STEP 1: Review a couple of the attached Articles regarding Microsoft; STEP 2: Sp
ID: 427208 • Letter: S
Question
STEP 1: Review a couple of the attached Articles regarding Microsoft;
STEP 2: Specific to the assigned article, textbook readings (Chapter 9 examines decision making in the international management arena and discusses topics such as; models of decision making, decision-making concerns, biases, group decision making, and problems with groupthink. Chapter 10 considers international management in the context of cultural impacts and the manager’s ability/efforts in influence and negotiations), and related subject matter research; answer each of the following questions:
Part A: Identify and briefly discuss those specific reasons given in the article for the decline in Microsoft Revenues (you may also include other reasons if identified from your research).
Part B: Specific to International Management; identify and discuss how and why the topics/concepts as presented in Chapters 9-10 (Chapter 9 examines decision making in the international management arena and discusses topics such as; models of decision making, decision-making concerns, biases, group decision making, and problems with groupthink. Chapter 10 considers international management in the context of cultural impacts and the manager’s ability/efforts in influence and negotiations) might have application to Microsoft Windows, and those events/decisions as described in this Article.
2016 Research firm Gartner says Windows revenue should decline this year, by 7.5% to
$13.5 billion in constant currency, hit by global economic uncertainties, tough foreign
exchange rates and tightening IT spending.
That comes even as Microsoft Corp. says that Windows 10 is off to the best start of
any version of its flagship operating system, measured by the number of active
devices running it.
Gartner’s latest data counts all Windows sales, not just Windows 10. But John-David
Lovelock, Gartner’s chief forecaster, said the declining sales forecast for Windows
reflects weaker-than-expected sales of Windows 10 in 2016. He declined to provide
specific revenue figures.
Earlier this month Microsoft said 270 million active devices run Windows 10, a 35%
increase from the previous update on Jan. 4. That uptake outpaces that of Windows 7,
previously the fastest-growing version of Windows, in the same time frame by 145%,
Microsoft said. Much of the uptake for Windows 10, which Microsoft released in July, comes from
free downloads by consumers, industry analysts say, so it doesn’t contribute to
Windows revenue.
In its latest forecast, Gartner downgraded its outlook for sales to corporate
customers, who pay for the new operating system.
Mr. Lovelock said companies that paid for Windows 10 licenses last year, in order to
test the new operating system, aren’t expected to roll it out company-wide until 2017.
Others are “delaying Windows 10 until they start seeing better business conditions,”
he said.
Consequently, a more robust economy in 2017 may boost Windows 10 sales.
However, factors such as declining sales of PCs could work against that effect, he
added.
Microsoft declined to comment specifically on Gartner’s forecast, pointing instead to
Windows 10?s rate of uptake.
Microsoft, in an emailed statement, said Windows 10 is “off to the hottest start in
Windows history.” As an example, the company said the U.S. Department of Defense
recently committed to upgrading more than 4 million devices to Windows 10 this
year. More than half of Microsoft’s current worldwide enterprise customers are using
Windows 10, the company said.
Among other factors, Gartner says, Windows 10 revenue will be held back by weak
sales in key emerging markets, particularly in Latin America, which faces “escalating
political and economic challenges,” Gartner said. Mr. Lovelock said another key factor driving down its outlook for revenue from
enterprise sales is that companies are spending less on new computers, and other
devices.
The global market for PCs, tablets, mobile phones and other devices is expected to
shrink by 3.7% in 2016, to $626 billion, according to Gartner’s latest forecast.
It sees weaker PC sales spread around the world, though sharper in some regions.
Spending on PCs in the Eurasia zone, for instance, is expected to decline by more
than 40%, compared to 3% in North America, the company said. Overall, declines in
IT spending, which is projected to drop 0.5% from 2015 to $3.49 billion, will be
sharpest in China, Brazil and Russia, Gartner said.
“The fact that the Windows environment is shrinking is largely due to the fact that the
number of PCs in the office are shrinking,” Mr. Lovelock said.
In a November report, Gartner itself estimated that at least half of the firms currently
using some version of Microsoft’s operating system are expected to adopt the latest
update by January 2017, completing companywide migrations by 2019.
That would be roughly six months faster than it took them to switch to Windows 7,
Gartner said at the time. But Mr. Lovelock said those projections were based on surveys of enterprise users in
mid-2015, when many had a rosier outlook on IT spending for the year ahead. “The
world has changed on them” since then, he said.
Other industry analysts said they don’t expect any significant revenue growth from
the enterprise version of Windows 10 until 2017.
“By making it free, they’ve moved a huge portion of consumers to Windows 10,” said
Al Gillen, a researcher at IDC who covers enterprise infrastructure. “But there are
costs associated with any upgrade, especially at larger firms,” he added.
J.P. Gownder, a principal analyst at Forrester Research, said most companies
planning to upgrade or switch to Windows 10 are currently in the pilot stage. “That
takes time and due diligence,” he said.
“But over the next few years, a very good number of enterprises are going to make
this move, because many will see it as their final upgrade” before migrating fully to
the cloud, Mr. Gownder said.
2017 BEIJING— Microsoft Corp. MSFT -1.27% has finished development of a Windows 10 version customized for Chinese government use, which could boost its China prospects after sales were hit by Beijing’s cybersecurity crackdown. Microsoft declined to say how the software was modified, but in general China’s
government is concerned about technology products that could contain hidden “back
doors” to enable foreign surveillance.
The Chinese government version of Windows 10 was developed with state-owned
company China Electronics Technology Group. Aimed at reopening Microsoft’s access
to the Chinese state sector, it is another example of how global companies are
customizing products to meet heightened security demands from Beijing.
Qualcomm Inc., Intel Corp. and other U.S. technology companies have also struck
similar Chinese partnerships. International Business Machines Inc. on Sunday
announced a joint venture with Chinese conglomerate Wanda Group to provide
cloud-computing services. U.S. companies must walk a delicate line in these ventures, revealing enough about
their technology to reassure Chinese authorities without giving away core intellectual
property to partners who could become competitors—or allow technical changes that
would permit the Chinese government to conduct surreptitious surveillance of its
own.
Microsoft said in an email Tuesday it was “pleased with the progress” it made in
customizing Windows 10.
In this case, the version of Windows 10 is specifically for China’s government
employees, not consumers. When Microsoft in December announced a joint venture
with CETC to license and deploy Windows, the company said it was following a
similar model it offers governments globally. Those sorts of deals often include
stripping out consumer-focused features in the operating system.
There is little doubt the Chinese government would welcome backdoor access to
Windows, said Adam Segal, director of the Digital and Cyberspace Policy Program at
the Council on Foreign Relations. A Chinese cybersecurity law passed in November
requires tech companies to provide “technical support” to the government. That could
lead to demands for backdoor access to programs such as Windows, he said.
Microsoft, though, has steadfastly opposed providing that sort of access to
governments, both in the U.S. and abroad. The company sued the Justice Department
last April, opposing law-enforcement efforts to secretly gain access to customer data. And it supported Apple Inc.’s suit last year to prevent U.S. investigators from forcing
the company to unlock a terrorist’s iPhone.
In a speech at the RSA information-security conference last year, Microsoft president
and chief legal officer Brad Smith said “the path to hell starts at the backdoor.”
The modified version of Windows software still needs to go through Chinese
government review before it can be included on official procurement lists, a Microsoft
spokesman said. Xiong Qunli, chairman of CETC, said his company expects the
government to greenlight the software.
“We’re currently beginning the sales process,” Mr. Xiong said.
CETC, which develops technology for Chinese military and civilian use, owns 51% of
the joint venture with Microsoft, C&M Information Technology Co. Ltd.
The software has already been tested at three pilot sites, including a China customs
office, according to two people familiar with the matter.
China had dropped Microsoft’s newer products from government procurement lists
following disclosures by former U.S. National Security Agency contractor Edward
Snowden about U.S. surveillance in 2013.
Microsoft remains under an antitrust investigation by China’s State Administration
for Industry and Commerce. Microsoft has long found the China market challenging
due to widespread software piracy and China’s efforts to promote domestic
technology, people familiar with the matter said.
2018 A sharp increase in cyberattacks gave Microsoft Corp.’s MSFT -1.27% ubiquitous
Windows operating system the kind of lift it hasn’t seen in years, as fears of getting
hacked prompted companies to upgrade their computers faster than they otherwise
might have.
When the software giant reported quarterly earnings last week, it surprised several
analysts, notching an 11% jump in sales of Windows 10 licenses for computers sold
primarily to corporate customers, from a year earlier. Bulk sales of Windows licenses
and related cloud services, meanwhile, jumped 21%. Windows 10 is Microsoft’s mostcurrent
version of its operating system and used widely in computers world-wide.
Cyberattacks plagued corporations last summer, rendering PCs running older and
unpatched version of Windows useless, leading some corporate tech buyers to
upgrade.
The increases were especially notable, analysts say, because personal-computer
shipments world-wide had no growth in the same period, according to International
Data Corp. Also, sales growth in the unit that houses Windows, called More Personal
Computing, had been moribund for years.
What’s more, Microsoft said revenue for the segment that includes Windows, an
aging franchise whose epitaph has been regularly written, is expected to grow about
13% in the current quarter. The optimistic forecast for Windows comes as the
company is downgrading the operating system’s importance. Cedars-Sinai Health System in Los Angeles is close to completing its upgrade of
nearly 20,000 computers to the nearly three-year-old Windows 10, said Darren
Dworkin, the system’s chief information officer. Although the upgrade didn’t come
about because of cyberattacks, Mr. Dworkin said he is worried about them.
“There are more reasons now for wanting to keep current,” Mr. Dworkin said.
The number of data breaches in the U.S. jumped 45% to 1,579 in 2017, according to
the nonprofit Identity Theft Resource Center and data-security firm CyberScout. That
is one reason why companies and government agencies such as the United Kingdom’s
Department of Health and Social Care are upgrading at a brisk pace.
The WannaCry and Petya cyberattacks in 2017 highlighted glaring vulnerabilities of
older and inadequately patched versions of Windows. The attacks, which locked
digital files and demanded payment for them to be released, disrupted operations at the British health agency as well as car factories in France, a law firm in the U.S. and
elsewhere.
In targeting older Windows versions, those attacks helped boost Windows 10 sales.
The last time Windows registered comparable quarterly growth was during the
“upgrade cycle” for Windows XP, a version of the operating system that made its
debut in 2001, a spokeswoman said.
Microsoft, which doesn’t disclose dollar figures for Windows revenue, recorded 11%
growth in sales of Windows licenses for devices sold primarily to corporate customers
in the quarter ended June 30, 2014, as the company’s support for Windows XP
neared its end. Support for Windows 7, which many corporations still use, ends in
January 2020.
Windows also benefits from being the operating system of choice for corporate
customers, said Patrick Moorhead, an analyst with the research firm Moor Insights &
Strategy. Some version of the operating system is on 88% of the world’s desktops and
laptops connected to the web, according to analytics website NetMarketShare.
“There’s not an easy replacement for the Windows PC,” Mr. Moorhead said.
One reason for Microsoft’s upbeat expectations for the current quarter is that even
though there are nearly 700 million devices—mostly PCs but tablets, Xbox machines
and other devices—running Windows 10, there are another 800 million devices
running older versions.
2018 It is actually a credit to Microsoft MSFT -1.27% that its annual developers conference
has become a bit boring.
Boring, at least, if you aren’t interested in a company bringing in staggering amounts
of revenue and growing at its fastest pace in a decade. Microsoft didn’t even offer the
excitement of the latest new device or Windows upgrade at its annual Build soiree
that kicked off Monday. Instead it is all about what lies under the hood; specifically,
the tools and services built on a massive global network powered by artificial
intelligence. And those are what the company is choosing to showcase this week.
And for good reason. Like big tech peers Amazon.com and Google-parent Alphabet,
Microsoft has invested billions in that network—and stands to invest billions more.
But unlike those other two, Microsoft’s business outlook hinges almost completely on
its ability to drive businesses and consumers to use the tools and services built on that
network. Amazon, by contrast, still makes most of its money in online retail while
Google is still predominantly an advertising company. Luckily for Microsoft, that vision no longer sounds far-fetched. The company is on
track to break the $100 billion mark in annual revenue for the first time in its fiscal
year ending in June. And based on the fiscal fourth-quarter projections given in the
company’s earnings call last month, this year’s revenue will be up at least 13% from
last year’s adjusted number, which included a $6 billion boost from deferred revenue
related to Windows 10 sales. That will be Microsoft’s best year of growth in a decade
—essentially since the smartphone revolution made the once powerful company seem
not so powerful.
Microsoft’s challenge is to maintain that growth. Wall Street is projecting double-digit
sales gains for at least the next two years. And the stock—which has nearly tripled in
value since Satya Nadella took the CEO reins in early 2014—is now at 24 times
forward earnings, which is its highest multiple in more than a decade. Microsoft can
make that bet pay off, but it will be anything but boring.
Explanation / Answer
Talking about the revenue which are getting down as per the Gartner analysis, shows that there is a major drop in the usage of windows 10, as the company is showing how the revenues are increased and how they are going to increase, talking about the increase in the revenue Gartner says that this has happened because of the major reason of the operating system usuage which the company has brought down, previously as the company who had windows 7 were providing free upgrade however now they are not providing the free upgrade which is impacting the business, as the cost of the upgrades have become very much high, this is the major reason which has turned up for the windows downfall in achieving the revenue.
The major thing which is impacting is as per the country wherein windows have faced many major challenges wherein windows have tried to solve it out however they are not able to fix it and solve it, they arenot able to view the future challenges which are been faced as the operating systems are getting shrinked from the larger organisations and everything is getting impacted due to it.
The major challenge of revenue growth which is been narrated is due to the system upgradation happening now and than in windows 10 which becomes a challenge for the company to work on as the timelines get impacted due to the installation and this does not help the company to grow and achieve the duration which is required. The upgradation makes the productivity of the work impacted and the work goes on downtime, which is also a major challenge for the company to face, which impacts the working ability of the company as well, As this are the major issues faced, the revenue of microsoft has slowed down, due to the changes not taken place till yet in the operating system.
Talking about the International Management, microsoft needs to provide the status of the work done in such a manner that the fulfilment carried out is very much helpful for the organisation to get the work done on time, the product which is been released out for the respective country should be friendly for them in their respective region and it can help the organisation to work accordingly, microsoft needs to work on the windows in such a manner that it can be very much helfpulf for the user and the feedbacks recevied from the user can be very much helpful for the organisation to grow much and achieve the things in less time.
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