Value Creation by Windows
Soumenjit Mitra
Value Creation Paper
MBUS 627
Introduction
The history of Microsoft is a textbook case of the power of broad vision. In the early days, Microsoft 's MS-DOS competed head to head with IBM 's OS/2. Where IBM was myopically fixated on large customers as the only part of the market, Microsoft saw the market more broadly as every person in the world. This allowed them to take market share and become the monolithic corporation they are today by making their operating systems cheaply available to everyone. This was an early example of their value creation, since that time they have taken to a different method, but they still continue to create value for their customers.
Value Creation Methods Microsoft uses a very simple method of designing products. This starts with reverse innovation, or starting with what the customer wants. They simply ask customers what is missing from previous operating systems and attempting to incorporate the ideas in new products. This is one part of the empathic design process which they employ. The second part is to make heavy use of prosumption. For example, the typical way a software company operates is to develop an “alpha” version of the software, work it over in house until it is mostly stable, then release to select members of the market a “beta” version for further testing. This allows the remaining bugs to be worked out of the program so that the final version requires little if any patching. When Microsoft released Windows ME, they took a different approach. They released for sale what most companies would have considered the alpha version of Windows ME, which resulted in numerous technical difficulties and complaints, which they took and worked the fixes into Windows XP, which was released in its beta version. In this way, Microsoft saved the cost of alpha and beta testing, beat the competition to market, and had the general public pay for the privilege of finding all the bugs in the program
Value Creation Paper
MBUS 627
Introduction
The history of Microsoft is a textbook case of the power of broad vision. In the early days, Microsoft 's MS-DOS competed head to head with IBM 's OS/2. Where IBM was myopically fixated on large customers as the only part of the market, Microsoft saw the market more broadly as every person in the world. This allowed them to take market share and become the monolithic corporation they are today by making their operating systems cheaply available to everyone. This was an early example of their value creation, since that time they have taken to a different method, but they still continue to create value for their customers.
Value Creation Methods Microsoft uses a very simple method of designing products. This starts with reverse innovation, or starting with what the customer wants. They simply ask customers what is missing from previous operating systems and attempting to incorporate the ideas in new products. This is one part of the empathic design process which they employ. The second part is to make heavy use of prosumption. For example, the typical way a software company operates is to develop an “alpha” version of the software, work it over in house until it is mostly stable, then release to select members of the market a “beta” version for further testing. This allows the remaining bugs to be worked out of the program so that the final version requires little if any patching. When Microsoft released Windows ME, they took a different approach. They released for sale what most companies would have considered the alpha version of Windows ME, which resulted in numerous technical difficulties and complaints, which they took and worked the fixes into Windows XP, which was released in its beta version. In this way, Microsoft saved the cost of alpha and beta testing, beat the competition to market, and had the general public pay for the privilege of finding all the bugs in the program
Cited: CD costs, 10,000 CDs manufactured in 15-20 days, cost $6,876, or $0.69 each. http://www.nationwidedisc.com/index.php?option=com_content&task=view&id=74&Itemid=117 Lai, Eric, “Microsoft Raises Consumer Vista Tech Support Costs,” PCWorld.com http://www.pcworld.com/article/128788/microsoft_raises_consumer_vista_tech_support_costs.html Tynan, Dan, “The 25 Worst Tech Products of All Time,” PCWorld.com http://www.pcworld.com/article/125772-2/the_25_worst_tech_products_of_all_time.html#millennium Ubuntu System Requirements, https://help.ubuntu.com/community/Installation/SystemRequirements Windows System Requirements, http://windows.microsoft.com/systemrequirements -------------------------------------------- [ 1 ]. † Prices taken from products.google.com