When people think of Microsoft (MSFT) they usually think of it as an old, malfunctioning company of the past. They usually think it is a two product company (with just Windows and Office) that was lucky enough to succeed in a third one (XBOX) but nothing more than that.
However nothing could be further from the truth. Microsoft has several products and services to offer to consumers and businesses all over the world. Today I will only focus to a few of them that are not so well-known but have the potential to change Microsoft’s revenue mix and boost its revenue growth dramatically. All these services/products have one thing in common, they are offered through the cloud.
Azure is Microsoft’s solution to businesses seeking a flexible and cost-efficient way to use internal cloud based applications of their own or other’s design. It also allows businesses that have a variable need for IT infrastructure (computing power, storage etc.) to use as much as they need when they need it through Microsoft’s cloud platform.
Azure has become one of Microsoft’s "star" products since it reached $1 billion in annual revenue and has increased subscriptions by 48% during the past 6 months. Azure commands a 20% market in its market and its main competitor Amazon’s (AMZN) AWS which has 71%. However Azure is rapidly gaining ground and according to Forester Research it could reach 35% market share within the next year.
Skype is the well-known communication app that Microsoft bought in 2011. After becoming a part of Microsoft Skype has done extremely well. A third of the world’s voice calls are done through Skype. Microsoft integrated Skype with its new Outlook.com platform increasing the attractiveness of both these products. Furthermore, Skype along with Lync (an instant messaging, VOIP and video conferencing app) have reached $2 billion in annual revenue and continue to grow.
Office 365 is Microsoft’s transformation of Office to the SaaS (Software as a Service) business model and so far it has done an excellent job. Office 365 is growing and has already reached the $1 billion annual revenue mark. Through this change Microsoft gains two things; first it enjoys increased customer loyalty and the end of pirated copies of its Office products. Second it will be possible to offer constant upgrades to users staying always on top of their needs.
Azure, Skype, Lync and Office 365 are the three products that are leading a wider transformation that happening in Microsoft. If you add in the picture Microsoft Dynamics (ERP & CRM systems) and Sharepoint (a team collaboration and project management software) it becomes quite clear that Microsoft is evolving to one-stop shop for essential productivity-boosting applications a modern enterprise is bound to have.
Source: http://seekingalpha.com/article/1424161-microsoft-to-get-a-major-revenue-growth-boost-from-cloud-computing