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Microsoft Supplier Relations

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Schwayb Javid
Schwayb Javid

Microsoft held a dominant position in the PC OS market in the late 1990s with over 90% market share of Windows. They aggressively pursued maintaining their monopoly of Internet Explorer by technically integrating it with Windows and restricting OEMs from removing IE through licensing agreements. Microsoft used strong-arm tactics like threatening to terminate licenses and withhold future software versions from companies like IBM and Apple if they did not comply. They were able to leverage their dominance to force other companies like Compaq to exclusively promote Internet Explorer pre-installed on PCs.

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About the company Global Super power Giant by year 2000 Microsoft holds a dominant position on the PC OS market Microsoft has a very high and stable market share Largest competitors: Apple Macintosh, IBM OS2 and Linux variants Barriers to entry are high: Cost of developing OS Applications barrier Market Share Windows 2000 -> 92% Ms-Word & Excel -> 94% Internet Explorer -> 95%
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MS aggressive chase to promote and maintain monopoly for Internet Explorer Used Supplier pressure & incentive tactics to achieve their goal. MS bound IE in Windows as an integral part by contract. Set strict limits for OEMs to re-configure in Win 95 & Win 98, this ensured IE binding to Windows. MS used incentives and licensing threats to OEM(PC-Makers) to include IE in their brand promotions, which intended Navigator exclusion from the market. MS created barriers via technical integrations & licensing agreement clauses to ensure that OEMs, which gave OEM & partners less or no choice other than IE.
IBM as an OEM announced to include Lotus on its manufactured PCs. Due to which Microsoft stripped them of their Win 95 License, covering up the move by masquerading it as an Audit license matter. IBM had to pay back licensing fee of 31m to regain position as a licensed OEM again. Was news just 15 mins prior to Win 95 launch Between 1994-1997 pressured IBM to reduce support for IBMs products that were competitor to Microsoft. Thats how they punished IBM
Yes the mighty Apple we know today! Apple relied on MS to develop their software for Macintosh (e.g.: QuickTime) Unsuccessful attempts made by Microsoft to pressure Apple to drop the project Microsoft threatened Apple to stop the development of Office-version of Macintosh, if Apple did not ship Internet Explorer as a standard in their every Mac. 1997, Apple endorsed Internet Explorer .
Compaq dared to remove IE & MSN icons from their PCs Microsoft showed intent to terminated their License for Win 95 Compaq surrendered! And thats not all..there is more drama Compaq turned around policy to favor and promised to promoted IE exclusively as pre-installed. Even better Compaq ceased the pre-install of Netscape Navigator. Microsoft gauranteed Compaq lower rate than any other OEM. Free internal use of all Microsoft product within Compaq since 1998.
Of course Microsoft has done wrongLegally! They have stifled innovation. No choice for users. Monopoly and un-healthy competition. Well, that's the aesthetic part of it..... Management wise: They could do it because no one else could! They had the management to do it. All the OEMs agreed for their gain! Other companies did not strategize against MS. They did not primarily sell the OS on basis of IE, it was just another part of the whole package.

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Microsoft Supplier Relations

  • 1. 油
  • 2. About the company Global Super power Giant by year 2000 Microsoft holds a dominant position on the PC OS market Microsoft has a very high and stable market share Largest competitors: Apple Macintosh, IBM OS2 and Linux variants Barriers to entry are high: Cost of developing OS Applications barrier Market Share Windows 2000 -> 92% Ms-Word & Excel -> 94% Internet Explorer -> 95%
  • 3. 油
  • 4. MS aggressive chase to promote and maintain monopoly for Internet Explorer Used Supplier pressure & incentive tactics to achieve their goal. MS bound IE in Windows as an integral part by contract. Set strict limits for OEMs to re-configure in Win 95 & Win 98, this ensured IE binding to Windows. MS used incentives and licensing threats to OEM(PC-Makers) to include IE in their brand promotions, which intended Navigator exclusion from the market. MS created barriers via technical integrations & licensing agreement clauses to ensure that OEMs, which gave OEM & partners less or no choice other than IE.
  • 5. IBM as an OEM announced to include Lotus on its manufactured PCs. Due to which Microsoft stripped them of their Win 95 License, covering up the move by masquerading it as an Audit license matter. IBM had to pay back licensing fee of 31m to regain position as a licensed OEM again. Was news just 15 mins prior to Win 95 launch Between 1994-1997 pressured IBM to reduce support for IBMs products that were competitor to Microsoft. Thats how they punished IBM
  • 6. Yes the mighty Apple we know today! Apple relied on MS to develop their software for Macintosh (e.g.: QuickTime) Unsuccessful attempts made by Microsoft to pressure Apple to drop the project Microsoft threatened Apple to stop the development of Office-version of Macintosh, if Apple did not ship Internet Explorer as a standard in their every Mac. 1997, Apple endorsed Internet Explorer .
  • 7. Compaq dared to remove IE & MSN icons from their PCs Microsoft showed intent to terminated their License for Win 95 Compaq surrendered! And thats not all..there is more drama Compaq turned around policy to favor and promised to promoted IE exclusively as pre-installed. Even better Compaq ceased the pre-install of Netscape Navigator. Microsoft gauranteed Compaq lower rate than any other OEM. Free internal use of all Microsoft product within Compaq since 1998.
  • 8. Of course Microsoft has done wrongLegally! They have stifled innovation. No choice for users. Monopoly and un-healthy competition. Well, that's the aesthetic part of it..... Management wise: They could do it because no one else could! They had the management to do it. All the OEMs agreed for their gain! Other companies did not strategize against MS. They did not primarily sell the OS on basis of IE, it was just another part of the whole package.