The unexpected effect of online transformation on the giant Microsoft: Growth more than 3.5 times after only 5 years

Tram Ho

Referring to Microsoft, people often talk about founder Bill Gates, personal computers or famous software programs such as Windows, Office …

However, in a world where technology is growing day by day, focusing only on software programs or copyright has eroded the creativity and growth of Microsoft. The rise of companies like Alphabet (Google), Apple or Amazon has forced Microsoft to reshape its business strategy after years of deceleration.

When he took over the replacement of his predecessor Steve Ballmer in 2014, CEO Nadella changed his strategy from “devices and services” to businesses that focus on smartphones, cloud computing or future technologies.

The technology giant has gradually shifted from focusing on the copyright of software programs for personal computers to cloud services for both businesses and individuals, thereby successfully implementing the online transformation process. .

Instead of refusing to cooperate with partners to keep the copyright, Microsoft began building links with a number of software and technology manufacturers.

CEO Nadella has teamed up with Red Hat to promote its cloud computing Azure Cloud since 2010. Similarly, he has partnered with Salesforce or even Amazon to bring lucrative deals to Microsoft in new business.

From this point on, the sales of copyright or products attached to Microsoft’s Windows operating system are no longer unique. Cloud revenue and its related services in the fourth quarter of 2019 reached US $ 12.5 billion, higher than the US $ 9 billion in the same period last year. Meanwhile, the company’s total revenue of the same period reached 35.7 billion USD. As such, cloud computing accounted for 34% of Microsoft’s revenue in the fourth quarter of 2019.

The margin of cloud computing at Microsoft is currently 67%. The Forrester Research report, meanwhile, shows that Microsoft has 22% of the market for infrastructure systems in this segment.

Today, Microsoft and Google are two of the rare giants that provide comprehensive infrastructure services for cloud computing, from hardware to software.

Thanks to this successful transformation, the image of Microsoft in the public eye has changed. From an old corporation that clung to copyright to a company specializing in cloud computing services. Sales figures show that Microsoft is on the right track when it comes to online transformation before the technology revolution.

Microsoft now accounts for two-thirds of its revenue and provides a large amount of available cash flow for the company to reinvest. Allowing individuals and businesses to share data systems as well as provide accompanying services and products makes Microsoft achieve encouraging results.

In early 2014, just before CEO Nadella came to power, Microsoft’s stock was only about $ 38, now it costs $ 136, an increase of more than 3.5 times. In the same period, its revenue increased from 93.5 billion USD to 122 billion USD.

Tác dụng bất ngờ của chuyển đổi online đối với gã khổng lồ Microsoft: Tăng trưởng hơn 3,5 lần chỉ sau 5 năm - Ảnh 3.

In 2019, Microsoft is the third company in the market with a total market capitalization of 1 trillion USD, even before the competition of Google.

Currently, Microsoft is the market leader in the cloud segment with $ 38 billion in revenue for this segment alone in fiscal 2019. This figure is 4 times higher than that of cloud rival of Google. 8 billion USD and 3 times Salesforce is 13.3 billion USD. The revenue of Amazon Web Services only reached 25.7 billion USD for fiscal year 2018.

Clearly, digital transformation has helped Microsoft not only improve business results, create new directions, but also improve the image of the company since the founder Bill Gates retired.

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Source : Genk