
Microsoft is now a $1T company - ABS
https://www.theverge.com/2019/4/25/18515623/microsoft-worth-1-trillion-dollars-stock-price-value
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harrygeez
It's pretty amazing to see how much Microsoft has changed since Nadella took
helm (even though as some have stated before -- the efforts already began
before Ballmer left).

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jillesvangurp
Agreed. IMHO Nadella did a few things that made an enormous difference:

\- End the war on open source and instead embrace it. This unlocked a lot of
potential and put a stop to a lot of counter productive efforts in MS where
the only point was "not invented here". Some of these things were already
tolerated grudgingly under Balmer but Nadella made it company policy to
embrace it 100%. There are many examples of this ranging from reviving .net
via the mono ecosystem, launching mssql on linux, making linux a first class
citizen on Azure (now a key driver in the valuation), vs code studio, the
github acquisition, embracing chromium, etc. Through this, MS regained a lot
of the street credibility with developers that it used to have in the nineties
and subsequently lost.

\- Kill off windows phone and de-emphasize the windows brand in favor of an
office on any platform type approach. Office now runs great on ipads, os-x,
browsers, android, as well as windows laptops. Not having the distraction of
windows first means all the non windows teams that are making lots of money
(azure, office, etc) can now focus on doing the right thing on non MS
platforms instead of up-selling windows to their users. Balmer left Nadella
one huge headache which was the Nokia acquisition (I used to work there).
Nadella killed that off swiftly and decisively by effectively starving it of
resources and almost immediately cutting staff by the tens of thousands.

\- Fix the toxic work culture. There was a lot of negativity around this topic
under Balmer. It seems much less of an issue these days.

~~~
telltruth
People tend to see performance of CEOs by stock price. While it makes sense as
shareholder, it's a very narrow view. From revenues as well as profit
perspective Ballmer actually grew Microsoft _more_ than Nadella. Market just
decided not to reward that. Current growth centers including Azure, Surface
etc were all started and championed originally by Ballmer. It was Ballmer who
was willing to pour in investment like crazy in Hololens as well Bing. On the
other hand, Nadella has failed to add single new product in Microsoft's
portfolio during his half decade as CEO. Microsoft today has simply no
presence in home automation, smart assistants, wearable or self-driving
markets that have emerged during past 5 years. Nadella has literally missed
boat in every single new category that has came around during his time. All
the while its rivals have moved fast and picked up top spots in these new
markets. Windows revenues is still falling like crazy and obviously there is
no Smarthone story from Nadella yet.

The only thing that is compensating all these troubles is cloud and that too
had been hazy on actual utilization. The engineering execution in Azure begs a
question about how much worse it can get. Out of all providers, Azure
literally has been the least impressive from technical standpoint in
everything from UX to availability to features to documentation to API design.
Once cloud market saturates and race to bottom ensues, Microsoft could have
big trouble in maintaining current revenues and profits due to lack of new
products. It will take few quarters before stock market reacts but all of
these same people praising Nadella right now would suddenly come around and
brand him the worst CEO in history as soon as stock dips.

~~~
spdionis
Or you may say that Nadella chose to focus on improving Microsoft's core
business products to maintain the company's leadership in those areas through
quality instead of chasing new industry fads.

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telltruth
If you have ever interacted with Azure, you might have found that quality is
far less of a focus then selling it at any cost. It's a model Oracle has
practiced for long time. Just go give it a spin at portal.azure.com.

Also, these new markets are absolutely not fed. Smart speakers is already $7B
market, Apple/Android/Fitbit wearables at $10B and along with smart home are
the fastest growing markets. No one now doubts if cars would self-drive in
5-10 years. That would be a market that would transcend economies of many
countries and industries.

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scarface74
Neither Fitbit or Android wearables are exactly shining beacons of success
technically or in terms of profitability. The smart speaker business is also a
no profit business.

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mark_l_watson
I am surprised how my attitude about Microsoft has changed. My daily driver is
macOS and Linux but Office 365 is a fantastic value (for $100/year my wife and
I get a terabyte if cloud storage, web versions of all office apps for Linux
use, and if we want them native macOS apps). Azure is also a good cloud
service which I used for a year when I was accepted into Microsoft’s free
incubator program.

~~~
mxuribe
I agree with a few of your points...My attitude towards MS has certainly
improved - I can track it to happening around shortly after Satya Nadella
began steering the ship - and this shift in my attitude was not something I
expected to happen if I'm honest.

As to the value of office 365 - while philosophically i don't like this cloud
subscription model (So, if i stop paying, i lose "license" to use software?
Pfft)...i have to agree the price is very fair. I mean, even if I were to only
pay for the onedrive storage (without Word, Ecel, etc.), that onedrive alone
is worth $100/year. My only disappointment here is that i wish MS would pump
out a native, official onedrive client for linux already. Except for my dayjob
forcing me to use a windows machine for work, Linux is my personal daily
driver (and for side hustles I develop only on linux)...So I totally can
understand - from a capitalist perspective - why MS would not distribute the
full office 365 suite for linux...but why not at least just onedrive? I'm
pretty sure that many people like us who use linux would gladly use a native
onedrive client. (And, while i give much props to existing onedrive clients
[1][2], sorry, but i need official support from MS.)

I have not used Azure yet in any meaningful capacity, so can't say MS is doing
better or worse here...but the fact that they quickly focus on supporting
linux, and their pricing isn't bad is inspiring.

You didn't mention MS' recent privacy/data control issues related to windows
10 telemetry - this is a big annoyance for me...but hey, no one is perfect.
And, i mean, this is the same company whose previous leader considered linux a
cancer...so, even with the little disappointments that i feel about MS, i
still have to give them big kudos for their positive change regardless of what
wall street thinks that they're worth.

[1] =
[https://github.com/skilion/onedrive](https://github.com/skilion/onedrive)

[2] =
[https://github.com/abraunegg/onedrive](https://github.com/abraunegg/onedrive)

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camillomiller
I find this worrying. I know this is market valuation and it's not comparable,
but this is nominally more than the GDP of 168 countries in the world. The
fact that 5 enormous companies are owning the future through tech is an
astounding fact that can't lead to any positive outcome for our global
society.

~~~
buybackoff
MSFT gross margin is 72B, this number better matches GDP and its c.70 rank by
nominal GDP. Interestingly, Luxembourg has $69B GDP with 590K population,
MSFT's "population" is 131K. Each MSFT citizen is 4.5x more productive. And
Luxembourg is the top country by nominal GDP per capita.

~~~
Traster
Is Gross Margin closest to GDP? In GDP when I sell Paul a loaf of bread for £5
I'll probably make £4 gross margin but my revenue is £5. GDP measures the
total cost of the output, not the output minus the costs (in fact for the GDP
of the whole system it's output PLUS costs since the costs count as outputs of
other people in the economy)

I think a better comparison would be revenue surely?

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buybackoff
Company costs are revenues to someone else (even payroll is then spent on
goods & services). Revenue will double count. Also I just did a very quick
number lookup without pretending for scientific correctness, just became
curious after reading the parent comment.

GDP is C + I + G + NX. In MSFT 10-K R&D are after the gross profit, so I is
there. C attributable to MSFT is sales less costs to avoid double counting. G
are taxes which are also there. We should also add D&A and Capex normally as a
part of I, but for software companies it's mainly R&D that is allowed to be
recognized as cost (which gives huge tax benefits and should stimulate R&D
activity, in theory).

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puranjay
Two things people don't talk about a lot are Surface and XBox. Microsoft has
gone from a distant threat to a legitimate competitor in both these
categories, especially with Surface.

People used to think that Microsoft can't do hardware, but Surface has shown
that MS can be more competent than most laptop manufacturers.

~~~
rubber_duck
Still no thunderbolt in all their portables ? I've used a Surface Pro before
from a coworker and in general I liked the device but no thunderbolt 3 was a
deal breaker for me.

It sounds so frivolous when describing but in practice I noticed having a
single cable thunderbolt setup is a huge win for me - I used to avoid moving
my laptop because plugging in 3 cables and keeping them organized on the desk
was a chore. I have to work on two laptops (I sometimes take my work laptop
home) so dock is not an option either.

With thunderbolt this became a non-issue - no docks, no messy cables, just one
clean USB-C cable connecting 5K monitor, charger, USB hub, network adapter.

~~~
tallanvor
That USB-C cable still has to end at some sort of dock to connect all of those
devices. Hopefully the Surface connector will be replaced by USB-C at some
point, but as it is, it's still one cable to the dock to provide power and let
you connect all your devices.

~~~
rubber_duck
My monitor ([https://www.lg.com/us/support-
product/lg-34WK95U-W](https://www.lg.com/us/support-product/lg-34WK95U-W)) has
a USB hub and thunderbolt input + power output - no dock required.

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happppy
Congratulation Microsoft employees (if anyone is lurking here)

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chmod775
*congratulations those who own stock.

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fxfan
Microsoft is closing fast on AWS. This is going to be an XBox vs PS again
except with no japanese loyalty to help the PS.

Better link- [https://www.cnbc.com/2019/04/25/microsoft-hits-1-trillion-
ma...](https://www.cnbc.com/2019/04/25/microsoft-hits-1-trillion-market-cap-
for-the-first-time-on-earnings.html) without the verge fluff

~~~
skc
It's never made clear exactly which piece of AWS that Azure is growing faster
than.

I think Office 365 is counted as part of Azure and it's extremely popular, but
that wouldn't make it an apples to apples comparison wrt AWS.

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actuator
No, it isn't counted. Office 365 is counted in Productivity and Business
division. [1]

[1] [https://www.microsoft.com/en-
us/Investor/earnings/FY-2019-Q3...](https://www.microsoft.com/en-
us/Investor/earnings/FY-2019-Q3/press-release-webcast)

~~~
skc
Ahh, thanks for the info

