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Low Cost Value Identifying high value/cost initiatives
Expanding products and services Looking at Gmail's model Demonstrating worth
Dilbert Comics

One of the reasons it's interesting to study Microsoft's current position is because for how long they retained the #1 spot in personal computing with such dominance. Google's surge and Apple iPhones/iPads turned the entire game around and now Microsoft is at a crossroads. Will the giant be too slow to adapt or can they mount a comeback?
When looking into the woes of MS, you see that the tech giant is a far way off from suffering. Their soft cushion provided by enterprise profits won't hold out forever, we're seeing drastic changes within a couple years such as Blackberry, LG, and HTC who found themselves quickly on the outside looking in after failing to keep up with the market.
The players who have enjoyed the most success in that timeframe are those which strove to offer the best without nickeling and diming their customers. Gmail is up to over 425 million users nine years removed from it's beta debut, making it the largest email service in the world. That's better than Microsoft's Hotmail/Outlook/Live, Yahoo Mail, and AOL despite each of those three having a 10+ year head start.
Gmail caught on quickly after providing users with 1GB worth of storage which at the time was a huge amount1CNET- Google plans to double Gmail capacity. Now all the top email services have followed suit, offering GB's worth of storage (even if they didn't their are plenty of free dedicated storage options as well) but Google's popularity had already been seeded.
Indeed Google excels in the field of low cost value, finding ways to offer drastically more value than their competitors by producing superior products (often for free). Gmail, Google Maps, Google Docs are all prime examples of how Google was able to capture a market with line of low cost, high value products.
Reaching Google's level of value is far from necessary however. Simply following the evolved business process is enough to ensure piles of profits. The iPhone excelled not only from excellent hardware but from free third-party apps in the App Store. Apps serve as the perfect example of low cost value. In the case of Apple they don't even need to develop the apps, simply provide a platform for others to present their apps. Google has demonstrated the profits available for being the go-between, the point is to get as many people as possible in the store.
Instead of worrying about charging users for every single aspect of their product, Google understands there is plenty of money to be made by earning loyal customers. This has allowed them to catch up and surpass other companies in whichever field it enters.
Microsoft's current vantage point should be pointing to some pretty obvious information- customers are no longer buying what they're selling. At least when there's another choice. Despite a significantly overhauled windows 8 line across every product they haven't made traction in a single market. There are of course many reasons and theories as to the causes for Microsoft's current predicament. But one is clear, stop nickel and diming customers.
It's very understandable why large institutions would work to protect their interests, but it should never pass the point of doing more harm than good. Microsoft is acting like the MPAA trying to forcibly extract as much money as they can from customers. If they were to ease up and look inwards they would find that people are more than happy to pay for quality products. But you can't expect people to going in hordes to pay money to see every regurgitated romcom produced.
Switching a paid service free is almost completely unheard of, since the people in charge making a certain amount of money related to the bottom line. It's unlikely any of them would make that decision, even if it's for the best. But there are still plenty of other ways a company can provide low cost value instead of scrapping entire divisions.
With it's vast tech resources Microsoft has plenty of opportunities to offer huge amounts of low cost value. Yet the powers-that-be refuse to act on any of these opportunities. The market was left scratching it's collective head after Microsoft recently announce the Surface 2, a respectable performance update with an uncanny resemblance to the same device that sold so poorly it recently warranted a $900 million dollar loss.
There are plenty of ways for Microsoft to increase the value of the Surface and Windows 8 line for relatively little cost.
Xbox One interactivity with Surface 2- At $500, Microsoft desperately needs more reasons for people to buy their console. 1)Streaming capabilities each way from Surface and Xbox. 2)Xbox easily pairs to Surface. 3)Ability to able to play Xbox One streamed to the Surface2(Sony does the equivalent on it's underpowered PS Vita handheld device).
Both devices are built off Windows 8, what's the reason of pushing every device onto the same platform if not to provide seamless integration?

Xbox Music- Actually a great music services that has recently become available for all devices, but still not building much of a customer base. This one actually falls mostly on marketing, who really seem to be dropping the ball on this one. Still- 1) Encourage sign up of email/live account instead of requiring it. Let the process to begin using Xbox music be a one step process, at least for the first week. The value of a pleasant first visit often decides whether the second visit every occurs. 2)Improve recommendations. Seriously this one shouldn't even have to be said, integrate it with Bing to improve discovery of new music. 3)This one's a tiny quirk, but refresh the session without reloading the webpage. If I add a song to the playlist, that should get incorporated immediately instead of needing to reload the playlist.
Office-Microsoft has already started offering office-lite for free with SkyDrive. But it's a little too lite past the point of usability. It's time to offer personal licenses for free without the advanced functionality. But you should still be able to make a graph with your own legend and titles, c'mon. Enterprises licenses will remain lucrative for the full product, and you'll start winning back over personal users. The last thing Microsoft wants is the Google generation to start making business decisions, but it's happening.

Very few companies are lucky enough to operate in a monopoly like Comcast or cable companies. For everybody else in the tech market, it makes sense to step up your game and start releasing expanded functionality without charging for every aspect. Companies are slowly coming around to this methodology, some too slow for their own good. Identifying Low Cost Value opportunities, companies can begin building a successful following.