1. Read the attached article relating to the Microsoft Office transaction to touch-based controls and adaptations for mobile devices. Interpret this move from a strategic perspective for Microsoft and operational implications for other user organizations.

Microsoft has to stay competitive so it created a new spectrum of new products and totally changed its business model. After Google introduced Google documents Microsoft came up with its Office 365. In addition, this new Office is cloud based and will be sold with an annual subscription. That’s not enough. Earlier this year Microsoft introduced new tablet called the Surface. Surface comes in two versions –with Windows 8 Pro and Windows RT. a. How is the Microsoft business model shifting? Relate to pricing, customer service, competitive positioning. (Research the pricing structure of Office with the new release). By introducing a new type of product, Microsoft has now 2 business models. First one is licensing the software and second is selling the tablets. Those models are entirely different, almost conflicting. Both have different concept of supply, corporate culture, strategies, sales, production, marketing or distribution. Windows operating system is licensed to almost everyone who uses computers or laptops. The strength of licensing is in the variety of hardware it can work with. Microsoft has about 95% market share for licensing and has almost no competition. By introducing tablets Microsoft entered into completely new business model. In addition to licensing, Microsoft will sell hardware as well. The new business model has many competitors. The end user experience has to be compromised. They are licensing their software to manufacturers and they are competing with those same manufacturers by selling their own Microsoft branded Surface tablet. In addition to all described above changes, Microsoft added new dimension for reaching out to customers with its new MS Office called Office 365. “Office 365 is a secure, anywhere access to email and calendars, Office Web Apps, instant messaging, conferencing, and file sharing. It primarily denotes a set of subscription based software services that require monthly or periodic payment of fees to Microsoft Corporation. By contrast, Office 20XX generally refers to a suite of desktop applications that alone by themselves are not subscription based and do not carry monthly fees.” The new products of updated Office 365: * Office 365 Home Premium * Office 365 Small Business * Office 365 Small Business Premium * Office 365 ProPlus * Office 365 Midsize Business * Office 365 Enterprise The pricing options for new Office will be extended. It can be done monthly, yearly or just purchased in traditional non-subscription way. Below the cost specifications: Office 365 | University | Home Premium | Small Business Premium | Midsize Business | Enterprise & Government | Cost per Month | $3.30 | $8.33 | $12.50 | $15 | $20 | Target users | Student | Consumer | 1-10 | $15 | > 250 | Office | Home & Student 2013 & RT | Home & Business 2013 | Standard 2013 | Professional Plus 2013 | Cost | $139 | $219 | $369 | $499 | If someone doesn’t want to subscribe and prefer to buy version that he can install locally he will still have such option. Microsoft makes it now more expensive and the licensing terms more though, to make more users switch to cloud and subscribe for its Office wares. Whether customers choose to pay for Office 2013 or sign up for a subscription to Office 365, the bigger challenge for Microsoft will be how it markets the suite to both businesses and individual consumers to show why they need to make the switch at all. For most customers, Office 365 will offer multitenant services. For large customers, Microsoft offers Office 365 dedicated services, hosted