Case Analysis Notes

Case Questions:
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. It was projected that service expenditures would become an acute problem in three
years. At the same time, a PSS market research survey discovered that customers, particularly those
that used several Microsoft products, were very confused and frustrated with Microsoft's technical
support services. Also Microsofts support services were not as good as that of competitors. The
previous support policy was at a product level and since Microsoft had over 150 products the result
was a hodgepodge of several offerings. Some products had no support services, some offered
unlimited "free" service that was accessed by phone via a "toll" number, and still others provided
extensive telephone service "for fee". For customers, particularly those that owned and used several
Microsoft products, the service offerings were confusing. Expert users felt that they were paying for
services they didn't need on basic applications. At the same time, they 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. Also Microsoft managers expected that demands for high-end
service on its own network would become even more acute in the next few years with the introduction
of a new generation of technically complex products. Changing perception of customers on quality
of Microsoft products and the nature of technical support service requested was also changing There
was a need of Simplicity of Services. Because of all this factors it was clear that Microsoft s PSS
Division needed a comprehensive and flexible support service

2- Based upon the guidelines that senior management has provided Trish May what product
support strategy has Microsoft envisioned?
Microsoft Divisions had to resolve two central issues .At first development of an overall strategy for
support services were needed, that would be simple enough to understand, communicate, and execute.
Second, they had to address several tactical concerns such as when and how to charge for these
services. Early on in their analyses, the task force hit upon the idea of using a matrix to summarize the

various service offerings. Members referred to it as the Microsoft Support Network 1.0. The following
strategic choices were also made:

Shifting less critical ,low margin ,non specialized services out of Microsoft into VARs or
ISVs

Improve responsiveness to critical requirements at a price while providing free services or

non critical activities

Separate services for corporate accounts and developers from novice and expert users

Create a revenue stream from specialized ,critical ,technical services

3- How should the Microsoft Support Network 1.0 matrix bet structured in terms of rows and
columns?

The rows of the matrix would consist of major service groupings, while the columns would capture
the differences in those services across product or customer segment categories. In turn, each element
in the matrix would describe a specific service offering and include a fee structure. To avoid customer
confusion, the group 16 elements should be the largest size of the matrix. As was mentioned above
there was disagreement about how to construct the rows and columns of the matrix. There were some
different approaches: Problem-Based Service Rows, Responsiveness-Based Service Rows, Product
Category Columns and Customer Segment Columns. Alternatives: #1: Problem-Based Services x
Product Categories #2: Problem-Based Services x Customer Segments #3: Responsiveness-Based
Services x Product Categories #4: Responsiveness-Based Services x Customer Segments Reason why
#3 is best: 1.

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)?
The services can be organized as below

Free or Standard : The services offered under this should include general information
related queries, Installation and start up services and other simple issues .This should be
offered to the end users ,novices who are price sensitive

Optional /Additional Premium: This can be offered for usage and productivity assistance,
system integration and customized support. This can be offered to corporate accounts,
developers.

3rd Party Service Providers: Complex services specialized to a particular industry, High
volume non specialized services .This can be offered to end user experts, end user
novices to cope with high volume of service request.

5. What implementation problems should PSS managers anticipate? How can PSS manages
successfully overcome them?
The following implementation problems could be anticipated

Communication of the services to the customers (internal & external)

Communication between development and support team
Quantifying the benefits to core software products due to better services
These can be overcome by using a focussed approach. To the price sensitive customers focus
on how they do not have to pay for what they do not use. To price insensitive customers focus
on faster response and better quality of services for critical issues. Services can be bundled
with product variants giving a quantified view of the value. Following both formal and
informal interactions and communications between development and support teams for better
implementation.