Case Study Lego : Embracing Change by Combining BI with a Flexible Information System

  
INTRODUCTION

The name 'LEGO' is an abbreviation of the two Danish words "leg godt", meaning "play well". It’s our name and it’s our ideal. The LEGO Group was founded in 1932 by Ole Kirk Kristiansen. The company has passed from father to son and is now owned by Kjeld Kirk Kristiansen, a grandchild of the founder. It has come a long way over the past almost 80 years - from a small carpenter’s workshop to a modern, global enterprise that is now, in terms of sales, the world’s third-largest manufacturer of toys.

The LEGO brick is our most important product. This is why we are proud to have been named twice – “Toy of the Century”. Our products have undergone extensive development over the years – but the foundation remains the traditional LEGO brick. The brick in its present form was launched in 1958. The interlocking principle with its tubes makes it unique, and offers unlimited building possibilities. It's just a matter of getting the imagination going – and letting a wealth of creative ideas emerge through play.

LEGO is a popular line of construction toys manufactured by The Lego Group, a privately held company based in Billund, Denmark. The company's flagship product, LEGO, consists of colorful interlocking plastic bricks and an accompanying array of gears, mini figures and various other parts. LEGO bricks can be assembled and connected in many ways, to construct such objects as vehicles, buildings, and even working robots. Anything constructed can then be taken apart again, and the pieces used to make other objects. LEGO began manufacturing interlocking toy bricks in 1949. Since then a global LEGO subculture has developed, supporting movies, games, competitions, and six themed amusement parks. As of 2013, around 560 billion LEGO parts had been produced.

Question 1 : Explain the role of the database in SAP's three-tier system

·         SAP’s business suite is based on a flexible three-tier client-server architecture that can easily be adapted to the new Service-Oriented Architecture (SOA) available in the latest versions of the software. 

·         In the first tier, a client interface-a browser-type graphical user interface (GUI) running on either a laptop, desktop, or mobile device-submits users’ requests to the application servers. The applications servers send the processed requests to the database system-receive and process clients’ requests to the database system-the third tier-which consists of one or more relational databases

·         The main role of the database is as an information storage system. The relational database contains the tables that store data on LEGO’s products, daily operations, the supply chain, and thousands of employees.  

·         Using the SAP query tool, users are able to toggle and tabulate data and extract reports from the database.  Therefore the database’s role is also as a reports generator.

Question 2 : Explain why distributed architectures are flexible

·         A distributed architecture system is a software system in which components located on networked computers communicate and coordinate their actions by passing messages. The components interact with each other in order to achieve a common goal.  Data may be stored in multiple computers, located in the same physical location; or may be dispersed over a network of interconnected computers.  A distributed database can reside on network servers on the Internet, on corporate intranets or extranets, or on other company networks. 

·         Because they store data across multiple computers, distributed databases can improve performance at end-user worksites by allowing transactions to be processed on many machines, instead of being limited to one. Users from different parts of the world may access the same data.  Therefore they are more flexible in terms of availability to users.  

·     They also bank on an improved performance of the machines, as data is located near the site of greatest demand, and the database systems themselves are parallelized, allowing load on the databases to be balanced among servers. A high load on one module of the database won't affect other modules of the database in a distributed database

·         They are also more flexible for purposes of expansion of the database and transparency, as the data can be monitored on site of the specific computers as the data is potentially stored within the departments they relate to.  There is local autonomy or site autonomy, where a department can control the data about them (as they are the ones familiar with it).  

·         They are economically flexible and may cost less to create a network of smaller computers with the power of a single large computer.  Systems can be modified, added and removed from the distributed database without affecting other modules (systems).

Question 3 : Identify some of the business intelligence features included in SAP's business software suite.

• Supply Chain Management (SCM)  :  Supply chain monitoring and analysis as well as forecasting, planning and inventory optimization
•  Product Lifecycle Management (PLM) :  Enable managers to optimize development process and system.
• Enterprise Resources Planning (ERP):  Include Human Capital Management (HCM) application for personnel administration and development.

Question 4 : What are the main advantages and disadvantages of having multiple databases in a distributed architecture?  Explain.

Advantages

• Multiple database contains the tables that store data on product, daily operation, supply chain and thousands of employees
•   Managers can easily use the SAP query tool to obtain reports from the database because it does not require any technical skills
• Distributed architecture enables authorized personnel to have direct access to database system from the company’s various location including in Europe, North America and Asia

Disadvantages

• The additional overhead of these transactions can be a performance penalty when the total amount of data in the network is small. Users also see slower performance when accessing data that is not local  
• Increased the use of database space. Every table must exist in every database. When the number of tables is very large, the amount of space used can be significant. Administrators must use database storage parameters to size tables and reduce database space consumption.
• Administrators must keep the schemas of all database synchronized and ensure that the network is configured to take optimal advantage of the distributed-database environment in term of availability and performance. Although database backups are more flexible in a distributed-database environment, multiple databases add complexity to the backup process.

Case Study Apple, Google and Microsoft Battle for your Internet Experience

INTRODUCTION

APPLE

Apple Inc. is an American multinational corporation headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and personal computers. Its best-known hardware products are the Mac line of computers, the iPod media player, the iPhone smartphone, and the iPad tablet computer. Its consumer software includes the OS X and iOS operating systems, the iTunes media browser, the Safari web browser, and the iLife and iWork creativity and productivity suites.

Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976, to develop and sell personal computers. It was incorporated as Apple Computer, Inc. on January 3, 1977, and was renamed as Apple Inc. on January 9, 2007, to reflect its shifted focus towards consumer electronics.

Apple is the world's second-largest information technology company by revenue after Samsung Electronics and the world's third-largest mobile phone maker after Samsung and Nokia. Fortune magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2012. On September 30, 2013, Apple surpassed Coca-Cola to become the world's most valuable brand in the Omnicom Group's "Best Global Brands" report. However, the company has received criticism for its contractors' labor practices, as well as for its own environmental and business practices.

As of May 2013, Apple maintains 408 retail stores in fourteen countries, as well as the online Apple Store and iTunes Store, the latter of which is the world's largest music retailer. Apple is the largest publicly traded corporation in the world by market capitalization, with an estimated market capitalization of $446 billion by January, 2014. As of September 29, 2012, the company had 72,800 permanent full-time employees and 3,300 temporary full-time employees worldwide. Its worldwide annual revenue in 2013 totalled $170 billion. As of Q1 2014, Apple's five-year growth average is 39% for top line growth and 45% for bottom line growth. In May 2013, Apple entered the top ten of the Fortune 500 list of companies for the first time, rising 11 places above its 2012 ranking to take the sixth position.

GOOGLE

Google is an American multinational corporation specializing in Internet-related services and products. These include online advertising technologies, search, cloud computing, and software. Most of its profits are derived from AdWords.

Google was founded by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University. Together they own about 14 percent of its shares but control 56 of the stockholder voting power through super voting stock. They incorporated Google as a privately held company on September 4, 1998. An initial public offering followed on August 19, 2004. Its mission statement from the outset was "to organize the world's information and make it universally accessible and useful", and its unofficial slogan was "Don't be evil". In 2006 Google moved to headquarters in Mountain View, California, nicknamed the Googleplex.

Rapid growth since incorporation has triggered a chain of products, acquisitions and partnerships beyond Google's core search engine. It offers online productivity software including email (Gmail), an office suite (Google Drive), and social networking (Google+). Desktop products include applications for web browsing, organizing and editing photos, and instant messaging. The company leads the development of the Android mobile operating system and the browser-only Chrome OS for a netbook known as a Chromebook. Google has moved increasingly into communications hardware: it partners with major electronics manufacturers in production of its high-end Nexus devices and acquired Motorola Mobility in May 2012. In 2012, a fiber-optic infrastructure was installed in Kansas City to facilitate a Google Fiber broadband service.

The corporation has been estimated to run more than one million servers in data centers around the world (as of 2007) and to process over one billion search requests and about 24 petabytes of user-generated data each day (as of 2009). In December 2013 Alexa listed google.com as the most visited website in the world. Numerous Google sites in other languages figure in the top one hundred, as do several other Google-owned sites such as YouTube and Blogger. Its market dominance has led to prominent media coverage, including criticism of the company over issues such as copyright, censorship, and privacy.

MICROSOFT

Microsoft Corporation is an American multinational corporation headquartered in Redmond, Washington, that develops, manufactures, licenses, supports and sells computer software, consumer electronics and personal computers and services. Its best known software products are the Microsoft Windows line of operating systems, Microsoft Office office suite, and Internet Explorer web browser. Its flagship hardware products are Xbox game console and the Microsoft Surface series of tablets. It is the world's largest software maker measured by revenues. It is also one of the world's most valuable companies.

Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975 to develop and sell BASIC interpreters for Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by the Microsoft Windows. The company's 1986 initial public offering, and subsequent rise in its share price, created an estimated three billionaires and 12,000 millionaires from Microsoft employees. Since the 1990s, it has increasingly diversified from the operating system market and has made a number of corporate acquisitions. In May 2011, Microsoft acquired Skype Technologies for $8.5 billion in its largest acquisition to date.

As of 2013, Microsoft is market dominant in both the IBM PC-compatible operating system and office software suite markets (the latter with Microsoft Office). The company also produces a wide range of other software for desktops and servers, and is active in areas including Internet search (with Bing), the video game industry (with the Xbox, Xbox 360 and Xbox One consoles), the digital services market (through MSN), and mobile phones (via the Windows Phone OS). In June 2012, Microsoft entered the personal computer production market for the first time, with the launch of the Microsoft Surface, a line of tablet computers.

With the acquisition of Nokia's devices and services division to form Microsoft Mobile Oy, the company will re-enter the smart-phone hardware market, after its previous attempt, Microsoft Kin, which resulted from their acquisition of Danger Inc. Microsoft Corporation is a software company based in Redmond, Washington. Microsoft's flagship product, the Windows operating system, is the single most popular operating system for home desktop use. Its other desktop products, namely Microsoft Office, Internet Explorer, and Windows Media Player, are either bundled directly with the Windows operating system, or are often sold together with Windows as preinstalled software on new computer systems. Additionally, the company manufactures and sells computer hardware such as keyboards and mice, and owns or possesses interest in several content-distribution channels such as MSNBC, the MSN Internet portal, and the Microsoft Encarta electronic encyclopedia.

The Microsoft Windows operating system started life as an optional addition to the MS-DOS operating system. The idea of a graphical user interface was pioneered by Apple Computer's Apple II and Macintosh. However, due to prior work with IBM, Microsoft successfully convinced the hardware giant to ship Microsoft Windows preinstalled on IBM personal computers. This monumental step had piggybacked Windows to be one of the most recognized software titles in history. The Microsoft Office suite of applications (Word, Excel, Powerpoint, and Access) began life as Microsoft Works, an Apple Macintosh application that provided the functions of a word processor, spreadsheet, and database all in one. Microsoft's popular Internet Explorer web browser was originally a rebranded version of Spyglass Mosaic.

Microsoft products have traditionally been plagued with security problems, leading to an entire malicious software industry today. Although all major operating systems and computer programs have been subject to attack at one time or another, Microsoft's latency at resolving issues, and the simple number of them, has tarnished the company's image. Microsoft has a policy of releasing patches to its software on the second Tuesday of every month via Microsoft Update, with no more than 10 major changes to its products at those times. Thus, exploits that are discovered around mid-month are not corrected for at least four weeks, and in many cases eight or twelve weeks can go by before a patch is released for a security issue. Microsoft Corporation has promised that its new Windows Vista operating system will be more secure than previous offerings such as Windows XP, however the ten patches a month policy has not been changed.

SWOT ANALYSIS

APPLE

Strengths

• Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.
•  Apple is a leading innovator in mobile device technology. Apple has been chosen as the most innovative business in the world for the 3rd time in 2012. Company’s core competency of producing innovative products is the strength the company builds upon.
• Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.
•  Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound business performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
• Retail stores. Apple’s retail stores ensure high quality customer experience; provide direct contact with knowledgeable staff and increases brand awareness. Besides, Apple’s stores are one of the most profitable in terms of sales/ft2.
• Strong marketing and advertising teams. Marketing is one of the strongest functional areas Apple has. It can sell pricier products, build superior stores (they are more or less built to achieve marketing goals) and advertise their products in a compelling manner.

Weaknesses

•  High price. Apple’s products cost much more than its competitors devices. Some critics argue that the price is not justified. When there’s such a fierce competition, Apple products price becomes a weakness because consumers can easily opt for similar quality but lower price products.
• Incompatibility with different OS. The iOS and OS X are quite different from other OS and uses software that is unlike the software used in Microsoft OS. Due to such differences, both in software and hardware, users often choose to stay with their accustomed software and hardware (Microsoft OS and Intel hardware).
• Decreasing market share. The less market share Apple has, the less it can influence its potential customers and persuades them to jump into using Apple’s closed ecosystem products.
• Patent infringements. The firm is often accused of infringing other companies’ patents and has even lost some trials. This damages Apple brand and its financial situation.
•  Further changes in management. Apple has lost Steve Jobs in 2012 and Tim Cook became the new CEO. Scott Forstall and John Browett (chief of retail) left the company too and this will have an impact on company’s management, which, as many think, will be negative. 
•  Defects of new products. This is not current Apple weakness but one that jumps out time to time. Some of Apple’s iPod and iPhone releases had clear faults and thus disturbed sales of the products and firm’s reputation of superior product performance.
• Long-term gross margin decline. Current Apple’s gross margin is one of the highest in the tech industry but analysts fear that due to increasing component prices and competition current margins will not be sustained. Hence, gloaming firm’s future financial performance.

Opportunities

•  High demand of iPad mini and iPhone 5. iPad mini sales will increase Apple’s market share in the tablet market and, will strengthen firm’s competitive advantage.
•   iTV launch. iTV launch will support Apple TV sales and the products’ ecosystem.
• Emergence of the new provider of application processors. Samsung, the main Apple’s competitor, is also the only provider of application processors for Apple’s products. Apple has to find a new source for the component but could not find a suitable one yet. Nonetheless, new manufacturers with superior engineering capabilities are arising and it’s just a matter of time, when Apple will seize upon the opportunity of being less dependent on its direct competitors.
• Growth of tablet and smartphone markets. Growth of tablet and smartphone markets is a good opportunity to expand firm’s share in these markets.
• Obtaining patents through acquisitions. Apple lacks of some patents to sustain its growth and the best way to acquire those patents is to acquire the firms holding them. In addition, Apple could develop new skills and competencies.
• Damages from patent infringements. Apple patents are often infringed by its competitors. Thus, collecting the damages from the companies that do so is a viable opportunity to not only increase the cash reserves but to damage the competitor’s reputation and sales as well.
•  Strong growth of mobile advertising market. Apple has developed iAd advertising platform, which allows advertising on Apple iPhone, iPad and iPod touch. The growth of mobile advertising market is an opportunity which could be further seized upon. 
•   Increasing demand for cloud based services. Apple could expand its range of iCloud services and software as the demand for cloud-based services is expanding.

Threats

• Rapid technological change. One of the most severe threats Apple and the other tech companies are facing is rapid technological change. Companies are under the pressure to release new products faster and faster. The one that cannot keep up with the competition soon fails. This is especially hard when a business wants to introduce something new, innovative and successful. Apple was able to bring very innovative products to the market so far but for the moment, even Apple hasn’t unveiled any plans for the new products (except iTV) and may lack new introductions to keep up with competition.
• 2013 tax increases. Tax increases in USA in 2013 will negatively affect Apple.
• Rising pay levels for Foxconn workers. Pay levels for Foxconn’s workers already rose 3 times from 2010 to 2012. Foxconn is the main manufacturer of Apple products and the rising pay level for Foxconn’s workers will likely raise the prices for Apple products.
• Breached IP rights. The companies that breach Apple patents might not be discovered soon and may benefit from it, while weakening Apple at the same time.
• Price pressure from Samsung over key components. Samsung has already asked Apple to pay higher price for its application processors. Due to intense competition and no viable substitutes, Apple may be asked to pay even more.
• Strong dollar. Apple earned more than half of its revenues from outside US. Dollar appreciation against other currencies reduces potential profits from those countries.
•  Android OS growth. Android OS is the main competitor for iOS in mobile device market. The domination of Android decreases iOS power over influencing consumers to join Apple.
• Competitors’ moves in online music market. Apple faces threat from online music stores, such as Amazon, Wal-Mart and online music subscription companies, such as Spotify.

GOOGLE

Strengths

• Open source products and services. As the company states:” Google’s mission is to organize the world’s information and make it universally accessible and useful.” The same is with almost any of Google products. Let it be Google maps, calendars, drive, OS or the advices how to rank better in a search index. Google’s products can also be used with any OS or mobile device without a charge. Google openness is the key why Google is the number one in many products and services.
• Quality and customer experience are the primary objects. Everything that Google offers is of premium quality. The products are aimed at solving customer needs and problems by providing excellent customer experience.
• Financial situation. Google is one of the most profitable companies in the world with earnings nearly $50 billion and $11 billion profits (22%). The company also holds $48 billion in cash and just $7 billion of debt. Few other companies are so strong financially to compete with Google.
• Access to the largest group of internet users worldwide. Google has an access to 79% of the world desktop search market users and 89% of the world mobile search market users. Combined, these internet users represent an extremely large market that Google can use to promote and sell its products and services.
• Strong patents portfolio. In 2012, Google added 1,151 patents and was the 21st business worldwide in terms of number of patents. Intellectual property is the key in competing against competitors and Google with Motorola’s acquisition gained a strong advantage over its competitors.
•  Product integration. Nearly all Google products are integrated with each other forming an ecosystem that enriches customers experience and encourages using more of company’s products and services. Besides, Google products can be used on any OS or any device without a trouble or can be integrated with other companies’ applications. No other major tech organization offers the same level of integration.
• Culture of innovation. Many unique products are offered by Google every year, with so many in development stages. According to Boston Consulting Group (BCG) Google is the 2nd most innovative business in the world. The company was also the second patent creator in the worle in 2012. Google emphasizes its innovative work culture as one of its main competitive advantages.

Weaknesses

• Relies on one source of income. More than 90% of Google’s revenue comes from online advertising. Online advertising is expected to grow in double digits in 2013 and will grow Google’s income in the short term. But in the long run, Google may experience slow income growth or even the decline due to a few reasons. First, the market for personal computers is growing slowly and the Google experiences the overall decline in its desktop search engine market. If Google won’t push the competition back it will lose not only the market share but the main source of its income as well. Second, Google as many other firms, find it hard to monetize mobile device users, who will represent the highest growing group in online advertising. Third, online advertising growth is driven by emerging economies where an average price for an advertisement is considerably lower than in the developed economies, so the growth of online advertising will only grow the income of companies insignificantly.
• Unprofitable products. Google has many products and services that add little value for the business and make only losses, thus decreasing firm’s profits.
• Patent litigation's. Google is often involved in litigation's over the breached patents and other intellectual property. These litigation's are costly and time consuming and distract the company from innovating rather than litigating.

 Opportunities

•   Growing number of mobile internet users. Google has an opportunity to create a platform that could be used to better display ads for mobile device users and increase firm’s income.
• Obtaining patents through acquisitions. For Google to grow and to compete successfully, it has to obtain more new patents. One way of doing that is to acquire companies that have strong patents portfolio. Google has acquired Motorola in 2012, obtaining more than 17,000 patents from the business.
• Driver less electronic cars. Google has introduced and successfully tested driver less cars in Nevada, U.S. The technology of these cars could easily be installed in any future model and would be a huge technological step. Although, Google has no intentions of manufacturing such cars itself, the company could sell licenses for car manufactures for using their technology and IP.
• Growing into electronics industry. Google has already launched a few new models of notebooks, tablets and smartphones into the market but these were only introduction models. Google could strengthen its entry into electronic devices industry by introducing more products for more customer groups and cut out its market share. This would result in tighter integration of its software products and diversified income.
• Google fiber cables. Google is currently testing their new fiber cables that can deliver internet content at astonishing 100 times as fast as current providers. It is wise for Google to invest in such infrastructure that virtually would have no competition and would integrate the company vertically.

Threats

• Growing number of mobile internet users. Google finds it hard to monetize mobile internet users as there is less space to place ads on a mobile device and the ads costs less than usual. The growing number of mobile users means fewer searches made on the personal computers and lower income growth or even decline for Google.
• Unprofitable products. Google has introduced many products and services but few of them earn profits for the business. Most of the services are the burden for Google and only makes losses. If Google continues to introduce new products that add little value and only make losses, the company’s profits will fall.
• EU antitrust laws. Google is currently accused by EU of using its dominating position in internet search engine market to display its own services higher than competitors’ in search results. If proved guilty, Google would have to pay fines that would significantly lower firm’s profits.
• Competition from Microsoft. Microsoft is gaining a market share in internet searches and is playing an important role against Google. The company has also introduced Windows 8, the OS aimed for mobile devices, to carve out its market share in mobile OS market. In both fronts, internet search and mobile OS, Microsoft is challenging Google and is taking away the potential revenues

MICROSOFT 

Strength

• Brand loyalty. Over the years, Microsoft has been the leading OS and software provider, which resulted in more than 90% market share for PC OS. Most of us grew up using its easy to use OS, are familiar with it and will keep using it. Few other brands are capable to compete with Microsoft for this reason. Even open source OS, which are completely free and well suited to use for common user, find it hard to attract users.
• Brand reputation. According to Interbrand, Microsoft’s brand is the 5th most valuable brand in the world, valued at $ 57.8 billion. Forbes listed the corporate as the 7th most reputable business in the world. Brand reputation leads to higher sales and greater market share.
• Easy to use software. Windows OS and Office software products are so popular not just because Microsoft has great monopolistic power, strong distribution channels and good brand reputation but also because its products are of great quality and really easy to use.
• Strong distribution channels. The company works with all the major computer hardware producers such as Lenovo, Dell, Toshiba and Samsung and major computer retailers to make sure computers would be sold with already pre-installed Windows software. The company also invested in Dell and Nokia to tighten its relationships with these companies.
• Robust financial performance. Microsoft grew its revenues by 20% from 2008 to 2012 and holds more than $63 billion of cash and cash equivalents that can be used for acquisitions and substantial investments into R&D. 
•  Acquisition of Skype. With nearly 300 million users, Skype is a significant boost to Microsoft’s online presence and have a lot of potential in generating income from online advertising.

Weaknesses

• Poor acquisitions and investments. Few of Microsoft’s acquisitions were successful and brought not just revenues and products but new skills and competencies to the company. Massive, LinkExchange, WebTV, Danger are just few examples of multimillion acquisitions made by Microsoft but soon shut down or divested.
• Dependence on hardware manufacturers. Microsoft is a giant software corporation but it does not produce its own hardware and depends on computer hardware manufacturers to develop products that run Windows OS. If cheap and popular alternative OS would appear, hardware manufacturers may simple choose the alternative and Microsoft could do little to change the situation.
• Criticism over security flaws. Windows OS, the main Microsoft product has been heavily criticized for being so weak against various viruses’ attacks. Compared to other OS, Windows is the least protected against such attacks.
• Mature PC markets. Only recently has Microsoft entered the mobile technology sector and still heavily depends on its OS and software sales for standalone and laptop computers. The market for these products has matured and Microsoft will find it harder to grow revenues in these sectors.
• Slow to innovate. Microsoft has huge R&D resources and great position to enter new markets with innovative products but constantly failed to do so. It had an opportunity to be the first player in online advertising but missed the opportunity. It’s entrance to mobile OS was also too late, while Google and Apple captured the market share.

Opportunities

• Cloud based services. Microsoft could expand its range of cloud services and software as the demand for cloud-based services is expanding.
• Mobile advertising. Mobile advertising markets are expected to grow in double digits over the next few years and Microsoft has a great opportunity to tap into these markets with its mobile OS.
• Mobile device industry. Smart-phones and tablets markets will grow steadily over the next few years and Microsoft could exploit this opportunity by introducing more of its own tablets and a new company phone. 
•  Growth through acquisitions. With a huge reserve of cash Microsoft could start acquiring new start ups that would bring new technology, skills and competences to the business.

Threat

• Intense competition in software products. Microsoft is more than ever on the pressure to introduce successful OS both in PC and mobile markets as such competitors like Google and Apple have already established positions.
• Changing consumer needs and habits. Customers shift from buying laptops and standalone PCs to buying smart-phones and tablets, the markets, where Microsoft has only a modest market share and may never establish itself.
• Open source projects. Many new open source projects are coming to the market and some of them became quite successful, such as new Linux OS and Open Source Office. Open source projects are free and so they can become an alternative to expensive Microsoft’s products.
• Potential lawsuits. Microsoft has already been sued for many times and lost quite a few large scale lawsuits. Lawsuits are expensive as they require time and money. And as Microsoft continues to operate more or less the same way, there is high probability for more expensive lawsuits to come.

Question 1 : Compare the business models and areas of strength of Apple, Google, and Microsoft.

Apple:  

It has the basis of creating a very strong hardware base for the internet future and thus logically they play their role in this battle by laying emphasis on the hardware that facilitates mobile computing. Apple has gone into the stance that applications, one of the major earners for tablet and phone manufacturers, should be device restricted. For example, one application should be unique to the brand of the device and should be allowed to function in another device from another separate brand. They even stopped Google in its plans to allow Google applications to work on Apple products. Thus by doing this Apple is trying to capitalize on their loyal customer base and create a Apple weds Apple scenario. Its business model focuses on centralized control of almost all aspects of its hardware and software. It believes smart-phones and tablets should have proprietary standards and be tightly controlled. It only allows apps from its App store that have been vetted by the company, to be loaded to its products. Apple has a very loyal user base that has steadily grown and most likely will stay with Apple products in the future.

Google:

 

Google is the believer in the concept that in the future the devices used to run the applications and other internet options should be a fraction of what they are being charged now and instead the revenues generated should be from the in-app advertisements. Google even bought AdMob, an application advertisements development company, to work on such a concept. This future, Google and Microsoft have tried their hand at going hardware friendly but they still do not put the same emphasis on the hardware as Apple. Its business model has always focused on the Internet and the Web. It began as one of many search engines. It quickly ran away from the pack with its copyrighted Page-Rank search algorithm which returns superior search results for Web users. It also has developed extensive online advertising services for businesses of all sizes. Google provides value to the user by using an inexpensive, flexible infrastructure to speed up Web searches and provide its users with a vast array of Web-based services and software tools.

Microsoft:

 

Microsoft has laid its bet on the operating system on which the mobile computing devices shall run. Microsoft also has announced plans to develop the hardware for mobile computing, something it has not done so far, and thus has entered into the field of both Google and Apple. By integrating the hardware and software deal Microsoft has actually change the dynamics of the whole market. And this can be problem some for Google and Apple as they shall have to change their own perspective and outlook towards the level of competition that they shall have to face in the coming years in mobile computing. : Its business model originally focused on the desktop computer running the Windows operating system and Office desktop productivity applications. The company and its products are staples for businesses and consumers looking to improve their productivity with computer-based tasks. While it is trying to expand its presence on the Internet, it still must try to keep customers bound to the desktop computer.

Question 2 : Why is mobile computing so important to these three firms? Evaluate the mobile platform offerings of each firm.

Mobile computing is basically doing the activities which involve internet without being fixed to a particular place. The importance of mobile computing for all the three mentioned firms which is Apple , Google and Microsoft as it is the future of the internet technology and for these firms to  flourish and expand they need to be very effective with mobile computing.

Apple:

The mobile platform that Apple provides with its products is “iOS” (Kevin K, 2012). This mobile platform is the closed platform that is it is applicable for apple products and only apple apps could work on this. 

Some of the remarkable features amongst them are:

• There is an option over which you can reply later on the calls which you can’t take immediately.
•   Integration with the facebook over which you can share all you iphone activities
•   There is a passbook app through which you can use you iphone as a credit card.
•   There is also an up-gradation of the apple maps app which is very impressive.

Google:

The mobile platform that Google provides is “Android”. This mobile platform is a universal platform or you can say it’s an open platform when compared to the mobile platform offered by Apple. The latest version provided by the Android software is the version 4.1 “jelly bean” (Android, 2012). 

Some of the notable features of this version are:

• A simple screen swipe would provide you with search results related to Google.
• The voice recognition tool in this version would rub offline.
• Another of the new feature is GOOGLE NOW in which the preferences are chosen based on the data like the time location and personal history and over this the search results are provided

Microsoft:

Microsoft is entering this market recently by launching the tablet named “Surface tablet”. The mobile platform that Microsoft is offering is the Windows Phone 8 (Kevin K, 2012). This operating system will be compatible with the laptops and the desktops.

Some of the unique features of this operating system are:

• Support dual core chips
• Support multiple screen resolution
• Provides advanced map technology
• Offers Passbook wallet.

Question 3 : What is the significance of mobile application, app stores, and closed versus open app standards to the success or failure of mobile computing?

Any computer software that performs specific tasks is called Applications (Bovee 2012, p 256). Apps greatly enrich the experience of using a mobile device, and without them, the predictions for the future of mobile Internet would not be nearly as bright. They can range from large business computer programs such as “Sun Systems” for processing large accounting problems to a simple program that can be used to order something as simple as a pizza, in today’s world applications have become a part and parcel of the day today.

Today’s mobile and tablet users are becoming more and more inclined towards a product which has more number of application than the other product option. Although it can be said that such a thing has happened because of the fact that the devices today have become so specified that a certain range of products shall have the same specs regardless of their make. This change can be determined as a major shift in the consumer psyche and even the big three have not underestimated this change.

The development of applications and software’s to match these expectations is a task that all the companies in the fray to be the leader in the mobile computing market, wither it be Apple, Google, Microsoft or any other new player, shall have to look into great detail and precision.

The importance of mobile applications can be justified on this basis itself that Google has based their future growth prediction on the very same. Mobile applications have such a great scope of growth in the future that they can one day eclipse the sales of the hardware part of mobile computing and form a major market themselves here players like Google and apple shall have tough competition even from small fray players if a common platform for application usage is formed, the very same reason why Apple is resisting Google’s repeated efforts for a common mobile platform.

According to experts (Kevin, Timothy et.al) mobile applications are even today a big part of the on the go access market. Finish mobile giant Nokia too has a say in the application future as it still has the lion’s share in the applications that are used in its mobile phones, which in spite of the recent drop are a very big number. Applications and app stores are also being viewed as a source of major entertainment by many users of mobile computing devices, with games like angry birds and temple run taking the market by storm it is very evident that applications and app stores are a thing for the future.

Lastly it can be said that although all three firms have great opportunity in the market which is still young and in its infancy, the first mover shall have very definitive advantage to take control of this veritable goldmine.

Question 4 : Which company and business model do you think will prevail in this epic struggle? Explain your answer.

Google: 

The search engine giant has a lot of positives going for it rather than the negatives. The clear positives that can make it a winner are:

A well-established name is something which not a lot of players can boast of but Google is one of them, although Apple and Microsoft have chartered territories of their own but Google can fight them out both as an equal if not better.

The Company has entered into all the three basic markets of mobile computing including hardware, operating system and the application stores. Their hardware is something which a few competitors can best , however the Android operating system has taken the market by storm and the app store which comes with it is a mean bully in itself (Android 2012)

Google has also bet on of the most time relevant feature of the mobile computing market, the App store, and this is the biggest advantage which the Google business model gives it and makes it the prime contender for the number one position. With hundreds of applications already online and hundreds more in the development stage Google has started to take a sort of lead on the other players in the race to be number one. And this may not be decisive right now but with Google’s recent acquisition of application developers and their heavy R&D expenditure on the same, it is just a matter of time before it will take out companies like Apple and Microsoft. (Android 2012)

Although the Google bandwagon is on its way there are certain roadblocks that it can face that can halt its march and some of them are:

The Google brand is big but it still lacks the appeal of an Apple product and this many say is one of the most major difference between the two.

The Android system although perfected to a large extent still has a few errors in the new versions that can hamper the growth of the operating system and this where a competitor like Microsoft can prevail over the Company

Lastly it can be said that Google’s move towards a common mobile application platform can itself backfire and could increase competition from local app players which can affect the overall profitability from this step.

Thus it can be said that Google does have a lot of positives that can help it in the market and if it can take care of the negatives and maybe tweak the one platform stance, it can just pull ahead of Apple and Microsoft in this battle of the behemoths.

Question 5 : What difference would it make to a business or to an individual consumer if Apple, Google, or Microsoft dominated the Internet experience? Explain your answer.

Consumers would be forced to buy only one product and use only one service. They would create a monopoly and the positive would be they would create a standard. This would affect quality; prices would be as high as possible because they would have no competition.

 No competition means nobody could force a monopolist from the outside to improve products, diversify rang or products and lower price. Right now it is too early to tell who would dominate the internet experience but it is good to have competition than just one market leader. Right now Apple leads Google in the number of apps available to users. 

That gap is closing quickly thanks to Google’s improvements of the Android operating system and its encouragement to app developers. Open, non-proprietary systems historically have beat closed, proprietary systems because developers and users have a wider range of choices. Business managers must try to forecast which platform will provide the right choices for employees. Consumers must choose which platform will best fulfill their personal needs for the next two to three years. Switching costs play into both scenarios, not just in terms of phone purchases but the price of apps. Once a user purchases and adjusts to using a certain platform it’s difficult and expensive to switch to a whole different system.

CONCLUSION

By the year 2000, the Internet has already become a multibillion dollar industry with Apple, Google and Microsoft being its major player. By this time, the direction of Internet’s further development has also already been set. The internet was showing signs of becoming the melting pot of media and entertainment, business and workforce collaboration, telecommunication, knowledge and other market. Apple, Google and Microsoft were the first most successful in taking action to integrate massive service in their product worlds. In the year 2000, when stock price of Internet showing down, they found themselves as strong survivors within a deeply distressed industry. This situation offers a rich menu of opportunities. The various IT firms were for sale or willing to cooperate under more favorable conditions. By this opportunities, Apple, Google and Microsoft set out to adjust positioning and capabilities in preparation of the inevitable recovery of the Internet.