Team Project: Microsoft

1
Team Project: Microsoft

2
Executive Summary
Microsoft is a worldwide technology company with revenue of 168 billion USD
(Microsoft, 2021). being a technology company generates revenue by offering an array of cloud-
based services and other services to people and businesses; licensing and supporting software
produces, designing, manufacturing, and selling devices: as delivering relevant online
advertising to global audiences. Expenses are related to compensation to employees, designing,
manufacturing, marketing, and selling of products and services, datacenters costs that support the
cloud-based services and income taxes.

3
Current State
History of Microsoft
Bill Gates and Paul G. Allen founded Microsoft in 1975 after converting a mainframe
programming language into a programming language that was suitable for use on a personal
computer (Zachary & Hall, 2020). Microsoft’s first important partnership was with International
Business Machines Corporation (IBM) for whom it created MS-DOS, the operating system that
ran every IBM computer (Zachary & Hall, 2020). Microsoft became a publicly owned
corporation in 1986, and by 1993 Microsoft was producing the software that ran 90% of the
world’s computers (Zachary & Hall, 2020). As of 2021, Microsoft continues to dominant the
market, with their software powering almost 80% of all computers worldwide (Liu, 2021).
Mission Statement
“Our mission is to empower every person and every organization on the planet to achieve
more” (Microsoft, n.d., para. 1). Microsoft’s mission is anchored around the idea of making
everyone globally to “achieve more.” In a global and very connected economy, Microsoft
mission’s fills in a need, more of a must-have, for young and old alike, whether it is to be more
efficient in our personal lives or to simply do our jobs in our professional settings. Embedded in
the mission is how their products “empower” people and organizations, a powerful and brilliant
concept that resonates with all of us.
Vision Statement
“At Microsoft we are dedicated to advancing human and organizational achievement”
(Microsoft, n.d., para. 1). Microsoft pursues its vision by aligning it to its mission statement, as
well as adhering to its core values.

4
Core Values
Microsoft has three corporate values which align to its mission and vision statements.
First, respect: “we recognize that the thoughts, feelings, and backgrounds of others are as
important as our own” (Microsoft, n.d., para. 2). Second, integrity: “we are honest, ethical and
trustworthy” Microsoft, n.d., para. 3). Third, accountability: “we accept full responsibility for our
decisions, actions, and results” (Microsoft, n.d., para. 4).
Internal Assessment
Finance and Accounting
Microsoft repurchased shares with the approval of the Board of Directors. In both 2016
and 2019 up to $40 billion in shares were repurchased and as of June of 2021 8.7 billion
remained of the $40 billion share repurchase program. The shares repurchased during the 2021
fiscal year and the fourth quarter of the fiscal year 2020 were under the share purchase program
approved in 2019.
Highlights from fiscal year 2021 compared with fiscal year 2020 included:
 Commercial cloud revenue increased 34% to $69.1 billion.
 Office Commercial products and cloud services revenue increased 13% driven by Office 365
Commercial growth of 22%.
 Office Consumer products and cloud services revenue increased 10% and Microsoft 365
Consumer subscribers increased to 51.9 million.
 LinkedIn revenue increased 27%.
 Dynamics products and cloud services revenue increased 25% driven by Dynamics 365 growth
of 43%.

5
 Server products and cloud services revenue increased 27% driven by Azure growth of 50%.
 Windows original equipment manufacturer licensing (“Windows OEM”) revenue increased
slightly.
 Windows Commercial products and cloud services revenue increased 14%.
 Xbox content and services revenue increased 23%.
 Search advertising revenue, excluding traffic acquisition costs, increased 13%.
 Surface revenue increased 5%.
(Microsoft annual report 2021)
Management: Planning, organizing, motivating, staffing, and controlling
What is more impressive for those who are very aware of ethical behaviors and corporate
responsibilities, is how Microsoft behaves and “lives,” what could also be called the “How” they
do business. A big part of the company’s value is to treat customers and their own employees
with respect and create an enabling and supportive environment for their workers. Respect,
integrity, diversity, and accountability are a big part of the company’s aspiration. It does create a
powerful recruitment and retention tool so they can attract the best talents. Motivating employees
to keep innovating and having pride and ownership of the company’s products is core to
Microsoft’s strategy. Who would not want to be valued, know that they work in a place where his
and her ideas do matter? We spend at least 8 hours of our days dedicating to this organization.
Moreover, Microsoft employees are well compensated. According to Glassdoor, an
anonymous survey found that 91% of Microsoft employees said that they would recommend the
company to a friend, an impressive 98% of them approve of their current CEO job performance.

6
Running a business with great products and staying true to its value is one thing, staying
competitive over time is more impressive. A company that continues to stay ahead of the game
over a period of several decades and shows no signs of slowing down shows a great deal of
strategic insights, sophisticated management, and bold leadership.
Continuing to innovate, adopt, adapt, and evolve is a necessary step to stay not only
competitive globally but to remain number one. It can also be exhausting for employees.
Exhausting because this will require internal adjustments, constant re-organization, and change,
forcing employees to adapt and adopt. Balancing these two key ingredients of external forces and
internal effects is one that Microsoft cannot afford to not get right.
R&D
Most of Microsoft products and services are internally developed which allows Microsoft
to maintain competitive advantages that come from product differentiation and closer technical
control. Microsoft’s main R&D facility is in Redmond, WA, however, has offices all over the
world. In the following engineering groups, Microsoft focuses its R&D efforts on Cloud and
Artificial Intelligence (AI), Experiences and Devices, AI and Research, LinkedIn, and Gaming.
These groups focus on hardware, software, cloud infrastructure, content, and services.
Microsoft’s R&D expenditure amounted to around 20.7 billion U.S. dollars in its 2021 fiscal
year, a record high for the company. Microsoft ranks second among software and computer
service companies worldwide in terms of R&D spend, behind only Google’s parent company
Alphabet. (Liu, 2021). Per Microsoft’s 2021 annual report, 60,000 employees are employed in
Microsoft’s R&D department. With billions invested into its R&D, Microsoft protects its
intellectual property in a variety of ways by working actively in the U.S and internationally to