Microsoft

Microsoft (NASDAQ:MSFT) is a technology corporation known for being the largest global vendor of computer software (including the Windows operating system and the Microsoft Office suite). It is also a leading provider of cloud computing services, video games, computer and gaming hardware, search, and other online services. Microsoft is one of the largest listed companies worldwide and one of the Big Five tech firms (GAMAM), reporting USD 212 billion in annual revenue in FY2023. 

Originally founded in 1975, Microsoft made its initial public offering in 1986. Over the years, the company underwent several restructuring attempts in a bid to unify disparate business units. It did this by either coalescing divisional strategies under a single strategy (“One Microsoft” in 2013), streamlining and aligning acquisitions to the company’s strategy (post-Nokia acquisition in 2014), or integrating its Sales, Marketing, and Services Group (SMSG) into the rest of the company to form one senior leadership team (2016). In July 2022, Microsoft announced the retrenchment of just under 1% of its ~180,000 workforce as part of a strategic realignment of business groups and roles, impacting teams like customer and partner solutions as well as consulting. Notably, in January 2022, Microsoft entered a USD 68.7 billion agreement (the largest to date) to acquire Activision Blizzard, a frontrunner in game development and interactive content publishing.Microsoft and Activision Blizzard extended the merger agreement to October 18, 2023, pending UK regulatory negotiations. CMA previously blocked acquisition in April 2023 over competition concerns. In June 2022, Microsoft reached USD 2 trillion in market capitalization for the first time, just two years after it first passed the USD 1 trillion milestone. 

Microsoft operates across three broad reporting segments: productivity and business processes, intelligent cloud, and more personal computing. The intelligent cloud segment is in the lead accounting to 41.5% of revenue in 2023. Microsoft’s server products and cloud services portfolio (a subsegment of intelligent cloud) represents the biggest revenue earner at USD 80 billion (2023), followed by Office products and cloud services (subsegment of productivity and business processes) at USD 49 billion (2023).

In 2023, the US represented 50.4% of Microsoft’s total revenue and constituted the company’s single largest market, with no other individual customer or country accounting for over 10% of revenue (2021–23). Microsoft has planned significant investments around modular business applications that transform workplaces; cloud-based services that create new experiences for businesses and individuals; and using Windows as a means of growing its cloud business, its share of the PC market, and driving engagement with other services. It also planned to leverage AI applications to drive insights and understand customer needs, develop end-to-end security solutions across all clouds and platforms, and make innovative advances in console and PC gaming. In 2023, Microsoft reported that it has invested over USD 700 million in a diverse portfolio of 50+ global projects focused on sustainable solutions in energy, industrial, and natural systems. In 2023 it also increased investments in the development and deployment of specialized supercomputing systems to accelerate AI research and deployment company, OpenAI’s research.