Table of Contents
William Gates and Paul Allen established Microsoft Corporation in 1975. Since then, the company has been a leader in the IT industry as well as a key player in the marke (Van Pottelsberghe & Galland, 2005). Microsoft is a leading company that develops personal computer, applications and software systems. In addition, the company also publishes books, provides e-mail services, and sells portable media players and computer peripherals among other services (Gobry, 2011). The mission of the company is to empower each and every individual including all organization on earth to achieve more. The operations of the company involves activities affect the economy as well as activities in the economy that affect the company. This paper will discuss the connection between Microsoft Corporation and the economy from research articles. The paper will then conclude by discussing my personal opinion over whether Microsoft Corporation will get better or worse.
Connection between Microsoft and the economy
As a leading company that produces software for individual computers, Microsoft is a major player in the economy of Washington State as well as the King County. For instance, the impact of the company on employment in 2008 went beyond the 39, 311 local employees that the company had (Van Pottelsberghe & Galland, 2005). In addition, the payroll of the company including expenditures on the operations established opportunities for employment for other investment opportunities in the state.
Being a software company, Microsoft was able to develop platforms for operating systems that resulted into other companies to innovate. Based on Moore’s Law, the move made the prices for PCs to be cheaper as well as valuable each year and made more people to access computers (Van Pottelsberghe & Galland, 2005). Thus, Microsoft has impacted the economy by creating a technology that made thousands companies enter.
Microsoft relocated to Washington in 1979 with only 30 employees and a total worth of $3 million (Gobry, 2011). However, in 2008 the company had 91,000 employees and a total worth of $60 billion with its headquarters in Washington and offices in over 100 countries across the world.
The direct impact of Microsoft to the economy is as a result its production, compensation of labor and employment. While the number of employees in the company increases, the amount of compensation offered by the company also increases.
The impact of the company to the economy not only brought economic development in Washington, it also improved the economy of other nations across the word.
According to a study that was conducted on the economic impact of Microsoft, in 2008, Microsoft contributed about $9.16 to the state economy of Washington through compensation of employees as well as the direct purchases that the company makes on products and services 0020 (Gobry, 2011). The company supported directly and indirectly sustained approximately 13.6 percent of the Gross State Product, 7% of the total individual income and 8.4% of the total employment.
As from the time that Microsoft was established in 1975, the company has been leading in the IT sector and a potential player in the market (Van Pottelsberghe & Galland, 2005).
According to the Wall Street Journal, the company has benefited from a substantial economic stability from most of the developed nations between 2003 and 2016. Thus, Microsoft may anticipate for stable markets in terms of performance in developed nations. The company also has a potential to improve on its sales revenue in these markets. Such an opportunity translates into a steady growth in the global sales of Microsoft. In addition, the external economic factor of the general global development among the middle class disposable income offers opportunities to the company to receive higher revenues since they are among the most important sources of revenues at the company (Gobry, 2011).
From the above discussion, it is evident that there is a connection between the economy and Microsoft through its operation in IT. Microsoft Corporation is among large businesses that have had an impact on the performance of the economy and to be specific Washington. The company participates in marketing and developing hardware and software services and plays an important role to the economy. Microsoft has many aspects that links the company to the economy and among them have included its ability to employ a large number of employees, compensation, and a number of impacts to the economy. Microsoft has faced many challenges in protecting their intellectual property rights globally and fighting the use and copying of unlicensed software as well as other intellectual property. Due to such difficulties, the revenue of the company from countries that lack laws to protect intellectual rights could possibly decrease in such markets. Thus the company may face worse economic times in future. Besides this, lack of proper transfer of knowledge along with smooth transitions concerning important employees may affect the strategic planning and implementation.
- Flannery, R. (2018). Microsoft And Walmart Are Doing It: What If You Have To Downsize?. Forbes.com.
- Gobry, P. (2011). Yes, Microsoft Did Change The World More Than Apple. Business Insider.
- Van Pottelsberghe De La Potterie, B., & Galland, P. (2005). On the economic impact of Microsoft – Belgium. Reflets Et Perspectives De La Vie Économique, XLIV(3), 51.