Microsoft Final Board of Directors

7/29/2019 Microsoft Final Board of Directors

1/18

MicrosoftBOD Presentation

Arash Azarmi Chief Executive Officer

Kacy Navarrette President, Entertainment & Devices Division

Payam Bahreyni Chief Financial Officer

Sagar Babu Vallurupalli Chief Marketing Officer

Roshan Peter Chief Research and Strategy Officer


2/18

Agenda

Recent happenings

Analyze trends

Assess issue

Competitor Analysis

Recommend a solution and process

Purpose

Recent Happenings

Microsoft Divisions

Decline of PC Competitive

Landscape

Out of the Gate

Recommendations

Arash, Chief Executive Officer


3/18

Purpose

To request concurrence to conduct a

feasibility study to verify the

correlation between number of

applications in Windows Marketplaceand an increase in sales of Windows 8

operated tablets and phones.


Purpose

Recent Happenings

Microsoft Divisions


Landscape

Out of the Gate

Recommendations


4/18

Recent Happenings

Microsoft Revamp

Change in Logo

New product line

Windows 8 OS October 26

Nokia Lumia 820 & 920 November

Microsoft Surface December


Purpose

Recent Happenings

Microsoft Divisions


Landscape

Out of the Gate

Recommendations


5/18

Microsoft Divisions

Entertainment& Devices

Windows &Windows Live

MicrosoftBusiness

Server & Tools

OnlineServices


Purpose

Recent Happenings

Microsoft Divisions


Landscape

Out of the Gate

Recommendations


6/18

Microsoft Divisions

Entertainment &Devices

Windows &Windows Live

MicrosoftBusiness

Server & Tools

OnlineServices


Purpose

Recent Happenings

Microsoft Divisions


Landscape

Out of the Gate

Recommendations


7/18

Microsoft Divisions

26%

27%

4%

34%

14%

Revenue by Division FY 2012

Windows & Windows

Live Division

Server & Tools

Online Services

Division

Microsoft Business

DivisionEntertainment &

Devices Division

Purpose

Recent Happenings

Microsoft Divisions


Landscape

Out of the Gate

Recommendations

Payam, Chief Financial OfficerTotal Revenue: $ 69.7 Bn.

Entertainment & Devices Revenue: $ 8.9 Bn.


8/18

Microsoft Divisions Purpose

Recent Happenings

Microsoft Divisions


Landscape

Out of the Gate

Recommendations

2010

2010

2010

2010 2010

2011

2011

2011

2011

2011

2012

2012

2012

2012

2012

$(1,000)

$(500)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Windows &

Windows Live

Server & Tools Online Services Microsoft

Business

Entertainment &

Devices

Rev

enueChange(MillionDollars)

Change in Revenue By Division

Payam, Chief Financial Officer


9/18

Why the Loss?

Loss of PC user

A decline in sales of PC has been documented as

sales of tablet and mobile devices increases.

Arrival of Millennial consumer

This new generation is focused about being

connected.

Consumers buy tablets and smartphones due to the

features

Kacy, President of Entertainment & Devices Division

0

5

10

1520

Q2 10 Q2 11 Q2 12

PCSales

Millions

Decreasing Sale of PCs

Purpose

Recent Happenings

Microsoft Divisions


Landscape

Out of the Gate

Recommendations


10/18

Competitive Landscape

Sagar, Chief Marketing Officer

21%

5%

61%

6%

7%

Smartphone and Tablet OS Market Share

(Q4 2012)

Apple iOS

MS Windows Phone

Google Android

Blackberry

Others

Purpose

Recent Happenings

Microsoft Divisions

Decline of PC

Competitive

Landscape

Out of the Gate

Recommendations


11/18

Competitive Landscape


Purpose

Recent Happenings

Microsoft Divisions

Decline of PC

Competitive

Landscape

Out of the Gate

Recommendations2011

2011

2011

2012

2012

2012

0

100

200

300

400

500

600

700

Thousands

Number of Apps in Various App Stores


12/18

Competitive Landscape Purpose

Recent Happenings

Microsoft Divisions

Decline of PC

Competitive

Landscape

Out of the Gate

Recommendations

0

100

200

300

400

500

600

700

Aug-10 Nov-10 Feb-11 Jun-11 Sep-11 Dec-11 Apr-12 Jul-12

Thousands

Growth of Number of Available Apps

Apple

Microsoft

Google



13/18

Quick Out of the Gate

0

5

10

15

20

25

30

35

40

iOS Windows

Phone

Android Nokia Store Blackberry

NumberofMonths

Time to reach 100K apps


Purpose

Recent Happenings

Microsoft Divisions

Decline of PC

Competitive

Landscape

Out of the Gate

Recommendations


14/18

Recommendations

2016 Windows 8 operated tablet and smartphones

market share projection: 19.2%

Ways to gain more market share by 2016?

Question: Can we increase our sales by increasing

number of apps on our marketplace?

Roshan, Chief Research and Strategy Officer

Purpose

Recent Happenings

Microsoft Divisions

Decline of PC

Competitive

Landscape

Out of the Gate

Recommendations


15/18

Recommendations

A feasibility study to determine correlation between

increase number of apps and sales of tablets and

smartphones

Budget: $ 480,000 Time Frame: 3 Months

Purpose

Recent Happenings

Microsoft Divisions

Decline of PC

Competitive

Landscape

Out of the Gate

Recommendations



16/18

Recommendation

Phases


FeasibilityStudy

Corr > 0

YesResearch more on ways of

accelerating the increase of thenumber of apps

NoInvestigate other factors that

potentially increase the sales ofWindows phones and tablets

Purpose

Recent Happenings

Microsoft Divisions

Decline of PC

Competitive

Landscape

Out of the Gate

Recommendations

Phase 1 Phase 2

OR


17/18

Questions?

Purpose

Recent happenings

Microsoft Divisions

Microsoft Revenue by Division

4 Year Revenue by Division

Entertainment & Devices

Windows Marketplace

Why Windows Marketplace?

Recommendations


18/18

FSA

Q4 (Jun '12) 2012 Calendar

Net profit margin -2.72% 23.03%

Operating margin 1.06% 29.92%

EBITD margin 33.67%

Return onaverage assets

-1.65% 14.77%

Return on

average equity-2.92% 27.51%

Documents

Microsoft Final Board of Directors