The External Environment of Microsoft Inc. (Computer Operating System Research Paper

The External Environment of Microsoft Inc. (Computer Operating System Industry) - Research Paper Example It has been ranked 37th in the Fortune 500 list in 2012 (â€Å"Fortune 500†). Industrial Structure As mentioned earlier Microsoft Corp. operates in the software industry globally. This industry mainly consists of the IT industry, the Software industry and the Internet Software and Services industry. If we look at the global software industry it mainly comprises of application software, software for home entertainment and systems software. The global IT Services industry is not that relevant to Microsoft because it comprises of the data processing and outsourcing market. The internet software and services industry mainly comprises of the organizations which develop and market internet software and provide internet services related to interactive services and online databases. There has been a growth of around 7% in the global systems software market in the year 2010. It is expected that the market value of this industrial sector would increase by around 31% in 2015 since the ye ar 2010. Operating systems software can be regarded as the largest segment related to the global systems software industry and accounts for a significant portion of the industry's total market value in the world. If we look at the geographical segmentation of the industry it can be found that the Asia-Pacific region accounts for the maximum share of the market value in the world. Microsoft Corporation is considered to be the leading player in this industry and accounts for the maximum share of the market value. Overall the market for systems software is fragmented which results in intensifying rivalry amongst the competitors. Dominant Economic Traits Some of the dominant economic features of the systems software industry are discussed below: a. Market Size and Growth Rate: There has been a continuous growth in the global systems software market in the recent years and it is expected to grow at a same pace in the forthcoming years as well. The total revenue generated by the global sy stems software market was around $198 billion in the year 2010 which represented a compound annual growth rate (CAGR) of around 5.4% in between the years 2006 and 2010. The most lucrative segment of the market in 2010 was the Operations Systems software market which accounted for almost 37.5% of the total revenue generated in the market. b. Scope of Competitive Rivalry: Most of the companies in the software systems industry operate their business activities in different areas of the world. The majority of the market value for this industrial sector is concentrated in the Operating Systems software market. Of all the areas in the world, Asia-Pacific region accounts for most of the revenues generated in the global systems software market. Microsoft Corp. is the leading player in this industrial sector and since the market is fragmented it results in enhancing the rivalry amongst the competitors. c. Number of Rivals: Overall the systems software market is fragmented in nature. However, only a small number of large multinational companies like Microsoft, IBM,