Microsoft Paper

In: Business and Management

Submitted By sturyn
Words 2094
Pages 9
Microsoft Case
Team 7:

Executive Summary

Microsoft (MS) is a multinational computer technology corporation that develops, manufactures, licenses, and supports a wide range of software products for computing devices. In the mid 1990’s, Microsoft held the monopoly in the production of Operating Systems (OS) for personal computers (PC). When their monopoly was threatened by Netscape, MS began bundling the Internet Explorer (IE) web browser with Windows, using cross-promotional deals with internet service providers (ISP), and prevented PC makers from customizing the opening screen showing Microsoft. These actions, which some view as illegal and unethical, dissolved any competition, raised the barriers of entry and inhibited innovation.

1. What is the primary barrier to entry in the operating systems market? How does Netscape’s product threaten to remove this barrier?

The primary barrier to entry in the operating systems market is the scarcity of various operating systems compatible (including but not limited to Windows) software applications. Due to Microsoft’s monopoly power in operating system for Intel-based personal computers (more than 90% of the market), the high demand for the on Windows operating system attracts software application developers to write code for Window PC compatible products rather than a vertical integration of software and hardware. Since software applications written to Windows is not compatible to alternative operating systems, and developing a new operating system to run all the Windows compatible software applications is expensive, time-consuming and difficult, this software application barrier sets a high threshold for a company to entery into the operating systems market. On the other hand, if the software applications can be developed to run across operating systems, the barrier to entry is reduced. Netscape,…...

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