Microsoft Corporation : The design of Microsoft Support Network 1.0

Submitted by:

Group 6

PGP/18/161 RISHANKU GOYAL

PGP/18/184 ANKUR CHANDRA

PGP/18/188 BHUVNESH PRAKASH

PGP/18/325 SNEHAL RAWAT

1. What factors suggest that Microsoft's PSS Division needs a more comprehensive and flexible approach for its service offerings?

There was an upward spike in customer service costs in periodic review of the division's

Profit and Loss statement.

Customers using several Microsoft products were very confused and frustrated with

Microsoft's technical support services.

Microsoft's support services were not as good as those offered by some competitors.

Several factors contributed to the nondescript nature of Microsoft services.

Hodgepodge of service offerings, some products had no support services, some offered

unlimited "free" service.

Customers owning several Microsoft products, the service offerings were confusing

because it was difficult to know which service came with which product.

Expert users felt that they were paying for services they didn't need on basic applications.

Customers could not get sophisticated support services on some of Microsoft's newly

introduced line of highly technical advanced systems, even if they were willing to pay

extra.

Each service provider had to understand working of all 150 Microsoft products,

competitor’s product knowledge and every industry specific product application

2. Based upon the guidelines that senior management has provided Trish May what product support strategy has Microsoft envisioned?• Emergence of concept of a service offering matrix

• To summarize various service offerings

• It was referred as the Microsoft Support network 1.0

• Tactical Concerns

• They can go for both standard as “for free” and an option “for fee”

• Free service has to be provided for having competitive advantage and develop

favorable brand attitude

• Therefore problems occurring before 90day can be free

• They could offer standard service for free for desktop application and charge

personal operating systems, hardware, and development product owners a fee

after 90 days

3. How should the Microsoft Support Network 1.0 matrix bet structured in terms of rows and columns?Microsoft Support Network 1.0 matrix can be structured in 4 ways

Alternative 1 : Across Rows :Problem-Based Services , Across Columns :Product

Categories

Alternative 2: Across Rows : Problem-Based Services , Across Columns :Customer

Segments

Alternative 3: Across Rows : Responsiveness-Based Services , Across Columns :

Product Categories

Alternative 4: Across Rows : Responsiveness-Based Services , Across Columns :

Customer Segments

Pros for Responsiveness-Based Services against Problem-Based Services

Problem based service would be valuable to the customer only when they which

problems they could expect to have. Knowing this in advance is difficult

It will be easier for the manager to make fee decisions if the services are offered as a

function of responsiveness

Across the columns the choice between the 2 options i.e. Product Category or Customer segment

both have their respective advantages. If we go for a Product category based classification, we

will meet the objective of making the customer aware of the kind of service will they get for a

product. If we choose Customer segment, we will be able to tab the customer surplus for

customers that deal with mission critical applications for their businesses. Hence alternative 3 &

4 are better choices among the 4 alternatives.

4. Which services should Microsoft offer; a) offer as free or "standard”, b) sell as an option for an additional fee, and c) not offered (but have a 3rd party service provider partner offer)?

Free services - Problems that occurred within the first 90-days of ownership would be given free. General Information, Fast tips and electronic services Installation and Start up services

Additional Fee Standard support post 90 days System Integration and Customized support services, Priority service Premier support

Not offered Mission critical and heavy-customization (beyond a certain point) Cross-platform and cross-integration (beyond a benchmark)

5. What implementation problems should PSS managers anticipate? How can PSS managers successfully overcome them?

Industry pundits speculated that it would be impossible to eliminate "free" Installation & Start-Up service on application, PC operating systems, and developer products.

Customers would interpret "fees" for this period as an unethical way for software vendors to "pad" their profits.

Many would wonder if suppliers deliberately made their software difficult to use so that customers would have no choice but to buy service.

Managers would have a more difficult time designing Usage & Productivity assistance. While service engineers could address most problems associated with application software at a relatively low cost, they would incur significant costs for PC operating systems, development products, and hardware problems.

In addition, problems that occurred after the first 90-days of ownership were particularly costly. Systems Integration and Customized support services would be quite expensive to deliver.

There are two solutions about this issue -

First is to include systems integration and customized support as standard and cover their costs via a hefty price premium on software or sell it as an option at a significant fee.

If services were offered as a function of responsiveness, managers would havean easier time making fee decisions. They could offer Standard Support for free on an unlimited basis for desktop applications.

At the same time, they wouldprobably have to charge personal operating systems, hardware, and development products owners a fee after 90-days because such usage and productivity problems were often quite costly.

They would also charge a significant fee for Priority and Premier Support due to staffing requirements. The task force had to make a series of intriguing decisions concerning what services "not to offer".

Given that most applications and PC operating systems software was being "pre-installed" by original equipment manufacturers (e.g., IBM, Compaq, Dell), some managers argued that installation and start-up problems should be handled by those firms.

At the same time, some task force members argued that local computer dealers should be asked to handle basic usage problems, particularly those that occurred within 90-days of purchase. As for the high-end services, the firm would have to make some difficult choices.

The task force would also have to determine how to charge customers for support services, particularly those provided over the phone. Competitors were relying upon a variety of approaches. Some sent an invoice following the call. Others charged via 900# or had service engineers take credit card numbers. Alternatively, some competitors either included in software packages or sold separately "incident coupons" that entitled the bearer to make a number of pre-specified technical support calls. Adobe Corporation took a different approach. It provided customers with "service credits" as a function of the dollar value of Adobe software that they purchased. The more software purchased the more credits received. When needed, the customer could redeem service credits for technical support.  Given the large size of many developers and corporate accounts, PSS managers would have to decide how many individuals within a customer firm would be eligible to receive service under a technical support contract. Furthermore, managers would have to designate specific developer programmers and corporate MIS personnel as points of contact for service initiatives. For

international companies, access from specific geographic regions would also have to be specified.

Communicating the details of the Microsoft Support Network 1.0 would be another challenge for Microsoft. Company wanted its customers to be delighted in their ability to choose from a variety of high-end services while concluding, "I don't have to pay for what I don't need!" It was not at all clear how these communications goals would be achieved

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