Summary
The case study provides insight into the emergence and the growth of the cloud computing, which is perceived as a threat to the Microsoft businesses. For the last two decades, people and enterprises have been storing their data and running their applications on their computer hardware. In this case, the majority of the laptops and desktops have been running Windows, which is one of the profitable product of the Microsoft. However, with the development of the high bandwidth internet connections, people are now running application and storing their data remotely on "in the cloud" on severing farms (Hill and Jones, 2013). These server farms are owned by enterprises such as Google, Amazon, and Microsoft.
As long as the people and the enterprises have an internet connection, they can store and access their data as well and run applications from any place. Consequently, the Windows monopoly is under threat since other Operating systems such as Android, OS X, and Linux can run the application through cloud computing. From this perspective, Microsoft saw this as a threat and business opportunity and subsequently invested on the cloud computing.
Questions
Question 1
The technological forces such as fast internet connection and the emergence of the cloud computing are allowing the clients to store and run their applications at any time and any price. As a result, this has threatened the Microsoft business because people are now able to use other operating systems rather than Microsoft's window (Hill and Jones, 2013). Therefore, if Microsoft did not saw this as a business opportunity and invest, it could have lost a number of clients and subsequently diminished profit. In the next decade, Microsoft's business would be no longer a monopoly because most of their clients would have shifted to other enterprises to move with the technology. Microsoft decided to invest on Cloud computing because they realized that its economics is becoming attractive and hence threatening their Window business. Companies such as Google has also been in the frontline to enter into cloud computing business through Google apps in 2008.
Question 2
One of the weaknesses the company faced was the high cost of rewriting the application to run on the cloud-based operating systems like Azure (Hill and Jones, 2013). The company had to develop specific tools to facilitate the transition in a cost effective way. Another challenge was the cloud-computing security risk. For the security reasons, some firms were required to uphold control over data on the committed servers. In addition, Microsoft was not the first mover since other enterprises such as Amazon has a three years head start.
Question 3
In the old business model, the clients were required to pay their license fee on a yearly basis. However, the new model allowed them to "pay as you go" for application such as Office Live (Hill and Jones, 2013). This pay-as-you-go structure will reduce payment for application upfront and restrict a client from overspending on application and purchasing excess software. As a result, this is anticipated to affect the financial performance of the company in the future adversely.
Question 4
Microsoft developed a self-contained unit to develop and implement a new operating system known as Azure. This system helped the company to distribute workloads in different and numerous servers. The aim of this unit was to enhance micromanagement, innovative and creativity. This is because this separate unit can be able to focus on one product or task, which is cloud computing.
Question 5
If Microsoft utilized the "wait and see" approach, it would have reduced the risk of the investing on the cloud computing. This is because the company would be in a position to study the uncertainty and market and determine the effective measure to overcome them in future. However, delaying in the investment would have resulted in a late entry, which is a barrier to the business. The company would be behind its competitors regarding development, and this could reduce profit and market share.
References
Hill, C. W., & Jones, G. R. (2013). Strategic management: An integrated approach (10th Ed.). Mason, OH: South-Western, Cengage Learning.
