Microsoft might be entering the race to become the world’s first trillion dollar company, joining a host of other familiar global giants.
Who else is in the race?
Before Microsoft’s entry in this race, it was widely believed that one of Apple, Alphabet (Google’s parent company) or Amazon would cross the line first.
Apple (as many would have expected) is currently leading the pack and is valued at $870 billion. Amazon overtook Alphabet as recently as last week and is now behind Apple with a valuation of $768 billion. Though Amazon frog leapt Alphabet, the two are still neck and neck, considering Alphabet’s $762.5 billion valuation. Microsoft is trailing all the above with a valuation of $650 billion.
Microsoft should not fret too much as analysts at Morgan Stanley have predicted that they will cross the one-trillion mark within a year. What was more interesting to me was the drivers of this expected growth
The Cloud!
Microsoft’s cloud-based services have been seeing massive growth, particularly Microsoft Office 365 and the Azure hosting service.
Microsoft 365 is a grouping of subscriptions that provide productivity software and services, from the popular Microsoft Word to the more niche OneNote and Access.
Azure, on the other hand, is a cloud computing service used in building, testing, deploying and managing applications and services through a global network of Microsoft servers. Basically, developers can create the code for applications using tools provided by Azure and then virtual machines execute the rules of the applications using Windows server.
Enough of the technicalities. Azure is currently only behind Amazon Web Services in the cloud computing spacing but has been doubling its revenues year-on-year and is expected to continue growing until 2020.
Gaming
As you may (or may not) know, Microsoft is behind the popular X-box gaming console and since releasing the X-box One in Microsoft has sold about 36 million units (as of 2018) worldwide. The gaming business is expected to continue pumping in revenues.
Social Media
Microsoft and social media rarely appear in the same sentence but Microsoft is actually the owner of Linked-in. The professional networking platform was acquired by Microsoft in 2016 for $26.2 billion. Linked-In but is expected to become an advertising giant going forward.
It will be interesting to see who crosses the one trillion mark first.
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9 comments
yes they will
we had lots of trillion dollar companies in Zimbabwe 9 years ago
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This is going to be an Interesting race unless if the Arabs specifically Saudi Amarco, don’t pull an amazing last minute trick considering they have an IPO schedules with the company aiming to come out in the trillion dollar threshold. Cause IPO is schedule for the second half of the year which is just 3 months away and it has a valuation of $2 trillion.
Interesting article, yesterday i got a notification when this article was posted and went straight to Google, i also learned that Microsoft owns Skype
Microsoft is perhaps a little late to the party. Yes they r making the right moves. The recent departure of head of windows was long overdue as Microsoft has been stuck for decades in its windows code. AI should have been prefered strategy for Microsoft in the early 2000s. Windows has been a dinosaur both in functionality and AI integration. The biggest threat right now could be a startup that figures out hardware and user interface for an AI OS. Android and Apple are much nearer the holy grail.
I disagree, the world was not ready for AI in the early 2000s (IBM Watson is testament to this) and AI is still not ready as primary interface on a desktop computer, it works best in a mobile on-person form-factor that requires more of touch interaction and where voice is a ubiquitous.
The best Microsoft has done is unification of the Windows platform where the OS works on 10 form-factors (that is massive), the next evolution from there is seamless integration with the cloud and AI and they have done an excellent job with Microsoft Cloud, Azure and Cortana (Siri is years behind Cortana by the way) Windows is more relevant in the desktop and productivity field more than ever, so they’re more on the right path.
What Microsoft however missed was an OS for mobile devices particularly smartphones as they missed the boat with Windows Mobile and Windows Phone.
Btw, you do realise that those $600 billion, $700 billion numbers are valuations based on what stock markets ‘speculate’ or ‘guess’ is the worth of a company. The real value of a company is found on the balance sheet and income statement.
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