Wednesday, June 5, 2013

Microsoft Prepares to War with Competition


In Bloomberg news this week, Microsoft is scheduled to restructure their software development company. Microsoft realizes that their competition (Apple and Google) are dominating the mobile phone market, and adjustments need to be made in order to maintain pace in this technological environment. Microsoft understands that current trends predict the market, and they’re now realigning their infrastructure to focus on warfare with the competition. Microsoft is placing more focus and attention on divisions that have the potential to deliver future growth for the company.

In comparison, the executives in the McKinsey Quarterly ask the question, what will be the most important trends for global business? The response was “obtaining information and developing knowledge”.  Microsoft is now doing just that, they are developing a strategy to be the leader in web based cloud computing.

It seems as if shareholders want the company to focus their attention on cloud services says one investor group ValueAct Holdings LP.  If Microsoft does not adapt and strategize sooner the company may find itself trying to catch up with the competitors in this rapidly changing market.
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Microsoft is in dire need of repositioning itself in order to remain relevant in the devices and services market. Many companies are going away from using Microsoft as its server such as the likes of HTC and HP. Many commentators say it’s too late in the game even though Microsoft has made new investments in Skype, Nook, and Xbox. All of these investments are great, but they cannot replace Microsoft’s PC market lost. One thing is certain, Microsoft has to act fast or the market will shift in the other direction.

I would invest in Microsoft because windows are what make them relevant despite many negative reactions. Majority of the public still uses the Microsoft software, even apple users. As a college student, it’s a requirement from Professors to use Microsoft’s Word and PowerPoint. I recommend that Microsoft continue focusing on its gaming system Xbox, because there is only one competitor in that market, Sony PlayStation. Microsoft should also develop a similar platform for Xbox, to build a new cell phone for gamers and utilize special features. An example would be having the opportunity to access your gaming device remotely. Also, increasing market share in Skype, and redesigning the likes of Nook to make the device more attractive to users would be beneficial. Lastly, I recommend that Microsoft sell their assets that are designated dogs and continue to invest in development of those stars and cash cows, and create distance from the question marks.

Now, what are your thoughts about investing in Microsoft’s future?

References:
Bass, Dina. "Microsoft's Ballmer Said to Plan Broad Restructuring." Bloomberg. Bloomberg L.P, 04 June 2013. Web. 05 June 2013.
Hartung, Adam. "Microsoft Reorganizes Itself." Forbes. Forbes Magazine, 05 June 2013. Web. 05 June 2013.
Dyer, Mitch. "Microsoft's Fortunes at E3 2013." IGN. IGN, 03 June 2013. Web. 05 June 2013.

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