CS37420 E-commerce
The Four Giants
A brief overview of Microsoft, Apple,
Google and Amazon
Introduction
• Companies started before internet
o Microsoft
o Apple
• Companies started after the internet
o Google
o Amazon
Internet as driving force
• All four companies are global players
• Rely heavily on the internet
• All four are in competition with one another, one
way or another
• Software based organisations becoming hardware
vendors
• All looking to participate in digital content and
digital services
Microsoft
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Founded 1975
HQ in Redmond, Washington State, USA
Founded by Bill Gates and Paul Allen
CEO – Steve Balmer
Revenue 2012 - $74Bn
Employees - 94,000
History
• 1975 - Wrote BASIC interpreter for Altair 8800
microcomputer
• 1980 – Won contract from IBM to supply new OS for
the new IBM PC
o (Bought CP/M clone and then modified it calling it MS-DOS. IBM called it
PC-DOS)
• 1983 – Paul Allen resigned due to ill health
• MS – Word (for MS-DOS) featured mouse control
and soft-keys
• 1984 – First release of Windows but MS-DOS
remained leader until 1990s
History continued
• 1985 – 1995 – Microsoft Office launched and
becomes dominant office suite
• 1995 – Having being slow to react to the growth of
the Internet, MS launches Windows 95 with IE
Explorer bundled in
• 1996-2005 – Big problems with monopoly and anti
trust accusations. Microsoft found guilty in many
cases
• 2001 – Xbox launched
o Xbox
o Xbox360
o Kinect
24 million units
74 million units (Stats at Sept 2012)
19 million units
Present (2012)
• Healthy business
• New releases:
o Windows 8
• Runs on PCs, phones and tablets
o Office 2013
• Still a massive success
o Surface tablet
• Typical Microsoft – launch after announcement
o Xbox 360
• As hub for home entertainment and computing
Future Strategy
• MS has huge involvement in cloud computing
• SkyDrive
o Core part of Windows 8
o Tight integration in Office 2013
• Office 365 services
o It is secure, anywhere access to email and calendars, Office Web Apps,
instant messaging, conferencing, and file sharing
o Subscription based (£4.50 per month)
o Fundamental to Office 2013
• Azure is moving entire server farms into the cloud
o Storage, computing, websites, connectivity in cloud
o Complete enterprise solutions
Strategy continued
• Move towards services
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Add value to software offerings
Become solutions orientated
Corporate ERP and CRM systems. Take on Sales Office in CRM
Remain as major corporate supplier of software
• Enter desktop/tablet market
o Corporates now looking to invest in tablet technology
o Windows 8/Office 2013 on Surface platform (with keyboard) now very
attractive
• Become centre of home entertainment
o Xbox360 for video streaming
o Xbox360 linked to Windows 8 phones controllers and Surface tablets as
information hubs
Footnote
• Microsoft, without any philanthropic drive,
democratised the PC and the use of the Internet
• Bill Gates and his wife, Melinda, have set up the
Melinda and Bill Gates Foundation. They have
contributed $28billion so far. Warren Buffet will pay
in over $32billion
• Estimates vary but it looks like the Foundation has
saved the lives of 5,000,000 kids so far
• It is estimated Gates has another $56 billion left. His
kids get $10,000,000 each. All that remains in the
estate after what Melinda gets will go to charity
Apple
• Founded 1977 as Apple Computer, Inc (now Apple,
Inc)
• Cupertino, Ca, USA
• Originally founded by Steve Jobs, Steve Wozniak
and Ronald Wayne. Wayne sold shares back on
going public
• CEO – Tim Cook
• Revenue 2012 - $156.5Bn (> 2x Microsoft)
• Employees - 73,000
• Currently largest publicly traded company in the
world
History
• 1976 - Apple I
• 1977 - Apple II
o First “killer app” – VISICALC
• 1980 went public creating 300 $ millionaires
• 1980 – 85 – Lisa and Macintosh
o Infighting sees start of Jobs’ demise
• 1985 – Jobs forced out and start NeXT Inc.
• 1986 – 1997 Various attempt to revive company
failed and it went into decline .. Until Jobs came
back
• 1987 - Steve Wozniak stops formal employment with
Apple
History continued
• 1998 – 2005 Huge successes
o Ipod sells over 100 million units in six years
o Mac OS launched
o Development in video editing
• 2001 – iTunes store opens
o 16 billion tracks sold to date (2012)
o 400,000,000 active users
• 2006 – Apple bases computers on Intel processors
• 2007 – 2012 – Massive success with iPod Touch,
Iphone and Ipad
• 2011 – Steve Jobs dies.
• .
Present
• iPhone 5 Market leader
o Most wanted device
• iPad Market leader
o New introductions
• MacBook Pro series
o Expensive but has followers
• iTunes
o Coming under pressure
Strategy
Expand into new markets such as Brazil
Has massive cash reserves
Is spending time & effort litigating against competitors
New offering such as iPad mini seems confused
Loss of Steve Jobs
Tablet/Phone war could be lost and then - what?
PC market share is about 10%.
Will competition in corporate market place be a
problem
• Where is the next killer product
• Can Apple maintain premium prices?
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But….
• http://youtu.be/7J2Au80BmHc
Footnote
• It is difficult to find out if Steve Jobs contributed to
charity
• He died an 8 x billionaire
• He didn’t sign up to Warren Buffet’s “Giving Pledge”
o Billionaires pledge to give half their money to charity
• What he left was a dynamic company which had
huge criticism on the controls it put on its customers
• He will be remembered as visionary but he had his
faults
Amazon
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Founded 1994
Seattle, Washington State, USA
Founded by Jeff Bezos,
Chairman, President and CEO – Jeff Bezos
Revenue 2011 - $48 billion
Employees - 69,000
Currently largest online retailer
History
• 1994 - Founded
• 1995 - Online as amazon.com
• 2001 – First profitable year – Original plan called for
relatively slow growth
• 2001 – present – Growth by acquistion and sales
revenue
• Subsidaries include:
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LoveFilm
Alexa
IMDb
and a host of others
History continued
• First sold books and then diversified
• Innovation
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Email messaging to customers
Reviews
Also bought
1 - Click
• Runs large cloud based systems
• Handles web sites for
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Marks and Spencers
Mothercare
Lacoste
Sears (Canada)
Timex
Present
• Lots of operations in early stages
o Fresh food deliveries
o Nappy sales
o Comics for Kindle
• Kindle
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Heavy investment in Kindle
Digital content provider
Kindle 1.5 : 1 paper books
Software development subsidiaries just for Kindle
• Robotics
o Experimenting with robotics to enhance efficiency in fulfilment centres
• Digital
o 9 out 10 best selling items are now digital content or platforms
Footnote
Bezos extremely private family man
Has given $2.5million to charity
Buys companies in areas he is interested in
Complaints and protests in Seattle that Amazon
doesn’t invest in local infrastructure
• Also concern on working conditions in fulfilment
centres world wide.
• Spending > $700,000 on air conditioning
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Google
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Founded 1998
Mountain View, Ca, USA
Founded by Larry Page and Sergey Brin
Chairman – Eric Schmidt
CEO – Larry Page
Revenue 2011 - $38 billion
Employees – 53,500
Currently largest online retailer
History
Founded 1998
Unofficial Slogan – “Don’t be Evil”
Search Engine using PageRank
1998 - $100,000 funding
1999 - $25,000,000 funding
2003 – Moved to Googleplex, Palo Alto
2004 - Acquired Keyhole – (Google Earth)2006 –
YouTube
• 2007 – Doubleclick
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History continued
• 2010 – Acquire two wind farms to power servers
• 2011 – Acquired Motorola Mobility
Products and Services
• Advertising – 2011 advertising represent 96% of all
sales
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Adwords – For advertisers
Adsense – For web hosts
Analytics – Track visitor usage
DoubleClick – User interests and feed advertisements
• Search Engine
o Most used
o Criticism of algorithm (Favours older sites)
o Accusation of ranking advertisers
• Google Mail
o Web based – Security issues
o Machine read to serve advertising
Products and Services
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2006 – 2007 Google Docs
2007 – Released Android OS for mobile devices
2008 – Chrome browser
2009 Chrome OS
2010 Nexus phone
2012 Nexus 7 tablet
Strategy
• Move into products to balance services
• Move to cloud computing
• Corporate services
o Mail
o Office suite
o Databases
• Mapping
o Has launched joint satellite
• Home solutions
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Maps
Sites
Docs
Images
Footnote
• 2004 – Set up Google.org charity with $1 billion
• 2008 - $10 million causes voted by Google staff
• 2010 – 1 million Euros – European Maths Olympiad
• Has moved away, to a certain extent, from original
“Don’t be evil” but still tries to be good citizen
Finally
• The four companies have a combined turnover of
over $300 billion
• There is a lot at stake
• More litigation
• Mobile internet is the new game in town
• Who will win?