New Partnership between Microsoft and Dell
Recently, Microsoft and Dell declared partnership in an attempt to push for Microsoft’s new Surface Pro product. This strategy was in response to the heated market competition with Apple’s iPad Pro. In addition, partnering with Dell will allow Microsoft to become one step closer to its goal of venturing more into the corporate environment. On the flip side, Apple has been partnering with IT giants, such as Cisco, to improve cloud-computing elements in their product and strengthen their performance in the tablet market. Historically, Microsoft’s first version of the Surface tablet caused the company a ~$900 million loss. After many refinements, the tablet is finally bringing in revenue. Microsoft and Dell’s relationship began in 2013 when former CEO of Microsoft, Steve Ballmer, loaned Dell $2 billion for the $24.9 billion buyout that allowed Dell to become a private company. Since then, Dell and Microsoft had several other encounters, leading to their collaboration today. This power move will allow Microsoft to tap into Dell’s strong reseller network to generate sales and momentum for Surface Pro and also allow Dell to have a powerful partner to compete with the software giant, Apple.
This new partnership reflects the idea of structural balance. Microsoft, Dell, and Apple all have large market shares and are considered big names in the technological field. Microsoft and Dell are teaming up (they share a positive edge) to compete with the leading tech company on the market right now, Apple. In particular, the competition in the tablet industry between Apple and Microsoft and the competition in the PC industry between Apple and Dell make Apple a common enemy. Therefore, the two negative ties and one positive tie reflect the idea of structural balance among three nodes (or in this case, companies). In addition, looking at the overall partnerships or networks, Apple’s collaborations with its partners such as Cisco and Microsoft’s partnership with HP and Dell satisfies the structural balance theory as component X (Apple and its partnerships) and component Y (Microsoft and its partners) are enemies with each other but the relations within each component is positive. Unbalanced structures will cause stress in relationships, and in this case, it will cause stress in the competition and wellness of the market. As Apple continuously grows exponentially, it makes sense for other companies to partner up. Similarly, Microsoft and Dell have the strong incentive to collaborate because they share strong negative or competitive ties with Apple. Because they share a common competitor (A and B have strong ties with C), they are more likely to partner up (A and B will form an edge), an idea that is similar to the triadic closure concept spoken about in class.
Source:
Microsoft Surface and Dell stick it to Apple in the enterprise