19. Microsoft: The Internet Jig

DQI Bureau
New Update

EVEN as the packaged software industry’s crusade against piracy (up 61%) continued, Microsoft went about business as usual, clocking 42% growth in an industry that grew at 34%. The company’s overall revenues stood at Rs 660 crore in fiscal 2000-01, against Rs 466 crore in the previous year. The company continued to be the clear ruler in the office software segment, commanding a share of over 80%. A big factor contributing to this performance was a high 51% growth in PC sales. Microsoft consolidated its position in the e-biz segment after launching the .NET enterprise server range. The company also entered into an alliance with Compaq and Unisys as part of its W2K Datacenter program for enterprises. And in an attempt to further penetrate the home-user segment, the company launched the Windows ME operating system.



  • STRENGTH: Completely dominates desktop OS and apps; 80% of office suites
  • WEAKNESS: Perception of Windows not being mission-critical stable (both server and desktop) and secure; aggravated by Net virus attacks
  • OPPORTUNITY: .Net and Hailstorm could mean Internet users pay monthly fees to Microsoft for services they currently use free or apps they pay one-time for
  • THREAT: Piracy (rose by 61%); growing popularity of OpenSource technologies 



  • 42% growth in the packaged software segment (which grew 37%)
  • Government deals for technology solutions
  • Parent company’s global alliance with Infosys
  • Partnered with Satyam, Mastek on VisualStudio.NET program


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Rajiv Kaul

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1990 EMPLOYEES: 191 

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Bundling of software, or “packaging software applications together to provide the end-consumer with a complete solution”, as Microsoft prefers to term it, played a key role in the marketing strategy. For instance, the BackOffice Server 2000 was a suite of server products designed to address the needs of medium to large enterprises–Windows 2000 Server, Exchange 2000 Server, Microsoft SQL Server 2000, Internet Security and Acceleration Server and Host Integration Server 2000.

Similarly, the Small Business Server 2000 included the Windows 2000 Server and a suite of Microsoft’s .NET Servers, including the Exchange 2000 Server for e-mail and collaboration. As part of the growth strategy in the SME segment, Microsoft partnered with independent software vendor partners, conducting nationwide

roadshows. Nearly 10% (DQ estimates) of the company’s annual spend was directed towards training its 2,500 partners. The training initiative comprises customized programs for SMEs as well as high-profile partners like

TCS, Wipro, HCL, IBM, Compaq and HP. Microsoft partnered with Satyam and Mastek with its VisualStudio.NET Champs program aimed at developers. Microsoft Chairman Bill Gates’ visit in September 2000 resulted in a global alliance with

Infosys. And behind all the moves and numbers was one central objective–Operation Hailstorm. The company signed an MoU with the government of Uttar Pradesh to jointly develop and deploy technology solutions in the state. Other initiatives included the setting up of a technology lab on SQL Server 2000 in Chennai for partners and customers to test and try database solutions.