This has resulted in the most versatile and effective corporate workforce in existence during those days. In order to study this company in the strategic point standpoint, you have many aspects to look into. You need to learn their strategy in organizational management, product development, customer service and competitive environment.

Microsoft has worked hard in order to be innovative on their level of business from where they are in the late 80’s to where they are in the 90’s. Back then, Apple can be said to have an OS that is more innovative.

But, Microsoft was able to come up with Windows Vista and OSX which came really close enough. Also before, this company has not invented word processor, spreadsheets, presentation package and even database program. Today, it is an undeniable fact that Microsoft Office can be considered as the most dominant office application around.

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Indeed, Microsoft continues to dominate the computing universe. This can be attributed to the fact that their innovation strategy does not only mean extracting value from research and development internal efforts. It also means responding to the demands of the changing market with introduction of new products and acquiring innovative start-ups as well.

In the late 90’s it is reported to acquire numerous start ups which is a strong indication of its eagerness to show participation on the new markets. This move to be partner with entrepreneurial talents can certainly help them gain more competitive edge as well as up the company’s innovation quotient.

This innovation strategy is not a bad thing. There are numerous individual developers who are trying out almost every kind of idea just to get the respect of people on huge companies. It is true that innovations really come from individual developers and these people are the true source of innovative products.

However, it will need deep pocket companies such as Microsoft in order to successfully bring the innovative product in the market. By this strategy of acting as venture capitalists of these developers, Microsoft will surely have a long way to go.

However, the innovation strategy at Microsoft wherein they rely heavily on developers received criticism from analysts. At the depth of the recession, the dependence of Microsoft on their partner so as to bring innovation in the market has been seen as an asset becoming their competitive liability.

As the market clamors for product portfolio which will support the needs of the customers on specific geographies and industries, the hope of Microsoft to penetrate the mid-market was hinge by its inability to deliver a more specialized line of products.

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This innovation strategy has placed Microsoft on the competitive problem as when the partners ability to come up with growing portfolio for vertical solutions slump. The biggest competitors when it comes to driving innovation to the market have employed a totally different model in placing vertical capabilities on the hand of their customers. Neither of the models that were used faces potential risk as Microsoft’s.

SAP is a clear leader on vertical expertise and they tend to depend in the powerful combination of partner products and internal development for industry specific offerings. While the partner spending may also be at siege, their current model will allow it maintenance of sufficient amount of in-house innovations and invest on partners which can help them to bring the products to the market.

Oracles’ model can also be considered as recession-proof. While the company’s model makes consumers life a bit complicated as they need to support the code bases used, the economic pressure will make it possible for Oracle to purchase more of vertical products.

How these things will sort-out in the market is yet to be seen. However, it is very clear that Microsoft must be extra careful so that it will be able to keep the vertical innovation strategies on the track or they will decline on the competitive profile. This means impacting the partners as well. Critical mistakes are something which no one can afford to make at this time.

As one of the leading software development company around the globe, they should be more driven in extracting more value from the internal research and development efforts which will help in responding to the demands of the marketplace. Innovation strategy at Microsoft must be anchored on their passion to help people achieve their goals through the technology that they design.

They should have clearly defined values which guide their operations as the only survivors in this market are those who can maintain the original zest that they once have.

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