3 min read
The move from Windows to Cloud
Microsoft’s success can be attributed to its able leadership under CEO Satya Nadella and his focus on moving away from the flagship Windows operating system and focusing on cloud-computing services with long-term business contracts.
The organization’s biggest growth has happened in its Azure Cloud platform. Cloud computing now accounts for more than a quarter of Microsoft’s revenue rivaling Amazon, which is also a leading provider. Microsoft is also building new products and features for Azure. Last month, it announced container support for Azure Cognitive Services to build intelligent applications. In October, it invested in Grab to together conquer the Southeast Asian on-demand services market with Azure’s Intelligent Cloud. In September, at the Ignite 2018, the company announced major changes and improvements to their cloud offering. It also came up with Azure Functions 2.0 with better workload support for serverless, general availability of Microsoft’s Immutable storage for Azure Storage Blobs, and Azure DevOps.
Wedbush analyst Dan Ives commented that “Azure is still in its early days, meaning there’s plenty of room for growth, especially considering the company’s large customer base for Office and other products. While the tech carnage seen over the last month has been brutal, shares of (Microsoft) continue to hold up like the Rock of Gibraltar” he said.
Focus on business and values
Microsoft has also prioritized business-oriented services such as Office and other workplace software, as well as newer additions such as LinkedIn and Skype. In 2016, Microsoft bought LinkedIn, the social network for professionals, for $26.2 billion. This year, Microsoft paid $7.5 billion for GitHub, an open software platform used by 28 million programmers.
Another reason Microsoft is flourishing is because of its focus on upholding its founding values without compromising on issues like internet censorship and surveillance. Daniel Morgan, senior portfolio manager for Synovus Trust, says “Microsoft is outperforming its tech rivals in part because it doesn’t face as much regulatory scrutiny as advertising-hungry Google and Facebook, which have attracted controversy over their data-harvesting practices. Unlike Netflix, it’s not on a hunt for a diminishing number of international subscribers. And while Amazon also has a strong cloud business, it’s still more dependent on online retail.”
In a recent episode of Pivot with Kara Swisher and Scott Galloway, the two speakers also talked about why Microsoft is more valuable than Apple. Scott said that Microsoft’s success is because of Nadella’s decision of diversifying Microsoft’s business into enough verticals which is the reason why the company hasn’t been as impacted by tech stocks’ recent decline. He argues that Satya Nadella deserves the title of “tech CEO of the year”.