Microsoft $MSFT research mega Thread π§΅π
This will be updated as we read more about their business.
This will be updated as we read more about their business.
1/ Starting with the 2021 AR:
"Tech as a percentage of total GDP will double from 5 to 10 percent by 2030. But the most notable thing is what will happen to the other 90 percent.
Digital transformation that was projected to happen over the next 10 years is happening today."
"Tech as a percentage of total GDP will double from 5 to 10 percent by 2030. But the most notable thing is what will happen to the other 90 percent.
Digital transformation that was projected to happen over the next 10 years is happening today."
2/ AI to the rescue: "No asset is more strategic than data. In the next three years, weβll create more data than we did in the past 10. But our ability to make sense of data is growing more difficult as the volume, velocity, and variety expand."
3/ Diversified Business model:
a. Operating systems
b. Cross-device productivity applications
c. Server applications
d. Business solution applications
e. Desktop and server management tools
f. Software development tools
g. & Video games.
a. Operating systems
b. Cross-device productivity applications
c. Server applications
d. Business solution applications
e. Desktop and server management tools
f. Software development tools
g. & Video games.
4/ They also design and sell devices, including PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories.
5/ Their R&D focuses on their 3 business segments
- Productivity tools: Microsoft 365 (Office, Viva, Relationship sales, Dynamics, Power platform), LinkedIn.
- Intelligent cloud: Azure
- Increasing personal computing: Windows 11, Surface, Xbox
- Productivity tools: Microsoft 365 (Office, Viva, Relationship sales, Dynamics, Power platform), LinkedIn.
- Intelligent cloud: Azure
- Increasing personal computing: Windows 11, Surface, Xbox
6/ Here's the latest quarter.
Made $51.7B in rev with 43% operating & 36% net margins
Cloud rev at $22B+ growing at 32%
Teams with 27cr MAUs (90% of Fortune 500 are customers)
Microsoft 365 subscribers at 5.6cr
R&D at $5.8B
Returned $10.9B to shareholders!
Made $51.7B in rev with 43% operating & 36% net margins
Cloud rev at $22B+ growing at 32%
Teams with 27cr MAUs (90% of Fortune 500 are customers)
Microsoft 365 subscribers at 5.6cr
R&D at $5.8B
Returned $10.9B to shareholders!
7/ It's all about the cloud business: building more capacity & also seeing strong growth in billings (+ collections)
"have more data center regions than any other provider, delivering fast access to cloud services, while meeting data residency requirements."
"have more data center regions than any other provider, delivering fast access to cloud services, while meeting data residency requirements."
8/ Q4 2021 concall:
"From smart factories to smart buildings to smart cities, we are helping organizations use the combination of Azure IoT, Digital Twins, and Mesh, to help digitize people, places, and things, in order to visualize, simulate, and analyze any business process."
"From smart factories to smart buildings to smart cities, we are helping organizations use the combination of Azure IoT, Digital Twins, and Mesh, to help digitize people, places, and things, in order to visualize, simulate, and analyze any business process."
9/ "In AI, we have one of the most powerful supercomputers in the cloud, and weβre using it not only to train new models but to deliver them as platforms to our customers."
10/ "To developers: From GitHub to Visual Studio, to Azure PaaS services, we have the most popular tools to help every developer go from idea to code and code to cloud."
+ Talking of Embedded security
+ Talking of Embedded security
11/ "Low code/no-code tools are rapidly becoming a priority for every organizationβs digital capability building."
Doing it in-house= less IT spending.
More Automation tools= fewer labor problems (a thing of the west)
Doing it in-house= less IT spending.
More Automation tools= fewer labor problems (a thing of the west)
12/ On LinkedIn: "We are experiencing a Great Reshuffle across the labor market, as more people in more places than ever rethink how, where, and why they work."
Confirmed hires were up 110% YoY, all LinkedIn sub-segments have reached the $1B milestones.
Confirmed hires were up 110% YoY, all LinkedIn sub-segments have reached the $1B milestones.
13/ "with Mesh for Teams, weβre bringing the metaverse to Teams, helping employees at organizations like Accenture access a shared immersive experience where they can have watercooler-type conversations, and even whiteboarding sessions."
14/ "Weβve seen a structural shift in PC demand. More than ever, people are turning to PCs to exercise their agency and unleash their creativity with increases in time spent on PCs, and PCs per household."
15/ "There are now more than 140 crores monthly active devices running Windows 10 or Windows 11, and theyβre a powerful on-ramp for both our first-party and third-party services.
Windows 11 users engage with the Windows app store at nearly 3X the rate as Windows 10."
Windows 11 users engage with the Windows app store at nearly 3X the rate as Windows 10."
16/ Advertising business:
"Over the past 12 months, our total advertising revenue, inclusive of LinkedIn, surpassed $10 billion ex-TAC."
"Over the past 12 months, our total advertising revenue, inclusive of LinkedIn, surpassed $10 billion ex-TAC."
17/ "Cybercrime is the number one threat facing every business today"
"Leader in more cyber security categories β now 19 β than any other provider."
Security business revenue surpassed $15 billion over the past 12 months, up nearly 45% YoY.
"Leader in more cyber security categories β now 19 β than any other provider."
Security business revenue surpassed $15 billion over the past 12 months, up nearly 45% YoY.
18/ Gaming: "The big bets we have made across content, community, and cloud over the past few years are paying off."
19/ "Coming out of the pandemic, we are seeing actually a lot of constraints in the economy, and the only resource, as I said in my remarks, that can help drive productivity while keeping costs down, is digital tech."
Why IT trend continues to strengthen for the time being.
Why IT trend continues to strengthen for the time being.
20/ On the Metaverse: "The way we see this is as an opportunity in a very classic Microsoft sense, both at the platform infrastructure level and on the application level."
The next wave of the internet: A more open world.
The next wave of the internet: A more open world.
21/ Recently, Microsoft acquired Activision for $68.7B (A yearβs worth of OCF)
Largest acquisition in itβs history after paying $26B to acquire LinkedIn in 2016.
Brands: Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush, etc.
Largest acquisition in itβs history after paying $26B to acquire LinkedIn in 2016.
Brands: Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush, etc.
22/ Xbox Game Pass (video game subscription services) now has 2.5 crore subscribers, as Microsoft continues to acquire studios to boost the subscription service.
Had acquired another games studio Bethesda (ZeniMax Media) for $7.5 billion a year earlier.
Had acquired another games studio Bethesda (ZeniMax Media) for $7.5 billion a year earlier.
23/ The deal is expected to take nearly 18 months to complete.
This is due to the regulatory issues (anti-trust) that can crop up, possibly not even allowing the deal to happen; a risk.
More details π
This is due to the regulatory issues (anti-trust) that can crop up, possibly not even allowing the deal to happen; a risk.
More details π
24/ Concall that followed
300cr consumers around the world play games, & expect this no. to reach 450cr by 2030 as new generations turn to games for entertainment, community, & a sense of achievement.
Seeing more players, more streamers, more titles, & more new game publishers.
300cr consumers around the world play games, & expect this no. to reach 450cr by 2030 as new generations turn to games for entertainment, community, & a sense of achievement.
Seeing more players, more streamers, more titles, & more new game publishers.
25/ "But too much friction still exists today between content, consumption, and commerce. We need to make it easier for people to connect and play great games, wherever, whenever and however they want.'
In the Toll road business.
In the Toll road business.
26/ "This transaction significantly expands our presence in mobile, the largest segment in the gaming business. Activision Blizzardβs King division is one of the global leaders in mobile gaming."
Activision has 40cr monthly active players across 190 countries.
Activision has 40cr monthly active players across 190 countries.
27/ Cloud gaming is the future.
28/ When this transaction closes, Microsoft Gaming will be the worldβs number 3 gaming company by revenue, behind Tencent and Sony.
29/ What does Microsoft's management consider when going for M&A? TAM-expansive opportunities in high-growth markets.
Target: Increased engagement and monetization across the Xbox platform+ additional growth in Game Pass subscriber base.
Target: Increased engagement and monetization across the Xbox platform+ additional growth in Game Pass subscriber base.
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