microsoft and the transformation of the computer industry - 1980-2002
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Microsoft and the transformation of the computer industry - 1980-2002 Uploaded for IS 714 Mastering IT Strategy at Boston University School of ManagementTRANSCRIPT
Transformation in the Computer Industry: Insights and Implications
Professor N. Venkat Venkatraman Boston University School of Management
IS714: Fall 2014 @NVenkatraman
Processors
Computers
Peripherals
Networking
OS
Tools
Applications
Consulting
Computer Industry (1980s)
Bill Gates Testimony
Processors
Computers
Peripherals
Networking
OS
Tools
Applications
Consulting
......(2002)
Bill Gates Testimony
Strategies of Key Players
Resellers of computer hardware based on Windows-Intel (“Wintel”)
architecture} }
Processors
Computers
Peripherals
Networking
OS
Tools
Applications
Consulting
......(2002)
Bill Gates Testimony
“How do we define these layers?”
1.Distinct sources of value in the interconnected system
2.Well defined marketplace with a set of alternatives and multiple companies
3.Articulated links to the adjacent layers
Defining the Value Layers
Processors
Computers
Peripherals
Networking
OS
Tools
Applications
Consulting
......(2002)
Bill Gates Testimony
Degree of IntegrationVertical Virtual
Ownership Relationship
Control Coordination
Tight Loose
Hierarchy Network
Technology Linkage
Marketing Agreements
Financial Investments
Joint product/service
Ownership
We can look at a variety of linkages between layers {
Processors
Computers
Peripherals
Networking
OS
Tools
Applications
Consulting
“WindowsIntel”
“Wintel”computers
“Drivers”
“StrategicInvestment”
Microsoft’s Logic of Linkages
Processors
Computers
Peripherals
Networking
OS
Tools
Applications
Consulting
Microsoft’s virtual
integration of the
PC Ecosystem
......(2002)
Positions in one or more layers
Relative market positions in each layer
Nature of links across layers (exclusive versus non exclusive)
Competes and cooperates with other companies within- and across- different layers
Role of each company {
Microsoft orchestrated the PC ecosystem by
• Co-creating the Windows Intel (‘Wintel’) PC architecture
• Controlling Windows OS and Office Applications
• Attracting a set of PC manufacturers to create the hardware (PCs)
• Coordinating the development of drivers for peripherals
• Extending the PC from Consumers to Enterprises
• Evolving the scope of influence to include Enterprise network
The Golden Age of the ‘Wintel’ Ecosystem
1991 2000
In the Bill Gates representation, the layers were static (unchanged)
1 When do new layers of value emerge?
2 When do existing layers of value reconfigure--split into sub-layers or morph together?
POST-PC SHIFTS IN THE
COMPUTER INDUSTRY
Browser Search
Mobile Social
Cloud
1 Role of ‘Browser’
Netscape innovated by introducing Netscape Navigator 1.0 (December 1994) as gateway to the Internet on top of the desktop OS
Microsoft launched its Internet Explorer 1.0 in August 1995 (bundled free of charge with Windows)
What role did Microsoft’s dominance in other layers play in the acceptance of Internet Explorer?
1 Recent Trends in Browser Usage
0
17.5
35
52.5
70
2008 2009 2010 2011 2012 2013*
IE Firefox Chrome Safari Opera Others
1 Role of ‘Browser’
Google’s competitive advantage with its Chrome browser’s dominant market share?
OS
2 Role of ‘Search’
1995 19981996 2000
2009
2 Recent Trends in Search Engine Usage
0
25
50
75
100
2009 2010 2011 2012
Google Yahoo! bing Ask Jeeves Baidu Others
3 Role of ‘Mobile OS’
1996 20101999 2000 2002 2005 2007 2008
4 Role of ‘Social Web’
2002 20102003 2004 2011
Mainframe to PC PC to Internet Post-PC
1985 Now