What Does the Future Hold for Microsoft?

Over the years, many companies tried to permanently disrupt Microsoft’s (MSFT) business. In 2000, Federal regulators took a shot at splitting Microsoft just to see their struggles disenchanted on appeal, leading to a settlement.  Later, cloud computing endangered to decrease or even eradicate user’s dependence on PCs and the windows operating system.

Microsoft has efficiently survived the test of time, and in spite of all the problems, the company is generating $85.3 billion in FY16 revenue. More than $40 billion of that amount is derived from sales in the More Personal Computing group that is liable for sales of Windows licenses.

However, Microsoft is on its way to transform itself into a Cloud First company.
The company has swiftly shifted its enterprise software products from on-premise installation to a cloud centred subscription. According to the Q2FY16 report of Synergy Research Group, Microsoft has dethroned Salesforce to arise as the new leader in worldwide enterprise SaaS industry.

Moving onward, Synergy Research Group’s report described that the company’s collaboration software SharePoint and Office 365 subscription products helped it to surpass Salesforce.
What Does the Future Hold for Microsoft?
Image by PIX1861 / Pixabay
The company’s SaaS growth story is driven by its leading position in enterprise cloud collaboration software.

As a matter of fact, Valve launched its own PC OS known as SteamOS. However, it was available in beta version for more than two years. Valve has managed to appeal to only trivial gaming enthusiast firms that use its SteamOS, excluding Dell’s Alienware Steam Machine.

On the contrary, the company is placing its focus on PC gaming to maintain the relevancy of the Windows platform. Meanwhile, since the launch of Windows 10’s; the company’s management has steadily mentioned gaming as a way to monetize its OS. Considering the company’s gradually rising focus on PC gamers, that metric may propose more insight.

The victory of SteamOS may have always been an extensive shot, but keeping in mind the Steam’s popularity, it proposes a real threat to the Windows platform. Currently, Valve has no plans to give up on SteamOS, but it seems like there is virtually no demand for the operating system and the company will be left with no option in the future.

Conclusion

Over the years, Microsoft has survived many things and I expect it to continue doing the same. The company is cash rich and has a good dividend yield, which makes it a great pick for defensive dividend growth investors.
Published on Sep 26, 2016
By Akshansh Gandhi

Copyrighted 2016. Content published with author's permission.

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