Thursday , October 21 2021

How a company like Microsoft came to be the same as Apple



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Satya Nadella was appointed Microsoft CEO in 2014. Since then, the company's value has almost tripled in the stock market.

Just a few years ago,

Microsoft

it was considered a clumsy company that lived on its own
success stories from the past in the technology sector.

It was huge and still quite profitable, but the company lost its luster, as well as lagging behind or failing on the markets of the future, such as

mobile telephony

, searches, online advertising and cloud computing. Its share price was occupied, and it grew by only three percent in the decade that ended in 2012.

However, its current history is very different. Microsoft competes side-by-side with Apple for the title of the world's most valuable company, worth more than $ 850 billion, thanks to a quotation on the stock market that has grown by 30 percent over the years. the last twelve months.

What happened?

The company focused on its advantages

There is a short-term explanation for Microsoft's rise in the market, and there is also another long-term.

The short-term response, related to stock trading, is that Microsoft is better than others during the recent sale of shares in technology companies. Apple investors are worried
fall in sales of iPhone.
Facebook and Google face persistent assaults over their role in spreading false news and conspiracy theories; there is also concern among investors that their private policies can deter users and advertisers.

However, the most important and lasting answer is that Microsoft has become a case study of how a dominant company can once again rely on its strengths and avoid being a prisoner from its past. She fully embraced cloud computing, abandoned abusive foray into the smartphone market, and returned to its roots, primarily as a provider of technology for business users.

That strategy was underlined by
Satya Sade was shortly after she got up
CEO of the company in 2014. Since then, Microsoft's share price has almost tripled.

He betting big on the cloud and winning


Nadella made the cloud service a priority, and the company is now the second largest provider, after the Amazon
Nadella made the cloud service a priority, and the company is now the second largest provider, after the Amazon

Microsoft's way to cloud computing – processing, storing and using software as an Internet service from a remote data center – was long and was sometimes interrupted.

Its precursors to cloud computing date back to the 1990s, with Microsoft's MSN online service, and later with them
Bing Search Engine. In 2010, four years after Amazon entered the cloud market, Microsoft introduced its service. However, according to analysts, she had no offer comparable to that of Amazon until 2013.

Even then, Microsoft's cloud service was a secondary matter. The corporate center of gravity continued to be Windows, its operating system, the axis of wealth and the power of the company during the era of the personal computer. It changed after Nadella replaced
Steve Ballmer, who has been the CEO for fourteen years.

Nadella made the cloud service a priority, and the company now has the second place, following the Amazon. Microsoft has almost doubled its market share of thirteen percent since the end of 2015, according to the Synergy Research Group. Amazon's share is steady, with 33 percent in the same period.

Microsoft has also redesigned its popular Office applications, such as Word, Excel and PowerPoint in the cloud version,
Office 365. This offer serves people who want to use the software as a service on the Internet and give Microsoft a competitive edge over Internet providers such as Google.

The financial results of the change began little by little, but now everything is raising the speed. In the year that ended in June, Microsoft's revenue increased by fifteen percent, reaching $ 110,000 million, and operating profits rose to $ 35,000 million, an increase of thirteen percent.

"The essence of what Satya Nadella did is a dramatic change in the cloud," said David B. Yoofi, a Harvard Business School professor. "Microsoft has again turned into a high-growth business".

It is the perception that Microsoft is at a high speed of growth that has spurred its higher share price.

Moving away from unsuccessful bets


Microsoft acquired Nokia's mobile division, but a few years later decided to close this unit to devote to the development of applications and services for Android and iOS
Microsoft acquired Nokia's mobile division, but a few years later decided to close this unit to devote to the development of applications and services for Android and iOS

When Microsoft
received Nokia in 2013, Ballmer praised the decision as "a bold step towards the future" with

Windows Phone

. Two years later, Nadella moved away from that future; claimed responsibility 7600 million dollars, almost the entire value of the purchase, and fired 7800 workers.

Microsoft would not compete with the leaders of smartphones, Apple, Google, and Samsung. Instead, it will focus on application development and other types of software for business users.

The company has a successful consumer franchise, thanks to its operations

video games

and

consoles


Xbox

. However, it is a separate unit and although it generates revenues of $ 10 billion, it is less than ten percent of the company's total sales.

He opened his technology and his culture

Under Nadella, Microsoft has relaxed.

Windows

it will no longer be its center of gravity or its anchor. Microsoft's applications will not only work on Macintosh software but also on other operating systems. Free open source software, after being anathema to Microsoft, was adopted as a vital tool for the modern software development.

Nadela preached a mentality that looked outward. "We have to be insatiable in our desire to learn from abroad and to learn it," he wrote in his book Hit Heat, published last year.

The company's financial results – and stock prices – suggest that Nadella's formula works.

"The old Windows landscape as an anchor slowed down innovation," says Michael A. Cusumano, a professor at the Sloan Management School at the Massachusetts Institute of Technology. "The company has changed culturally, Microsoft is again a thrilling job."

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