The Future of the Microsoft Corporation Looks Stronger Than Anticipated

Microsoft Corporation

Most individuals have encountered a Microsoft Office product, or a Microsoft system; these include any of its computers, cellphones, video-game consoles or software, and this is why many in the industry are believing that the future of Microsoft Corporation looks stronger than previously anticipated. At the close of the stock market today (June 28), Microsoft Corporation, which is valued at $69.3 billion dollars, closed at $44.37 per share while Google closed at $521.52 per share. While there is a large difference between their history and longevity, there are similarities in both their scope as well as their mission, and these two companies are often perceived as rivals. However, Microsoft Corporation is listed as the second most valuable brand, according to Forbes. The only company to outshine Microsoft Corporation was Apple – valued at $145.3 billion dollars, which closed in the stock market today at $124.53 per share.

Microsoft has a long history; it was started in 1975 by William Gates, known to most as simply Bill Gates. The innovation of the Microsoft Office programs and Internet Explorer browser put Microsoft ahead of the competition. Microsoft software has since been adopted in both offices, as well as schools worldwide. In fact, as of today, 90 percent of the world’s personal computers (PCs) continue to run Windows and 1.2 billion people use Microsoft Office. Microsoft has the business of multiple enterprises, due to them being so heavily reliant on Microsoft products that it would be too costly and difficult to transition to free data management software, such as Google.

Microsoft’s new CEO, Satya Nadella (who is still unknown to most) is focused on attracting developers, funding Research and Development (R &D) to the tune of $11 billion dollars, as well as developing fun, innovative projects such as the HoloLens, which will create holographic images. Equally importantly to revolutionizing the products, Nadella is revolutionizing the business models used by the corporation. The first novel implementation is the free Windows 10 launch, which will occur on July 29. Everyone who downloads the beta version will be upgraded to Windows 10 for free, upon the time the software becomes available. The goal is to get all users to have one software in common, gain market share and gain a bit of love in the process. Additionally, this software update is expected to be the last major update to a software that has had many hits, along with many failures.

Within the CEO’s first year in 2014, Microsoft saw its most recent market high in 14 years, due to Nadella’s influence. Under Nadella’s leadership, Microsoft released Microsoft Office for the iPad, along with investing $2.5 billion in purchasing Minecraft a popular video game, and investing heavily in Xbox One, the latest of the company’s gaming consoles. A priority for the company has always been the acquisition and expansion of cloud-based products.

The biggest breaking news is that, although Microsoft’s largest threat seemed to be Google, the corporation has just played a big hand by giving its display ads to AOL advertising. AOL will now make Bing its search engine over the next decade. Just last year, Google lost its partnership with Mozilla and it cost them four percent of the market share. Thanks to this deal, the future of the Microsoft Corporation looks stronger than anticipated, even if they do not overtake Yahoo or Google with Bing’s numbers.

Some of the challenges that face Microsoft is that while the company is strong at developing software, their hardware such as the Microsoft Surface and their Windows Phones are not as widely adopted; in fact, phones utilizing Windows software are only two point eight percent of all phones worldwide. Additionally, Google may choose to focus more on hardware with company-run software and the expansion of the Google Chromebook, in order to slowly overtake the variety of PCs using Microsoft software. Although they are far from reaching the brand value of Apple, the future of the Microsoft Corporation looks stronger than previously anticipated.

By Olivia Uribe-Mutal

Edited by Chanel van der Woodsen

Sources:

Bloomberg – Microsoft Corporation (MSFT:NASDAQ GS)

The Motley Fool – SWOT Analysis of Microsoft Corporation

Forbes – Apple And Microsoft Head The World’s Most Valuable Brands 2015

Business Insider – Microsoft is getting out of the display ad business, and up to 1,200 employees will move to AOL

Image Courtesy of Mike Mozar’s Flickr Page – Creative Commons License

3 Responses to "The Future of the Microsoft Corporation Looks Stronger Than Anticipated"

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  3. John   June 30, 2015 at 8:48 am

    Their market cap (value) is approximately $350B, not $70B. They probably have $70B in cash reserves

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