Microsoft Anticipates Slower Growth and Increased Competition

In a recent electronic mail letter to employees, Microsoft Chairman William Bill Gates warned of a "fast-moving, intensely competitive industry" and announced that the company will no longer add employees at the same rate as in the past. Despite dominating the personal computer software market, Microsoft continues to face stiff competition from rivals such as International Business Machines Corp., Sun Microsystems Inc., Apple Computer Inc., and Novell Inc. These companies are investing heavily in systems software, and Microsoft must respond with new products and strategies to stay competitive.

Key Takeaways:

• Microsoft Chairman William Bill Gates warned employees of increased competition and price competition in the industry.
• The company plans to add workers this year, but at a slower rate than in the past.
• Microsoft faces strong competition from International Business Machines Corp., Sun Microsystems Inc., Apple Computer Inc., and Novell Inc.
• Novell has a commanding lead in networking, while Apple is known for better ease of use.
• Microsoft is slow to respond to the success of Lotus Notes, which allows employees to work together and share information through PCs.
• Microsoft plans to launch a product to rival Lotus Notes in 1994.
• The company's workforce grew 14% in 1993, and some years prior had grown by 40% or better.
• Employment at Microsoft grew from 2,800 workers in 1988 to an undisclosed number in 1993.

Statistics:

• 40%: annual growth rate of Microsoft's workforce in the late 1980s and early 1990s.
• 14%: growth rate of Microsoft's workforce in 1993.
• 1993: year in which Microsoft's workforce grew 14%.
• 1988: year in which Microsoft had 2,800 workers.
• Unspecified: current number of employees at Microsoft.

Sources:

• Associated Press

New York Times, Seattle - WA

Microsoft Corp.'s growth will necessitate some reorganization, Microsoft Chairman William Bill Gates has said