”. Intelligent cloud represents one of the solid sources of

Microsoft competitive advantage and Microsoft business strategy places a great
emphasis on cloud segment of the business. ‘Mobile first’ part of this strategy stands
for the mobility of experiences[1] and the technology giant pays a due attention to
this direction as well. Nadella’s bet on cloud has paid off handsomely. By October
 2018, Microsoft surprised Amazon in 12-month cloud revenues. Specifically, while
Microsoft earned USD 26,7 billion revenues, Amazon’s revenues totalled to only USD
23,4 billion for the same period.[2]

2. Growing through mergers and acquisitions. Mergers and acquisitions play an

important role in Microsoft business strategy and the multinational technology
company engages in mergers and acquisitions to increase its capabilities, product
range and value offering. The list of the most notable recent acquisitions include
Nokia Corporation’s Devices and Services business for USD 9.4 billion in 2014 and
Mojang Synergies AB the Swedish video game developer of the Minecraft gaming
franchise, for USD 2.5 billion.[3]

Moreover, in June 2016, Microsoft acquired LinkedIn for USD 196 per share in an all-cash
transaction valued at USD 26.2 billion.[4] This particular acquisition plays an instrumental
role to connect the world’s professional cloud and the world’s professional network –
creating new experiences and new value for business users. With more than 1.2 billion
Office users and 433 million LinkedIn members, the combined data graphs is expected to
improve how Sales, HR, and other professionals get work done.[5] In 2018 alone, Microsoft
completed 16 acquisitions of companies ranging from video games producers to artificial
intelligence to employee engagement.

3. Focusing on augmented and virtual reality (VR). CEO Satya Nadella has placed
augmented and virtual reality at the core of Microsoft business strategy. It has been
noted that “while a majority of the augmented and virtual reality players are focused
on consumer gaming, Microsoft has spent considerable time and effort defining the
potential business use cases for HoloLens”[6]. Moreover, Microsoft has been able to
demonstrate how VR could be usedto improve the shopping experience, in
 education and automotive design. It can be argued that leadership in augmented
and virtual reality in the global scale can become one of the solid sources of
Microsoft competitive advantage, similar to its leadership in cloud segment, with
positive implications on long-term perspective.

4. Promoting ‘Tech Intensity’. Focus on ‘tech intensity’ can be mentioned as a recent

addition to the business strategy of Microsoft. The term ‘tech intensity’ can be
described as “a fusion of cultural mindset and business processes that rewards the
development and propagation of digital capabilities that create end-to-end digital
feedback loops, tear down data silos and unleash information flows to trigger
insights and predictions, automated workflows and intelligent services.”[7]

At the same time, it has been noted that “as encouraging as the buzzword “tech intensity”
sounds, it is not about empowering others for the sake of its own advancement.”[8] Instead,
the actual and ultimate goal behind company’s ‘tech intensity’ idea is to make Azure
world’s computer, by adding increasing numbers of companies into this platform.

Pricing strategies

The BackOffice Small Business Server (SBS)

Costs about Rs 45,000 for a five-user license. Additional client access licenses are

Available in packs of five and will cost Rs 9,000 per pack. Maximum users possible are 25.

NT Server 4.0 is priced at Rs 25,000 for a

Five-user license, and for each subsequent user license you will have to pay about Rs

1,000. All other goodies-SQL server, Exchange server etc. are separately priced.

While SBS and NT 4.0 starts with a minimum of five users, NT Enterprise Edition license
Starts with 25 users. This license for 25 users will set you back by about Rs 1,20,000.

Additional user licenses cost the same as that for NT server 4.0.

The pricing of Microsoft products, like

That for the offerings of other IT vendors, is linked to the prevailing Rupee-Dollar

Exchange rate. The pricing that you get is also dependent on the total value of MS

Products that you are buying. There is a fairly simple point system which determines the

Pricing you get. According to TS Krishnan, Director (Enterprise Customer Unit), Microsoft

India, this is an open system, and the details are provided to all customers. So, next

Time you buy Microsoft products, ask for the Microsoft Open Licensing Program (MOLP).
You

May get a better deal!

Microsoft offers four-volume pricing

Policies, A through D under MOLP. Each policy has different discount levels and support

Options. Microsoft has kept these policies flexible. MOLP works like this: Points are

Gained for each tool, application, or client that you wish to purchase and the total

Points earned determine the pricing policy that you become eligible

e.g. NT Server is worth 15 points and

Each additional client license is one point. Microsoft Office is worth two points. Project

Gets you one. If you buy software worth 20 to 200 points, you qualify for A-level pricing.

Above 200 and up to a thousand points qualifies you for B. Above one thousand and up to

Two thousand is C, and above that is D. So, if you want to purchase one NT Server with

1000 additional clients then you accumulate 1015 points, which makes you eligible for

Policy C pricing.
Management Strategies

Over a billion people use Microsoft services and products for both business and personal
use. With its continuously evolving offerings, the company ended the year 2018 as the
world’s most valuable company. There is a pool of companies that have brought major
transformations in the world, but it is hard to find a company that has such an influential
global impact like Microsoft. Several companies today use Windows and other Microsoft
software in their routine official space.

This leading global vendor of computer software is headquartered at Redmond,

Washington and has offices in over 60 countries.

In recent years, the company has accomplished innovation and assist customers to navigate
their businesses’ digital transformation. Microsoft works with a mission to empower every
individual and every organization on the earth to achieve more. The company’s business
model relied on its customers’ and partners’ success. The company works towards creating
local economic opportunities in every community enabling people to unleash the power of
technology to address major challenges.

Comprehensive Products Revolutionising Services Across Globe

The company has made an incredible impression through its technologies on people and
companies across the globe. Microsoft’s ecosystem impacts a billion lives every single day
by creating new opportunities for its customers and partners.

In Kenya, Microsoft’s partner M-KOPA Solar has connected thousands of homes across sub-
Saharan Africa to solar power using the Microsoft Cloud. The company has innovated the
service through a pay-as-you-go model that helps households living on less than US$2 per
day establish a credit history.

In Arizona, Microsoft is applying Dynamic 365 to improve results among the most
vulnerable population of the region. Additionally, in Poland, MedApp is employing
HoloLens to enable cardiologists to visualize patients’ hearts as it beats – in real-time. It
consequently reduces the time consumed in the whole open-heart surgery process.
Jack’s Diving Locker in Hawaii is using Microsoft 365 to link its 50 employees across land
and sea to focus on their strength and protect pristine coral reefs and take people diving.

Around the world, from iconic brands to small manufacturers are using Microsoft’s
technology to build their own digital capability to thrive. Notably, the world’s biggest
company by revenue Walmart and its private employer deploy Azure and Microsoft 365 to
empower its digital transformation while transfiguring the shopping experience for
customers.

2.7 CSR Activities

Microsoft corporate social responsibility (CSR) is guided by the citizenship mission of the
company which is “to serve globally the needs of communities and fulfil our responsibilities
to the public”. Moreover, charitable activities of Bill & Melinda Gates Foundation founded
by Microsoft founder Bill Gates is also associated with Microsoft in the perception of the
general public to a certain extent.

The technology giant won a number of awards and achievements for its responsible
behaviour. These include ranking #1 on Corporate Responsibility Magazine’s 100 Best
Corporate Citizens 2018, ranking #1 for both, Environment and Social Score which
measures corporate performance using more than 200 factors. Moreover, Microsoft’s
behavior as a socially responsible company has earned number 2 spot on JUST Capital’s
Top 10 Tech Companies.

In today’s world, businesses are increasingly expected to be accountable for how their
practices impact society and the environment. Corporate social responsibility (CSR) is no
longer just a respected business practice, but a consumer-driven demand. But what is
corporate social responsibility?

CSR defines the business model and degree of responsibility companies should maintain in
order to have a positive impact on the world. The CSR model outlines how a company can
be accountable to itself, its staff, its stakeholders, the public and global and local
environments.
Implementing a CSR model does more than just help the environment and society, it also
has a positive impact on a business’ reputation. As people are becoming more socially
conscious, they are choosing to prioritise businesses that are focused on social
responsibility. CSR practices also help boost employee morale as employees and employers
gain a greater sense of purpose in their work.

Understanding the appropriate ways to implement a CSR model has become vital for
anyone wishing to work in business.

2.8 Export / Import

Export

Microsoft products and solutions are available broadly in a large number of countries
throughout the world. Although Microsoft cannot provide advice on export matters, you
will find on this Web site information you may need in order export Microsoft products.

Microsoft attests that the following ECCN data is accurate and complete and interested
parties are entitled to rely upon such representations.

Learn more about exporting basics:

Exporting Overview

Frequently Asked Questions

Mass Market

Microsoft Office is a Mass Market software suite product and it can be exported without
license (NLR – no license required) to non-embargoed countries without restrictions.

Microsoft Office has traditionally bundled a number of applications such as Word, Excel,
PowerPoint, and Outlook. Other applications such as Access, Project, Publisher, and
InfoPath, or server applications such as SharePoint, Project Server, Groove and Forms
Server have also been part of the Office suite.
The 5D992.c Mass Market classification applies to the entire software suite as well as its
client and server applications taken individually.

Microsoft Office client and server applications do not implement their own cryptography
but they make use of the cryptography algorithms and protocols provided by the operating
system for their security features.

The following ECCN classifications and CCATS registration cover for all versions and
editions, including upgrades and services packs of the Microsoft Office applications suite.:
Import

import tables, queries, forms, reports, macros, or modules from one Access database into
your current database. When you import an object, Access creates a copy of the object in
the current database.

You import database objects when you need to do either of the following tasks:

Copy the design and layout of a form, a report or other object from a different Access
database into your current database as a quick way to create a new form, report or other
object.

Copy the latest version of a form, report, or other object from a different Access database
into your current database at regular intervals. To do this, you can create an import
specification the first time you import the object, and then use the specification to repeat
the operation later.

Note that importing an object from a different Access database into the current database
differs very little from opening a second database and then exporting the object from the
first. The two main differences between importing and exporting objects between Access
databases are:

We can import multiple objects in a single operation, but you cannot export multiple
objects in a single operation. If you want to export multiple objects to another database, it
is easier to open the destination database and then perform an import operation from
within that database.
In addition to database objects, you can import relationships between tables, plus any
import and export specifications, and menu bars and toolbars. You can also import a query
as a table. Exporting does not offer you these options.

2.9 Collaborations & Expansion Plans

Collaborations plan

What is collaboration?

Collaboration is working together on a shared project or goal. Use collaboration tools for
business to easily create and edit content with your team.

Features of collaboration

Share files, co-author and edit content simultaneously, automatically save everyone’s
changes, communicate in real-time, ideate in the Whiteboard app, work together in
channels, and more.

Benefits of collaboration

Work effectively together: improve productivity, save time, and accomplish more. Break
down silos and bring your team together, keeping everyone in the loop and ensuring
everyone has a voice.

the latest collaboration tools for business

Managing dispersed teams can be a challenge. Bring people together and empower them to
get more done with Microsoft Teams.

Stay connected with family and friends with collaboration tools in Microsoft Teams

Spend less time coordinating and more time together. From book club to birthday parties,
it’s easier to make plans, assign duties, and stay organized.

At Microsoft, we’re transforming how our employees work together. Our vision for
seamless teamwork is using Microsoft 365 to create productive, aligned teams and engage
employees with leadership and the organization. We’re helping our employees be
productive in all work activities with empowered, self-service enterprise collaboration.
As our digital transformation continues, Microsoft Core Services Engineering and
Operations (CSEO) is focusing on improving the experiences of all Microsoft employees and
partners. The Seamless Teamwork investment focuses on how our employees connect and
collaborate with each other, with the teams to which they belong, and with Microsoft’s
mission, values, and culture. We’re transforming how teams work together, which not only
empowers our employees but also embeds agility in our organization that strengthens
business continuity and helps our employees remain connected and informed while
working remotely. Our vision illustrates for our customers how Microsoft 365 can help
large enterprises make a similar transformation and realize its benefits.

The Seamless Teamwork investment is part of a broader vision for providing the most
productive employee experience possible as we continue our digital transformation. To
learn more about how Microsoft is achieving this vision, refer to Reinventing the employee
experience at Microsoft.

Expansion plans

Microsoft Corp. is planning a number of moves to increase and potentially consolidate its
development activities in India, according to company officials and sources.

Microsoft is increasing the number of employees at its software development center in

Hyderabad in the South India state of Andhra Pradesh from 200 to about 500 by 2005,
according to a company spokeswoman.

This year, the company is also increasing the head count at another center in Hyderabad
that handles application development for Microsoft’s in-house IT requirements. That center
currently employs about 125. Details about the number being added this year weren’t
available, though it is likely to be another 125, according to informed sources.

“We are taking both these operations and combining them at a single facility at Manikonda
near Hyderabad,” said the spokeswoman, who declined to be named.
Microsoft announced last year that it had entered into a memorandum of understanding
with the government of Andhra Pradesh to acquire 42.5 acres of land for a facility in
Manikonda. Construction of the facility is set for completion by the end of this year. The
company currently uses leased facilities.

The news that Microsoft is moving into its own large facility in Hyderabad sparked protest
from the Seattle-based Washington Alliance of Technology Workers (WashTech).

“Microsoft expanding in India means that workers in Redmond will face direct competition
from workers that make a fraction of their wages,” said Marcus Courtney, president of
WashTech. “This will only lower wages and benefits for Microsoft U.S.-based employees.
The work that Microsoft is getting done in R&D in India can be done in this country.”

Microsoft, however, counters that Redmond will continue to be its development hub. “Ours
is a centralized development model, and we don’t see the staff in India growing into
thousands,” the spokeswoman said. “We invested in a parcel of land that will allow us
options and flexibility for future growth. While we do not yet understand how large our
presence will be in the future, it made good business sense to buy this parcel now should
we need it in the future.”

Taking a cue from a number of multinational tech companies, Microsoft has also set up a
support center in Bangalore. Called the Global Technology Support Center, the operation
offers voice- and e-mail-based tech support to Microsoft customers worldwide.

“We have this strategy to follow the sun to offer round-the-clock support, and hence a
support center in India made sense,” the spokeswoman said. The center currently employs
about 250 staff; Microsoft has no immediate plans to increase the number of staff there.

Microsoft also outsources software development and some tech support and call center
work to Indian companies. Microsoft’s own operations and partners together account for
about 900 to 1,000 staffers, the spokeswoman said. But the numbers at contractors’
facilities could be far more than the company reports, running into thousands, according to
Courtney. Outsourcing companies doing work for Microsoft are tied in by nondisclosure
agreements.

Microsoft’s Hyderabad software development

center, which opened in 1998, has created a number of technologies and products,
including Services for Unix, which enables customers to integrate Windows into their Unix
environments, and Visual J# .Net, a Java language development environment for targeting
the .Net platform.

The center announced last year that it is expanding its product development portfolio, and
as a step in this direction created a Windows Server Technologies Group. The development
center is also setting up a Networking Competency Center to work on various networking
projects. A Developer Division Group focuses on developer tools, while an Enterprise
Storage Group works on tools and technologies in the area of storage.

The Mail Group, which handles connectors from Outlook, is also at the center.

2.10 SWOT Analysis of the Company

Introduction

The recent announcement of the change of leadership at the helm of Microsoft has sparked
speculation about possible strategic directional changes as well as kindled hopes that the
pioneering company and its iconic founder who appeared to be floundering in recent years
may well be getting their act together. The ensuing SWOT Analysis places these strategic
moves in perspective and appraises the situation, which the company finds itself in at the
moment. The succeeding discussion must be viewed in the larger context of the match
between the internal dynamics and the external business drivers that affect Microsoft in its
quest to regain its market leadership.

Strengths

The biggest strength of Microsoft is that it has top of the mind brand recall among all the PC
(personal computer) users in the world. Indeed, Microsoft and its legendary founder, Bill
Gates, are known to anyone who is remotely acquainted with computing. This has enabled
the company to forge ahead of its rivals even though as we shall discuss later, in recent
years, some of the sheen of the Microsoft brand has been lost.

The other strength and a key driver of its business and readymade acceptance by the users
of its products is that Microsoft’s software is easy to use which has won it an increasing
base of customers around the world. It can also be said that Microsoft and Bill Gates have
spawned what can be called a “Second Industrial Revolution” by making computing
available to the masses.

The company has a worldwide network of distributors and also it indulges in co-branding
with hardware makers of computers, which enables it to have strategic depth and a
breadth of user base that is unparalleled.

Microsoft has consistently beat analyst expectations in terms of profitability and revenues
though it is appearing to be vulnerable to shifting trends like mobile computing in recent
years.

Weaknesses

The biggest weakness of Microsoft is that its fabled team did not anticipate the emergence
of the internet as a phenomenon that would take over the world in addition to reading the
market signals about mobile computing. In case of the former (internet), Microsoft was
slow to respond and even when it did, it was in a manner that attracted monopolistic
charges which in earlier years were the mainstay of the company.

As for mobile computing, Microsoft completely missed this wave and indeed, the success of
the other computing revolutionary, Late Steve Jobs and his Apple Company appeared to
blindside Microsoft and Bill Gates so much that it has even now failed to come up with a
compelling Smartphone device or operating system.

The third weakness relates to the ubiquitous security flaws in its software, which is
apparent to any windows user, and chances are that you would have probably encountered
the familiar crashes of Windows no matter which version you use.

Opportunities
Though Microsoft failed to read the emergence of the internet and was completely taken
aback by the mobile wave, a ray of hope that is still visible to the company is in the cloud-
computing paradigm, which the company is betting big to take on the competition and
regain its leadership position.

Indeed, the recent appointment of the Indian born Satya Nadella as the CEO is in line with
its aggressive push towards cloud computing as the game changer for the company and
since Nadella is thought to be a cloud-computing wizard, it is understood that Microsoft is
banking on him for it to ride the next wave.

The company has a huge cash hoard which means that if it cannot grow organically
(through normal growth) it can still grow inorganically (through acquisitions) of smaller
companies that have good business prospects.

This is the manner in which Bill Gates made amends for misreading the internet and
bought out Hotmail created by another Indian, Sameer Bhatia that did give Microsoft some
edge for a few years before Google revolutionized personal email products.

Threats

As can be inferred from the analysis so far, Microsoft’s biggest threat is that it’s very size
which is an asset otherwise is preventing it from being quick and nimble and seize market
opportunities by proactively reading market signals.

Further, Microsoft faces a key challenge from Open Source software, which was a force to
reckon with initially seemed to have lost some of its fizz though it is making a comeback
again.

On the commercial front, Microsoft has been exasperated with software piracy especially in
Asia where the pirated copies are more than the original products in China and India.

Finally, Microsoft has to be both weary and wary of potential lawsuits especially in Europe
where the regulators are not taking kindly to its monopolistic business practices.

Conclusion
The preceding analysis has made it clear that Microsoft cannot afford to misread emerging
trends and changing customer preferences anymore. Instead, it must be in a position where
it senses and intuits market moves and prepares to act accordingly. A possible strategic
move would be to focus more on the enterprise segment since most other technology
companies seem to be focusing exclusively on the personal customer segment. In
conclusion, it remains to be seen as to how the recent leadership changes play themselves
out with regards to the future strategic moves by the company.