Quote: (07-20-2013 04:05 PM)TheSlayer Wrote:
Microsoft is not in big trouble. They may not be able to post the big earnings they used to and many of their products you listed aren't doing well. But they will always be in the game because of windows. Almost all business still use windows and their market share for all the different windows is still close to 90%. And I don't see that changing.
They are just fine, it's just that they may not be able to consistently grow as much as Wall Street would like.
It makes sense to remember that Windows only 15% of MSFT's value. Friday's drop basically discounted the entire value of the Windows business.
MSFT #1 cash cow is Office, which grew at 2% if you back out the delayed revenue recognition due to upgrade offers for Office 2013 (if you don't do this, Office revenue grew 14%). Office 365 now has over one million subscribers and $1.5 billion annual revenue run rate. In the future, the subscription model is expected to smooth out the office division's revenue stream.
MSFT's #2 cash cow is servers with 20% of revenue, with a nice 8% growth. Azure cloud sales are now over $1 billion, and has added 25% additional enterprise customers in the last quarter. Their database software apparently grew 16%!!! I have no idea how good their SQL server product is, or why someone would pay instead of using free open-source software, but people are apparently willing to pay.
The rest of Microsoft has the Windows division, online services (Bing et al) and the entertainment division. Someone mentioned that Windows Phone grew a lot - yeah, their revenue... but a pretty major portion of that revenue is patent licensing fees collected from Android phone makers. MSFT makes more money from Android than Google!
So no, MSFT isn't going anywhere.
*disclosure* -- I'm very long MSFT.