write a detail summary on case study

Microsoft: A Case Study on Microsofts Competitive Practices and Business Strategy

Introduction: Microsoft, one of the top software companies to emerge during the information age, continues to fight a long, drawn-out antitrust battle with European Union (EU) regulators. Microsoft settled part of its antitrust case with the United States Department of Justice (DOJ) and 20 state attorneys general in 2004; the company is still under oversight by the Department of Justice until 2009. Observers note that maybe the EU can obtain just concessions from the company that the U.S. DOJ could not and has not. More recently, The [EU] Commission hit Microsoft with a $781m (497m euros) fi ne and again, later, with a fi ne of $440m (280.5m euros) for non compliance after Microsoft lost an appeal against the fi rst fi ne. The February fine covers the period of non compliance since the second fi ne through to October 21, 2007. Microsoft has appealed. (The Register, July 7, 2008). The venerable software giant is at another critical turning point in its development: it has to either adapt to the changing new global technology environment where collaborative open-source software such as Linux play and team with the likes of Google, or continue to be hounded and fi ned by the EU. It appears Microsoft may be cautiously opening up. The company has begun to make changes to its current business model, embracing radical, innovative new thinking, incorporating other companies and technologies into its domains, and pursuing Yahoo! to better position itself in the search business. It has also joined a handful of U.S. companies who wish to dominate the market for cloud computinga domain that incorporates central processing to replace desktops, and that . . . involves the centralized storage and processing of informationa shift that could reduce the role of desktop computers and the servers and other equipment run by many companies . . . . With regard to business ethics, a major question about Microsoft remains: will the approaches the company takes involve or attempt to dominate and control competitors? The Road Less Traveled Microsoft has focused primarily on product development since January 2005, making acquisitions of complementary businesses (or potential future rivals) along the way. Its chief adversary over the last year and a half has been the European Union, which issued its original antitrust ruling in March 2004 and a more recent fi ne for noncompliance with the ruling in December 2005. Microsoft has also shifted its marketing focus, tangled with Google over a search engine issue that is loosely reminiscent of the original antitrust claim made by Netscape nearly a decade ago, struggled to buy Yahoo!, and announced a looming change in business strategy alongside an administrative shake-up. Microsofts attempts to take over Yahoo! have, to date, not succeeded. Both Goggle and Yahoo! do not appear as naive or vulnerable as Microsofts competitors in the 1990s. Monopoly: The Battle with Europe The U.S. DOJ settled its antitrust case against Microsoft in November 2001, and the state attorneys general followed suit shortly thereafter. The settlement dictated that (1) customers must have a choice about what Windows components are mandatory in any installation of the operating system, and (2) Microsoft must disclose certain information to allow third-party developers to create software that better interoperates with Windows. The end of the DOJs pursuit of Microsoft essentially closed the door on further investigations into Microsofts business practices in the United States, and forced Microsofts high-profile competition to look elsewhere for support of their assertions of Microsofts monopolistic tendencies. IBM Corporation, Oracle Corporation, Sun Microsystems, RedHat, RealNetworks, Adobe Systems, and more recently Google have all entreated the European Union to use its authority to regulate Microsoft on their behalf and for the protection of the software giants myriad customers. The EU began its antitrust investigation of Microsoft in 1998 when it received a complaint from Sun Microsystems alleging that Microsoft was willfully concealing information that Sun required for its software to successfully interoperate with Microsoft Windows. Subsequently, the EU opened a second unrelated investigation of Microsoft in 2001 when the company began shipping its operating system with freely attached media player software that competed directly with rival offerings such as RealNetworks RealPlayer. After five years of investigating Microsofts tactics, the EU issued antitrust rulings in March 2004 and again in 2008. The EUs decision brought with it a $613 million fi ne and required Microsoft to alter its business practices to increase competition in two areas that satisfi ed both of the independent investigations: (1) Microsoft must not ship Windows with its own embedded media player, and (2) the company was required to produce documentation to assist its rivals in writing Windows Of- fi ce productivity software. Meanwhile, Microsoft settled out of court with Sun, Novell Networks, and RealNetworks for a total of more than $3 billion so that each company would forego its related complaints in both the EU and the United States, which weakened the EUs stance on the antitrust case. However, just over a year later, the EU began receiving complaints that the company still had not made any progress on either tenet of the 2004 antitrust ruling. The commission threatened new fines, and Microsoft made an effort to adhere to the terms of the ruling and to smooth its relationship with the EU. Microsoft began shipping its stripped-down version of Windows in Europe in 2005, satisfying the fi rst requirement of the EU ruling. However, a number of meetings and information transfers have ensued regarding the documentation requirement, which neither side has found mutually satisfactory. Microsoft chose to air the confl ict to the press, which consummated in July 2006 when the EU levied a $356 million fi ne against the software giant for failing to comply with the 2004 ruling. The EU has threatened to fi ne Microsoft nearly $4 million each day until the company complies. Microsoft has a number of pending appeals in the EU case, both of the original ruling and of the most recent noncompliance fi ne. A Shift in Business Strategy While Microsofts battle with the EU continued, Google fi led a complaint with the U.S. DOJ and with the EUs antitrust authorities in March 2006. The complaint alleged that Microsoft had designed its new Internet browser, Internet Explorer (IE) 7, to primarily use a Microsoft search engine, which would place Google at a competitive disadvantage in the Internet search market. However, the DOJ found in May 2006 that the default settings in the browser were not a competitive threat to Google. Industry analyst Paul Thurrott describes the finding: In a court fi ling, the DOJ noted that Microsoft had first briefed it about IE 7s search box months ago. The feature is easily modified to use any Internet search engine, including that of Google, the DOJ said, using a relatively straightforward method for the user to select a different search engine from the initial default. Furthermore, the DOJ wrote, Microsofts actions with IE 7 are a far cry from the anticompetitive behavior that got the software giant into legal hot water almost a decade ago. The reason? IE 7 respects changes that the user made prior to installing this version of the browser. If the browser was previously using a search service from Google or Yahoo by default, IE 7 will not change that choice to MSN Search when the product is installed. IE 7 only uses MSN Search if no default has been set. The DOJ has concluded [its] work on this matter, the fi ling reads. This behavior is wildly different from the fiercely anticompetitive and monopolistic tactics that Microsoft has used to thwart its enemies in the past. This change in direction provides direct evidence that a new school of thought is emerging within the old software giant. An atmosphere likened to that of a startup software company is emerging within this large multinational, one that values building trusting relationships with partners. The company has even taken a renewed interest in its marketing initiatives by elevating its Chief Marketing Offi cer Mich Matthews to directly report to CEO Steve Ballmer. A clear motivator for increased marketing vigor can be directly attributed to the evil empire moniker attributed to Microsoft in free-software development and operating system circles, two of the companys main competitive foes. Meanwhile, in late April 2006, Microsofts share price plummeted 11% in a single day after the company said it would spend $2.5 billion to compete against rival game consoles and search technology, and to develop online alternatives to the new versions of its Offi ce productivity software and the next version of the Windows operating system, Windows Vista. As Microsoft pours funding into its research arm, the door to the next wave of Internet technology is upon it, and the key to that door will be the Internet browser. Notes The Economist: The extent to which web browsers are open to outside firms is important because they represent a platform for providing services via the Internet, overshadowing the primacy of the operating system as the platform for PCs. Whoever controls these platforms is in a position to determine what users can doas well as steer sales. Service provision via the Internet is that next wave, and innovation in that arena has already begun. Microsoft has reluctantly come to the same conclusion, even if a little late. The stakes are high in the markets where Microsoft and its closest competitors play. Googles market share could approach 90% of the search market in the coming year. Microsofts sales of Windows Mobile platform products are projected at 40% of the global smartphone market by 2012, according to Eddie Wu, managing director of Microsoft ODM embedded devices, Asia. It is not in Googles or Microsofts interest or competitive nature to allow uncharted markets and technology domains to be dominated without vigorous battles. Googles complaint against Microsoft is a result of the integration of browser search technology. This technology will provide access to a myriad of Internet services once it proliferates. Microsoft avoided regulatory hurdles with that particular complaint, but the EU is paying close attention to the features that will be available in Windows Vista and has warned that embedding new, anticompetitive functions into that operating system could violate further antitrust rules in Europe. With regard to the U.S. Department of Justices monopoly case and oversight of Microsofts practices, a spokesperson for the company announced that Judge Colleen Kollar-Kotellys order, issued at the end of 2008, was extended through November 12, 2009. The courts action came in response to requests by a number of states involved in the case to extend the consent decree by fi ve years. Microsoft Chairman Bill Gates has always been a firm believer in the power of innovation, and strives to reinvent Microsoft ahead of disruptive technology curves. Microsofts current business model relies on charging license fees for boxed or downloadable software, so the company may control its distribution and use. With the impending paradigm shift to Web services, cloud computing, and virtualisation technology, Gates noted in an internal corporate memo that the coming services wave will be very disruptiveperhaps even to Microsoft itself. As both Gates and CEO Steve Ballmer also continue to chase Google in the Internet search war, they keep an eye on their rear view mirror at the EUs regulatory and compliance arm that has proven more effective than the U.S. Department of Justice in constraining the software giant.

Please write a detail summary of this casestudy it will highly appreciateable and will give a huge like