Turbulent Air in Those Azure Clouds
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Case Study 6, Chapter 6: Turbulent Air in Those Azure Clouds page 158-160
Textbook: Experiencing MIS fourth edition
Authors: David M. Kroenke
Edition: ©2013 | Pearson
ISBN—9780132967556V
SAMPLE ANSWER
Introduction
- Cloud computing is a model computing network where an application program manages and runs on connected servers instead of a local device such as a personal computer. Cloud computing is a process that runs on several connected computers uniformly or at the same period of time. This concept is known as virtualization.
Microsoft problems stem from the knowledge that their competitors like Apple and Google have outsmarted them in the development and advancement of the cloud connectivity application software and they are tracing them from behind instead of leading from the front the way they are used to. Apple seems to be many years ahead of them in terms of research that they (Microsoft) have opted to purchase Skype in an effort to gain lost ground.
- It’s cheaper to operate a mid range server than a windows server while the marginal costs for Microsoft are still higher.
- The costs reduce 10 times
- The marginal revenue for office 365 is $6 per month per employee = $120 per month or $1440 per year. For 8760 hours @ 10 cents equal to $876. Now for 2000 people it would be 12,000 per month and the costs of Microsoft license and hard ware. Office 365 is more profitable than Microsoft.
- Microsoft acquisition of Skype was an effort to improve its financial position from the inherent threat of cloud computing through mergers and other acquisition activities. Complimentary companies increase the competitive nature of companies while also expanding its products to the global market. Skype is a soft ware that is available for free and facilitates voice and visual communication between computers over the internet. It was founded in Luxemburg in the year 2003. The major strategy of Microsoft’s acquisition of Skype was the reduction of the cost of improving and building its internet phone which targets to improve its competitive advantage in IT innovations globally. Microsoft has developed its current X-Box console, Lync of IP telephone services and outlook to compete effectively with its major rival Google. Skype has alliances with Facebook, Comcasts among others. Microsoft targets to utilize all these connections to its advantage in an effort to outdo its major challengers. (Hausmann & Hidalgo, 2011)
- Independent Software Vendors (ISVs) are companies that specialize in developing and selling the software. These soft wares are designed for specific niche markets or mass market. For example oracle products may be incorporated in other soft wares through ESL (Embedded Software Licence) (Popp and Meyer, 2010)
The future development of ISV is under threat as Microsoft has opted to purchase Skype a soft ware program that facilitates telephone and visual communication from the owners of the soft ware instead of requesting a similar one from ISVs shows that it’s harboring a sinister motive and its questioning the ability of the ISV to develop such a soft ware. If I were an ISV I would be seeking the attention of other platforms like IBM or better still develop independent soft ware’s that work like Skype in the market. (Deventer, Imai, Mesler, 2004)
- I would invest more in cloud connectivity and acquire more companies like Skype that facilitate cloud connectivity and invest more on research and development and also on its infrastructure.
References
Deventer, D., Imai, K., Mesler, M. (2004). Advanced Financial Risk Management, An Integrated Approach to Credit Risk and Interest Rate Risk Management. John Wiley & Sons
Hausmann & Hidalgo. (2011) The Atlas of Economic Complexity. Cambridge MA: Puritan Press
http://research.stlouisfed.org/publications/iet/
Popp, K.M. and Meyer, R. (2010). Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry. Norderstedt, Germany: BOD
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