Microsofts is entering forbidden terrain
Microsoft is currently surprising friend and foe by producing their own hardware in the form an expensive laptop. The firm is more flexible than everyone expected.
Windows, Office and Outlook, those are the products that we know Microsoft of. These are all software products, but since Microsoft is now manufacturing its own, super fast laptop, the whole business model changes.
Microsoft is from now on a hardware manufacturer with its own game consoles (XBOX), phones, tablets and smart watches. Two weeks ago, a laptop got introduced into the wide array of products that Microsoft produces.
Nobody could’ve seen it coming since the innovational focus was no longer on Microsoft. Microsoft was considered a big and inert company with no ability to innovate in a disruptive way, and therefore, it could develop the Surface Book without the hassle of prying eyes of competitors. Microsoft was considers inert because the corporate software they are developing is considered dull and in the technological revolution that we currently live in, giant players like Apple and Google dominate the market.
However, the Microsoft Surface is not completely new. It got introduced back in 2012 as a substitute for tablets and laptops, since it amalgamated both products’ characteristic into one, ersome tablet with a keyboard that just didn’t work properly. However, it gained some popularity in the corporate sector because of the mobility of the machine.
The Microsoft Surface can cumbbe called some sort of niche, but in 2012, it gained a revenue of roughly 2 billion dollars. This is a revenue that has not been completely unnoticed; Apple is now entering this niche with the iPad pro which has a significantly larger screen, a stylus and an optional keyboard, which is integrated in a cover. When Apple is imitating you, it is a good sign.
Microsoft is now extending its Surface-line with a ‘tabtop’ that is able to lie on your lap, just like a laptop does. However, it remains an amalgamation of a keyboard and a tablet, since both are disconnectable.
The Sufrace Book is entering the market with a very high price. This is an indicator that Microsoft is trying to distinguish itself by delivering high quality products like, for example, Apple. It therefore competes with the MacBook Pro, but also with some cheaper competitors like Lenovo, Acer, HP and Dell. These companies will not be happy that their biggest softwarepartner is now a competitor in the computer hardware side of business.
The traditional divisions between hardware developers, software developers and online services are now diminishing and Microsoft is now increasing its stakes in premium gadgets. Windows is thereby an aid and not a goal in itself. The operating system is now deployed in order to lure users in towards Microsoft’s (online) services, like OneDrive, Office 365 etcetera.
This is from now on the financial substantiation that CEO Satya Nadella is implementing rapidly. However, this did not come without any sacrifice; Microsoft had to layoff over 17000 of its employees in order to habilitate this strategic change.
The overall strategy is to escape the dull image that Microsoft has by showing the world that it is still able to innovate. Therefore, Microsoft’s structure will consist of three pillars from now on: 1) Windows and Hardware (XBOX, Surface, Phones etc.) will be now one entirety under the name: ‘Personal Computing’ 2) ‘Intelligent Cloud’ and 3) ‘Productivity and Business’ (Office and other corporate software).
An overall shift within Microsoft as you can see, but will this be the shift that will enable Microsoft to compete with its biggest rival Apple?
Hijink, M. (2015), Microsoft’s Buigzame Karakter, NRC Next
I think I may assume that everyone here is familiar with a company called Apple. For the people that do not know it; according to its market value, it’s the largest company in the world (Fobes, 2015). But Apple thinks that large isn’t large enough and, apart from its current activities, there’s still a lot of terrain to be conquered. However, besides having a significant market share in every sector they operate, Apple still hasn’t been able to conquer the corporate sector, where big players like Avaya are dominating the playing field.
But recent announcements indicate that the above mentioned will soon undergo a major shift. A month ago, Apple’s CEO Tim Cook announced a collaboration together with Cisco’s Executive Chairman John Chambers. For the people that don’t know Cisco; Cisco is one of the largest technology companies which designs, develops and sells networking equipment mainly to other companies. Just to give you an indicating number; 85 percent of the world’s internet traffic flows through Cisco’s systems, which automatically makes it the world’s leading internet networking manufacturer.
So, what will this collaboration entail, and why are both parties joining forces? The formal announcement was a bit vague in what both companies exactly are going to contribute, but some further investigation makes it clear that something is about to happen. To speak in Apple’s jargon; Apple devices are going to work together with Cisco networks in a way ‘it has never been done before’. To be a little bit more concrete, Cisco and Apple are now developing a so called ‘fast lane’ for iOS devices. This means that employees or clients of companies which run on a Cisco network will have a seamless integration into this network, with their phones. For example, static dekstop phones (developed by Cisco) can now access the iOS device’s directory through the use of Cisco’s network. Another example; Cisco’s WebEx video conferencing application will run seamlessly with iOS devices.
But the following question still remains; why are both parties joining forces? Both companies have a similar belief that there are not enough hours in the day for people to be more productive. That’s why both companies think that they should deliver better tools. By collaborating through this joint development project, both companies strive to change the way people work.
But do both companies have an individual motive? Maybe a financial motive? It is obvious that Apple has been victim to a decline in sales of their biggest cash cow; the iPhone. By tapping into the corporate sector through this collaboration, Apple not only extends their operational terrain, it may also increase revenues enormously. Cisco’s motive however, has a more strategic nature. Strategic partnerships and co-development are both key pillars of Cisco’s innovation strategy. This relationship highlights the value and innovative customer solutions that result when Cisco does both.
The above predicts that this collaboration will result in a bright future for both companies. However, some final questions remain unanswered. Will this collaboration be the true game changer that Apple (i.e. Tim Cook) is so desperately looking for? Please feel free to share your thoughts.
[Summary Technology of the Week] ‘Mobile Crowdsourcing through the Internet of Things’ TrackR vs. Tile
For the Technology of the Week assignment, team 10 has analyzed and compared two business models of very similar US based start-up companies. The two companies examined are TrackR (www.thetrackr.com) and Tile (www.thetileapp.com) respectively, which both make use of Bluetooth and Internet to locate missing personal belongings. TrackR and Tile both offer small Bluetooth transmitting devices that can easily be attached to personal belongings (e.g. keys, laptops, pets etc.). The transmitted Bluetooth signal can be picked up by smartphones and can be passed on through the Internet, to the owner of the missing object. This is a good example of device-to-device interaction, which is a characteristic of ‘The Internet of Things’ (IoT).
The Internet of Things permits sensor-equipped devices to be located and controlled throughout an existing network infrastructure. It is needless to say that the exponential growth in Internet usage has enabled this development and that the accuracy and efficiency of the Internet of Things is strongly dependent on the amount of users whom, in this case, have a TrackR or Tile app installed on their smartphones.
TrackR is the first analyzed company, which is founded in 2009. It received over $ 1,000,000 in funds from the crowd funding website indiegogo.com. It develops a Bluetooth transmitting device, attachable to practically anything. It makes use of the ‘mobile crowdsourcing’ technology, which means that the Bluetooth signal transmitted by the device gets picked up by the complementary TrackR application (installed by TrackR users on smartphones). The phone however, must have an active GPS signal in order to pass this signal through to the respective owner of the missing object. Stolen objects can now be detected through the use of crowdsourcing, even though the TrackR transmitter can only send signals up to 30 meters.
Tile is the second company, which is analyzed in this report. It was founded in 2012 and it raised over $ 2,600,000 in funds from crowdsourcing initiatives. In the past years it raised another impressive $13,000,000 from, amongst others, the Chinese software developing company Tencent. It works with a similar ‘mobile crowdsourcing’ technology as the TrackR. However, the Tile requires an active Internet connection, instead of the GPS signal mentioned above. The initial downside of the Tile is that it only offers a complementary TileApp for iPhone users. This immediately eliminates the accessibility of large amounts of Android and other operating system users.
This paper analyses companies’ value propositions, their relevancy and their unique differentiation. It also identifies each company’s key activities, its key resources and its key partnerships. Together with a detailed SWOT analysis and Porters’s five competitive forces model, an in-depth analysis of each company is made.
Multiple similarities arise after the analysis of both companies. Amongst others:
– Very similar Product and Value Proposition
– Mobile Crowdsourcing Technology
– Started with Crowd-funding
– Both companies lack transparency in their supply chain and distribution explanation
– Both companies mainly focus their E-Commerce efforts on B2C retail
Multiple differences arise as well:
– Segmentation: Difference in product offerings (TrackR: multiple products vs. Tile: one product)
– Difference in raising funds for growth and development of the company (TrackR: Crowd-funding vs. Tile: Crowd-funding + Private Equity)
For the future, the writers of this paper expect that there will be a rise in demand on a corporate level. If demand increases on the corporate side, it will automatically attract new entrants that, due to the low entry barrier and unpatented technology, may be hard to defend. At this point in time, both TrackR and Tile benefit from their first mover advantage by owning the majority of the users in this market segment. However, if new entrants are attracted due to the rise in demand, competition may cause a diminishing market capacity of both TrackR and Tile (e.g. by the introduction of disruptive technologies from new entrants). Therefore, the writers of this paper see an opportunity in TrackR and Tile joining forces. By combining their expertise, their network, their liquidities, and by benefiting more from economies of scale, TrackR and Tile combined may become too hard to compete with.
Erik Klein Getlink – 437664
Colin Blonden – 437130
Shanise Abhelakh – 345268
Nienke Hoogeveen – 372147
Jessica Dooper – 358278