How Microsoft (MSFT) is able Establish Dominance in the Markets

Microsoft’s Growth Strategy

In the past several years Microsoft has reoriented its products to the cloud, which has driven sales higher. Microsoft’s commercial cloud business, which includes Azure, Office 365 Commercial, the commercial portion of LinkedIn, and Dynamics 365 accounted for more than 73% of the company’s revenue growth in 2018 and 2019. Revenue from the Azure cloud services business, which ranks second in size only to Amazon.com’s AWS (Amazon Web Services), jumped 64% in 2019 from 2018.

The company offers customers subscriptions to cloud-based versions of its familiar Office productivity suite (Word, Excel, PowerPoint), and other popular programs that fueled robust growth in 2018 and 2019.

With its strong gaming business, MSFT has also been looking to own mass social media platforms. Its last big social media deal was the $26.2 billion acquisition of LinkedIn in 2016, while it failed in its bid for short video app TikTok’s U.S. assets in September last year.

Recently, the Financial Times reported about the company’s interest in buying social media platform Pinterest Inc.

 

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The company might seem invulnerable, but it faces unrelenting competition throughout its portfolio. Amazon, IBM, Google are top rivals in web services and Apple and Google compete in operating systems and software. Those two companies also have thriving mobile phone businesses, which Microsoft lacks. In gaming, Electronic Arts, Activision-Blizzard, and others offer blockbuster games to players.

Mergers and Acquisitions

In 2020, they acquired Soft motive, a world-leading provider of robotic process automation (RPA). By bringing Soft motive’s desktop automation together with the existing Microsoft Power Automate capabilities, at uniquely affordable pricing, MSFT is further democratizing RPA and enabling everyone to create bots to automate manual business processes.

Also in 2020, they agreed to acquire Metaswitch Networks, a leading provider of virtualized network software and voice, data and communications solutions for operators. Microsoft intends to leverage the talent and technology of these two organizations, extending the Azure platform to both deploy and grow these capabilities at scale in a way that is secure, efficient and creates a sustainable ecosystem.

In early 2020, they acquired Affirmed Network, fully virtualized, cloud-native mobile network solutions enable operators to simplify network operations, reduce costs and rapidly create and launch new revenue-generating services.

In 2019 Microsoft acquired Movere, a developer of software for moving data to cloud computing environments. The deal will help Microsoft migrate customers to its Azure cloud.

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Jake Page
Investor of 4 years and Managing Editor of Money Midnight, a news outlet focused on highly profitable investment ideas and bold underground research.
Articles: 42

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