New York Times:
Just a few years ago, Microsoft was seen as a lumbering has-been of the technology world.
It was big and still quite profitable, but the company had lost its luster, failing or trailing in the markets of the future like mobile, search, online advertising and cloud computing. Its stock price languished, inching up 3 percent in the decade through the end of 2012.
It’s a very different story today. Microsoft is running neck and neck with Apple for the title of the world’s most valuable company, both worth more than $850 billion, thanks to a stock price that has climbed 30 percent over the last 12 months.
So what happened?
Interesting analysis. In a nutshell, this is a combination of Satya Nadella’s vision when he came on board in 2014 (dump the old stuff that wasn’t working, hyper focus on the new, like cloud computing) and Apple’s iPhone-sales-centric valuation.
Lots of detail on the re-invention of Microsoft. Terrific read. Wonder if Intel can find this path.
And yet, Active Directory is a blight on the world that should be eliminated with extreme prejudice.
Intel seems neither able nor willing to acknowledge what sort of reinvention is needed there. One could say the same about IBM.
Kudos to Microsoft that their CEO is willing to admit failure, dumping product lines to which Gates/Ballmer likely would have clung indefinitely.
However, comparing their market cap to Apple’s is a little bit misleading. Microsoft’s P/E is over 45, while Apple’s is under 15. That means that if investors had similar confidence in Apple’s future that they do Microsoft’s, Apple would have a market cap over three times that of Microsoft.
“Wonder if Intel can find this path.”
Nope.
All I know is that that everytime I walk by the Microsoft store in the the mall, there are 5 people in there and the Apple store is packed to the point where I have to wait for someone to help me. I’m not exaggerating.
Good on MS.
(Disclosure: I do .NET programming on Windows for a living, so I deal with them a lot, and use Windows a lot, even beyond using it voluntarily for gaming. I mean, equally, I’ve owned and used Macs without interruption since 1992.)
But equally, for both companies, people should stop obsessing over market cap.
Intel is, I think, very much aware that they need low-power (and mobile) technology.
It’s just difficult to “just do that”, especially since they don’t to be “just another ARM licensee”.
(That said, they are doing things that aren’t either Big x64 CPUs or even Lower Power Atoms, like their Quark line of microcontroller SoCs.
The Atoms seem to be getting better on computrons per watt, too, though it’s catch-up, not competition, now.)
Microsoft, Inc. is not quite the same as Microsoft Retail, to be fair.
(Whereas Apple is a retail hardware company more than anything else.
Microsoft is not primarily a hardware vendor.)
It appears to me that Intel is very much the sort of corporate culture that has institutionalized resistance to new ideas (not to mention dependence upon existing relationships), despite their awareness of their current position.
Windows, Office.
Cloud, Azure, Office365 😉
Microsoft direct to consumer is a tiny slive of their business. If, ceteris paribus, MSFT stores were as busy and ubiquitous as Apple stores, the valuation differences would be another 2 to 3x. Same goes if APPL ha equal relevance to MSFT in the enterprise.
I find it hard to believe people are nitpicking over companies worth over $800 billion.
Billion.