E-commerce

In 2005 the group of researchers from Harvard business school published the survey of Microsoft Company in 2005. The researchers also provided the brief review of the Company activity within its history. Shortly reviewing the history it is worth noting that Microsoft Company was founded in 1975 by Bill Gates and Paul Allen, and for almost fifteen years it has expanded as the software for PC developer. The most famous and popular product of Microsoft Company is Windows operating system, besides, the company developed application software. The unchallenged leader of the Company, Bill Gates, has shown himself as smart, farseeing and authoritarian leader, who made all the important decisions in the company. Despite the autocratic leadership style was sometimes the reason of lagging from the competitors, the positive impact of single strategy and strong business solutions allowed Windows to become one of the most  valuable and profitable companies of the world. As one of the leading software developers, Microsoft couldnt let the beginning of e-commerce pass.  Thus, in 2005, Microsoft invested in its new businesses, ranging fro Xbox to Business Solutions. Microsoft revenue from Business Solutions business made in 2003 and 2004 years the revenue of 632 and 760 million correspondently.   However, at the end of 2009 the revenue for this division was flat. This leads to the problem of software environment for e-business and Microsoft share on this market.

The software environment of e-business 
The key issue of this research is to identify the reason of lagging on the Microsoft software for e-business from the products of its competitors.

The e-business, or business via and in the Internet, played the significant role in the history of Microsoft Company. At the beginning of 1990th the Internet wasnt like the modern World Wide Web, and was aimed on the business purposes mostly. Bill Gates has highly evaluated the potential of connection between personal computers. In 2001 Microsoft formed Business Solutions division, which started the development of Microsoft Dynamics line  the line customer relationship management and enterprise recourse planning applications. The capabilities of these applications include sales, services, and marketing tools. Besides, this line includes the online version of this application. The Dynamics line provides the set of solution for small and middle-sized business as well as for the entire industry.

Supported by 2 billion in marketing since its creation in 2000, Microsofts Business Solutions revenue had increased to 556 million through Q3 FY05, but the segment still lost 54 million in the latest quarter. At the same time, competitive pressures increased as established players focused on the SMB segment. Many analysts also believed that the business application market was consolidating. Oracle acquired PeopleSoft in a hostile takeover, while in June 2004, Microsoft revealed that it had initiated preliminary discussions with SAP AG to explore the possibility of a potential merger between the two companies but ended these discussions due to the complexity of the potential transaction and subsequent integration(Yoffie et al)
In spite the strong competition on this sector Microsoft till now takes a significant market share in small, mid-size and even large companies CRM market.

Microsoft Business Solutions and its partners have a tremendous opportunity to exert a unique leadership position in the midmarket through delivering not only business applications, but also the surrounding infrastructure, all of which is backed by Microsofts brand reputation of ease of use, strong RD dollars, and executive leadership.(Karasev, 2009)

Along with Business Solutions line Microsoft has the division of online service, which includes MSN and new search engine MS Bing. MS Network provides the services of e-mail, different messengers, credit card processing, online bill payments along with the possibility to incorporate these services to other websites. The revenue of this division made in 2003 and 2004 1,953 and 2,216 million dollars correspondently. When it was launched, the main task of MSN was to compete with Yahoo and later Google on the market of online services. The opposition of Google and Microsoft on the market of internet-services is the captivating, process. The growing popularity of Google on the search market caused Microsoft to launch MSN search in 2005, and later on Microsoft released its own search engine Bing. As the business respond Google announced about the future release of Google Chrome OS, operating system that has to compete the main MS product Windows operating system.

In 2005 Bill gates stated, Weve been in the search business even before Google was around. The commitment we made is to build unique search technology across the board. Our research agenda will allow us . . . to make what we have today look like a joke. And a lot of that will be built into applications like Office or the Windows shell (Yoffie et al)

Though Microsoft takes the significant part on this market also, the performance in this division is worse than in Business solutions. In 2009 Microsofts online services business division failed to post a profit. According the manager of division, online business of Microsoft is just a flanking strategy for the company whose core business is still operating systems and servers and tools. In 2009 the sales fell 5 and the division lost 466 million.

Alternative solutions and recommendations
It is obvious that Microsoft performs better in the sector of business solutions than in the sector of Web-service. The reason of the last is the marketing strategy of Google, which proposes most of its service for free. Most of these services are able to compete with the Microsoft productions successfully. For example, the online text redactor Google dos have the less functions comparing the Microsoft Word, but it is available online and for free. Microsoft invests large amounts into security of its software including the protection for illegal copying, and that is why MS isnt strive to create the online versions of its the most profit-making product.

The solution on this situation could become the technology of Web 2.0, which uses the web as a platform. One of Web 2.0 basic principles is use Software as a Service, and the rapid growth in this sector threatened the MS Company. Bill Gates worried about these services in 2005, when he stated
This coming services wave will be very disruptive.... Services designed to scale to tens or hundreds of millions will dramatically change the nature and cost of solutions deliverable to enterprises or small businesses (Caplan, 2009).

Thus, the very best solution for MS it would be to provide the online solution on the base of Microsofts Azure PaaS solution. This application has already received the positive grades from the early users. It could be the development platform for enterprise and ISVs developers.  This would create the competitive advantage over Google,  Salesforce.com, and Amazon because they have no rich experience of work with third-party developers.

Conclusion though Microsoft was late reentrant on the market of software as service on the Web 2.0 technology, and its performance is lagging those offered by todays industry innovators, the company still has a good starting position to become a dominant force in the market of Web 2.0 technologies, including the latest trends in business solutions.